2. OBJECTIVES
To know the definition of benchmarking
To know the triggers for benchmarking
To know the types of benchmarking
To know what are the reasons for benchmarking
To know the steps in identifying what to
benchmark
• To know benchmarking partner
• To know the benchmarking process
• To know what are the reasons why benchmarking
efforts fail.
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3. OUTLINE
I. Introduction
II. Definition of Benchmarking
III. Triggers for Benchmarking
•
Categories of Benchmarking
IV. Types of Benchmarking
•
Internal
•
Competitive
•
Functional
V. Reasons for Benchmarking
VI. Steps in identifying what to benchmark
VII. Benchmarking Partner
VIII. Benchmarking Process
•
Benchmarking Process Model
IX. Reasons for Failure of Benchmarking
X. Summary
4. INTRODUCTION
Benchmarking will help in identifying the current
level of performance of the processes in the
organization and bringing them up to the level
of the best processes. It can be used to compare
product features also.
We will learn the following concepts pertaining
to processes, namely Business Process
Benchmarking (BPB), one of the tools of TQM.
5. BENCHMARKING
• is a process of comparison of
two or more products, services,
processes or organizational
practices.
• standard or point of reference
• “a basis for establishing rational
performance goals through the
search for industry best
practices that will lead to
superior performance”
• Business Process Benchmarking
is comparing a business process
with the best process in that
area.
7. Problem based benchmarking
• Arises out of a problem in the organization
• Some of the triggers that could motivate the
organization to carry out benchmarking are:
a.
b.
c.
d.
Adverse feedback from customer
Increasing quality cost
Alarming error rates
Increase in cycle time
8. Process based benchmarking
• It is initiated as a part of process improvement
strategy of the organization.
• Benchmarking arises out of the following:
a. Defined mission
b. Defined objectives
c. Defined priorities
13. REASONS FOR BENCHMARKING
• Benchmarking is carried out to bring out clearly
and objectively the real status with regard to the
performance of the organization as well as the
processes.
• Benchmarking is a way to improve the processes
and reach the top.
• Benchmarking has to be carried out periodically
so as to maintain the leadership position
• It is a powerful and effective tool when used for
right reasons.
14. STEPS IN IDENTIFYING WHAT TO
BENCHMARK
Select processes
Determine vital
measures
Prioritize processes
and measures
15. Select Processes
• It is important to
select the right
processes for
benchmarking.
• To identify all the
processes, there is no
better method than
formulating a
process flow chart of
the organization.
16. Determine Vital Measures
• The measures are to be documented.
• One should select a few vital performance
measures for each process for benchmarking.
17. Prioritize Processes
• A duly constituted team for prioritization
should carry out an objective study.
• The team assign priority to the processes to
be benchmarked in the organization.
18. BENCHMARKING PARTNER
• Improves the processes in the
organization to the level of the
best.
• Should be the role model who
could be imitated or
benchmarked with.
• Customers and suppliers could be
taken to know who is performing
better in industry.
• Consult the employees in the
organization and particularly
those working in the processes
selected for improvement.
19. BENCHMARKING PROCESS
Selection of a
process
improvement
team
Prepare a
project
description
Carry out
benchmarking
Identification
of
benchmarking
partners
Adopt a suitable
benchmarking
process model
21. Planning Phase
• The improvement
team holds
discussions and
prepares a blueprint
for the project
including
performance
measurement of
processes.
22. Do Phase
• The team visits the partner and studies their
process and notes down the performance.
23. • The new process is implemented on a pilot
basis, the performance of the improved
process is measured and a report is prepared.
24. Act Phase
• Periodic measurements are carried out to
confirm effectiveness of the process.
25. REASONS FOR FAILURE OF
BENCHMARKING
Lack of commitment
Wrong selection of process
Not being cost effective
Wrong selection of team members
Under estimating the time
required
• Not positioning the
benchmarking within a larger
strategy
• Lack of involvement of
management
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26. Summary
Business Process Benchmarking is a basis for
establishing rational performance goals through the
search for industry best practices that will lead to
superior performance. The triggers for carrying out
benchmarking could arise due to a problem in the
organization or process improvement initiative. There
are
three
types
of
benchmarking;
Internal, Competitive, and Functional.
PDCA can be used for actual implementation of
benchmarking projects. There are various reasons why
benchmarking projects fail. However, as benchmarking
has the potential to improve processes, the pitfalls
should be avoided for. Benchmarking can be used as a
part of a larger goal such as Total Quality Management
(TQM) for it to be more effective.
