Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. 1 Quality Management for Organizational Excellence Lecture/Presentation Notes By: Dr. David L. Goetsch and Stanley Davis Based on the book Quality Management for Organizational Excellence (Sixth Edition)

2 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking MAJOR TOPICS Benchmarking Defined Benchmarking versus Reengineering Rationale for Benchmarking Prerequisites to Benchmarking Obstacles to Successful Benchmarking

3 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking (Continued) Role of Management in Benchmarking Benchmarking Approach and Process Making Full Use of Benchmarking Data Perpetual Benchmarking Benchmarking Resources Major Topics Continued

4 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking (Continued) Benchmarking is a process for comparing an organization’s operations or processes with those of a best-in-class performer. The objective of benchmarking is major performance improvement. Benchmarking focuses on processes and practices, not products. Benchmarking is done between consenting organizations.

5 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking (Continued) Benchmarking partners are frequently from different industries. Benchmarking is a component of total quality. Benchmarking must be approached in an organized, planned manner, with the approval and participation of top management. Benchmarking teams must include those who operate the processes.

6 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking (Continued) Benchmarking is not restricted within industry boundaries, but only to best-in-class processes. It is necessary for the benchmarker to understand its own process before comparing it with another. Because best-in-class is dynamic, benchmarking should be seen as a never-ending process. Management has a key role in the benchmarking process, including commitment to change, making funds available, authorizing human resources, being actively involved, and determining the appropriate level of disclosure.

7 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Twenty: Benchmarking (Continued) The goal of benchmarking is to become best-in-class, not simply improved. The intent of benchmarking is to replace an inferior process with one rated best-in-class or to radically improve a process, bringing it up to best-in-class performance—and then to surpass best-in-class. A number of obstacles to successful benchmarking exist, including internal focus, overly broad or undefined objectives, unrealistic timetables, improper team composition, failure to aim at best-in-class, diverted team emphasis, insensitivity toward the partner, and wavering support by top management.