Benchmarking - A measure of Performance - Karishma Sanghvi - Deepti Joshi

Topics * Evolution * Levels * Concepts * Types * Advantages * Process * Limitations * Areas to benchmark

Evolution * Comparative statistical activity * Competitive benchmarking by Xerox * Generic benchmarking for business process efficiency * Strategic benchmarking – 1990 * Learning organization * Core competencies

* Benchmarking can be defined as a process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results.

Cases * Xerox - Intervention technique for positive change * Infosys - Product testing and core banking * Motorola - Internal benchmarking for improving basic quality attributes * European Union- Co-ordination of economic and social policies

Concept * Industrial best practices * Achieve business and competitive objectives * Analysis of internal practices and processes * Systematic comparison * Identifying and implementing best practices

Legal & Ethical aspects * Expectation- disclosure * Proprietary information - confidential * Intellectual property – Patents, trademarks & copyrights * Antitrust and unfair trade practices * Evidence and Disparagement - focus on learnt things * Trade libel - competition

Advantages * Understanding of internal processes * Adaptation of superior practices * Identification of non-value added activities * Comparison of performance measures * Setting new realistic and rigorous targets * Define specific gaps in business processes and improve

Disadvantages * Conceptual ambiguity * Unavailability of mechanisms of control to decision makers * Changing best practices * Complementary tool and not an alternative

* Implementation may require BPR * Employee involvement * Long - term not instantaneous * Continuous and constant * Empowerment

Importance * Co-ordination * Decision making * Mutual learning * Sense of direction

Areas to benchmark * Customer service levels * Inventory management and control * Purchasing, billing and collection * Quality processes * Transportation, warehousing and distribution

Benchmarking methods AT&T, Digital Equipment, Ford, IBM, Motorola, Texas Instruments, Xerox Billing and collection American Express, MCI, Fidelity Investments Customer satisfaction L.L. Bean, Federal Express, GE Plastics, Xerox Distribution and logistics L.L. Bean, Wal-Mart Product development Beckman Instruments, Calcamp, Cincinnati Milacron, DEC, Hewlett-Packard, 3M, Motorola NCR

Employee empowerment Corning, Dow, Milliken, Toledo Scale Equipment maintenance Disney Flexible manufacturing Allen-Bradley, Baldor, Motorola, Health-Care Programs, Allied Signal, Coors Marketing Procter & Gamble

Quality methods AT&T, IBM, Motorola, Westinghouse, Xerox Quick shop-floor changes Dana, GM Lansing, Johns Controls Supplier management Bose, Ford, Levi Strauss, 3M, Motorola, Xerox Worker training Disney, General Electric, Ford, Square D

Levels of Benchmarking 1.Internal benchmarking 2.Competitive benchmarking 3.Non-Competitive benchmarking 4.World class benchmarking

Types of Benchmarking 1.Performance benchmarking or operational benchmarking 2.Process benchmarking or functional benchmarking 3.Strategic benchmarking

Benchmarking Process Step 1: Identify what to benchmark Step 2: Determine what to measure Step 3: Identify who to benchmark Step 4: Collect data Step 5: Analyze data and determine the gap Step 6: Set goals and develop an action plan Step 7: Monitor the process

Examination Questions * Describe the steps involved in benchmarking. List the parameters to be considered while benchmarking a B- school.(July’08 and July’ marks ) * Explain benchmarking. Briefly explain the various steps in benchmarking process. (Jan’ marks) * Explain the advantages and limitations of benchmarking (July’ marks)

* Discuss the seven step bench marking model (Jan’05 7 marks) * Write short notes on benchmarking (Jan’05 5 marks) * Case study