1. Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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. 2 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Twenty: Benchmarking MAJOR TOPICS Benchmarking Defined Benchmarking versus Reengineering Rationale for Benchmarking Prerequisites to Benchmarking Obstacles to Successful Benchmarking

3. 3 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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. 4 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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. 5 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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. 6 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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. 7 Quality Management, 6 th ed. Goetsch and Davis © 2010 Pearson Higher Education, Upper Saddle River, NJ 07458. 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.