 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 6 The Voice of the Market

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Chapter 6  What do we mean by “The Voice of the Market?”  Gaining insight through benchmarking  Purposes of benchmarking  Difficulties in monitoring and measuring performance  Commonly benchmarked performance Measures

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Chapter 6  Best in Class benchmarking  Best of the Best Benchmarking  Business Process Benchmarking  Leading and managing the benchmarking effort  Problems with benchmarking

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market What do we mean by the Voice of the Market? One of our best sources of information can be other companies. By understanding our competitors we begin to understand the marketplace better…

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Gaining insight through benchmarking A Benchmark is an organization recognized for its exemplary operational performance. Benchmarking is the sharing of information between companies so that both can improve.

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Purposes of Benchmarking  Learning from success  Borrowing ideas  Best-in-firm  Beating industry standards  Best-in-class  National Leadership  Best-in-world

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Difficulties in Monitoring and Measuring Performance  Limitations of accounting systems  Computing productivity  Comparisons between US firms with foreign companies

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Commonly Benchmarked Performance Measures  Financial ratios  Productivity rations  Customer-related results  Operating results  Human resource measures  Quality measures  Market share data  Structural measures

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Commonly Benchmarked Performance Measures “Data and analysis support a variety of company purposes, such as planning, reviewing company performance with competitors or with “best practices” benchmarks.”

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Best-In-Class Benchmarking “Whom do we benchmark?” Best-in-class refers to firms or organizations that have been recognized as the best in an industry

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Best-Of-The-Best Benchmarking After Best-in-class?  Outstanding global benchmark firms.  Can lead to breakthrough improvement by causing individuals… to look at other industries…

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Business Process Questions Eliminate unnecessary Tasks  What?  Why?

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Business Process Questions Change the sequence or combination  Where?  When?  Who?

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Business Process Questions Simplify the task  How?

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Business Process Questions Select an improvement method  How much?

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Robert Camp’s 10 steps  Decide what to benchmark  Identify whom to benchmark  Plan and conduct the investigation  Determine the current performance gap

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Robert Camp’s 10 steps  Project future performance levels  Communicate benchmarking findings and gain acceptance  Revise performance goals

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Business Process Benchmarking Robert Camp’s 10 steps  Develop action plans  Implement specific actions and monitor progress  Recalibrate the benchmarks

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Leading and Managing the Benchmarking Effort  Benchmarking is a managed process

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Leading and Managing the Benchmarking Effort  Managing the process involves establishing, supporting and sustaining the benchmarking process

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Leading and Managing the Benchmarking Effort  Management sets expectations for performance relating to the benchmarking process

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Leading and Managing the Benchmarking Effort  Training is the key to success… this is especially true for benchmarking

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Problems with Benchmarking  There may be … difficulty obtaining cooperation  Functional benchmarking with firms in non-competing industries makes it difficult to benchmark these firms  Fully understand your own process before you benchmark someone else  Benchmarking is time consuming and costly

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Strategic Quality Planning The Voice of the Market Summary  The goal of benchmarking is to become the best-in-class and then the best-of-the-best.  Benchmarking is more effective for firms that have been pursuing quality and process improvement over time  Baselines and the use of data and measures can result in undesired outcomes

 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.