A Practical Approach To Benchmarking Your Improvement Processes IPC Norbert Gallagher, Vincent Steadman, Colin Mc Glynn, Teresa Hanratty, John Corrigan

What is Benchmarking ? Benchmarking is a tool for continuous improvement of the management of processes in companies. It enables organisations to assess their own performance, compare it with that of others, analyse the gap between the two, identify and make fundamental changes in specific areas, in order to improve and enhance their own performance. It applies to all enterprises, large, medium and small and can bring significant benefits in terms of productivity and competitiveness.

Benchmarking is…………….....a tool...simple, flexible, dynamic...a process...continuous, systematic...measurement...comparison against best practice...learning...improving performance...crosses sectors, industries and countries...promotes benchlearning and networking

Types of Benchmarking Internal External Competitive Strategic Process Best Practice

Internal Benchmarking This refers to the analysis and comparison of one or more units within the same organisation. It is often the case that organisations may have an in-house best practice area, identified by a variety of indicators including performance outputs, absenteeism rates, staff turnover rates, etc.

External Benchmarking External Benchmarking refers to comparative analysis beyond one organisation. It is a process of looking outside to other organisations and benchmarking against them. It is often beyond or independent of sectors or industries. This has the advantage of not being direct competitive benchmarking, which can lead to more openness and sharing of information, ultimately providing a richer analysis.

Competitive Benchmarking Competitive benchmarking is an analysis of strategies, processes and practices with competitors and companies in the same industry. Therefore, it is industry or business type specific. It is especially beneficial to organisations managing a specialised type of operation or equipment, and for whom, the most effective benchmarking is with the same type of organisation.

Strategic Benchmarking This is a proactive analysis of emerging trends and options in different markets, processes, technologies and distributions which could significantly affect the strategic direction of economies. It is the broadest form of benchmarking.

Process Benchmarking This provides an analysis of best practice processes and functions irrespective of industry or sector.

Best Practice Benchmarking Best practice benchmarking can be process, competitive or strategic. It provides the opportunity for the most significant improvement and therefore, the greatest performance enhancement.

What Does Benchmarking Achieve? To identify gaps in performance To identify design options To set performance goals To understand emerging strategies To respond to management information needs To educate professionals To stimulate awareness of external influences on customers To create a customer focus within the organisation

What Does Benchmarking Achieve? Cont. To create a sense of urgency to achieve improvements To provide action targets to measure successes To reinforce the value of continuous improvement To motivate the organisation in the process of change

What Can Be Benchmarked ? Developing and managing human resources - Employee Communication; Training and Continuous Learning; Performance Management; Culture Development; Staffing and Employee Selection; Management Styles Understanding markets and customers - New Product Development; Customer Services Produce and delivery - Risk analysis; Order Placing; Dispatching; Warehousing; Reducing cycle times; Reducing lead times

What Can Be Benchmarked ? Cont. Managing information - Forecasting; Use of IT; Management Information Systems Managing financial and physical resources - Physical Operation Design; BPR Managing improvement and change Designing products and services Developing a vision and strategy

What Can Be Benchmarked ? Cont. Marketing and selling - Relationship Marketing Invoicing and customer services - Supply Chain Management and Modelling Executive environmental management programmes Managing external relationships

How is Benchmarking Carried Out? Stage by stage process: 1.Assess own performance 2.Identify Best Practice 3.Assess Best Practice 4.Compare the two 5.Analyse the Gap 6.Make Improvement Plans 7.Implement Plans 8.Monitor and Evaluate results