1. Total Quality Management BUS 3 – 142 Voice of the Market Week of Feb 21, 2011

2. Page 2 2 Benchmarking –It is helpful, and often necessary, to observe how other organizations conduct business and achieve the results that they achieve –There is much Learning through the success and failures of others –While studying competitors it is possible to also better understand your marketplace –When benchmarking, target the Best Of Breed –Make the gap between the best and your organization as the catalyst for significant improvement

3. Page 3 3 Sharing Best Practices takes place in many forms –Dr. Deming in Japan –Toyota culture of providing tours and publishing books on the “Toyota Way” –Books from HP, Intel, Apple, and others –Professional Societies – Case Studies –Beyond business  Athletes improve by competing against better players to become the best  Musicians and Artists attend concerts and exhibits to expand the sources of influence to their own styles  Support groups for hobbies, parenting, rehabilitation, job searching, etc…

4. Page 4 4 Benchmarking is designed to Improve Results

5. Page 5 5 Benchmarking Results should be tied to Data

6. Page 6 6 Productivity –Productivity is a Ratio of Inputs and Outputs  Sales per Employee  Output per employee  Efficiency * Utilization  Other –There are Multiple types of Inputs  Labor  Materials  Energy  Equipment  Floor Space  Investment Dollars –Most useful when analyzed as “Total-Factor” productivity  ALL Outputs divided by ALL Inputs Effort vs. Results

7. Page 7 7 Key Points to remember about Benchmarking –Keep it Legal –Be willing to Give what you get –Respect Confidentiality –Keep information Internal –Use benchmarking Contacts –Do not refer without permission –Be prepared at the initial contact Sharing methods and techniques does NOT carry over to sharing Intellectual Property

8. Page 8 8 There is an Evolution to the Benchmarking process (Fig 6-2) Start with learning and survival. Move to excellence and World Class status 1.Learning from Success 2.Borrowing Ideas 3.Best-in-firm 4.Beating Industry Standards 5.Best-In-Class 6.National Leadership 7.Best-in-World

9. Page 9 9 Benchmarking Results is not Enough –Who? –What? –When? –Where? –Why? –How? –How Much? Understanding HOW the results are achieved enables the CHANGES necessary to compete Answer “5w2h”

10. Page 10 10 Baselining and Reengineering –A baseline establishes a starting point, from which the impact of future changes can be measured –Sales before and after an advertising campaign –Response time before and after process reengineering –A person’s weight before and after going on a diet –Process Reengineering –Fundamental and significant rethinking and redesign of business processes –Breadth across the enterprise –Depth within and organization and process, including job design, technology, metrics, and strategy

11. Page 11 11 Benchmarking as an element of Career Management –Salaries of graduating seniors –Learning does not end after a degree is earned –Recognize what is unique to your industry and profession vs. what is common across industries and professions  Accountants, sales managers, and consultants may take a professional view (industry & employer less significant)  Athletes, pilots, physicians are linked to their industries –Professional Societies are established so that, among other purposes, members can be informed of trends and Best Practices in a specific discipline –Identifying Role Models and Mentors to provide guidance and advice is a continuous process throughout a career