Information and Training. | Total Quality Management.The objectives of implementing a benchmarking program, for an organization are many and varied, however usually include some or all of the following reasons….
To determine who is the best out there in terms of a specific or range of capabilities. To identify world-class performance levels. To determine the drivers of superior performance within competitor organizations, to quantify gaps between the benchmarker’s performance and what is seen as the world-class performance standard. To identify best practices in key business processes, share knowledge of best practices, build foundations for performance improvement and identify how we can use the same principles to also perform at world class levels?
Asking the question what is benchmarking, leads us to see benchmarking as a method for developing within our organization a continuous structured process that leads to superior performance and a competitive advantage. The key is not to focus solely on numbers but to also focus on a commitment for process improvement. Measuring performance of an organization against that of “best in class” and by determining how the “best in class” achieve their performance levels and using the information as the basis for your own organization’s targets, strategies and methods of implementation, can result in significant operational improvement.
The benefits associated with Benchmarking …• The provision of numeric goals and indicators of relative performance.
• The development of insights into innovative approaches by other organizations (or departments) that affect process performance positively.
• Generating a vision that is outward looking, while focusing internally on critical managerial issues and processes.
• Top management know how their organizations fare against comparable organizations.
• Assisting in development of effective strategic management plans, organizational re-engineering, redesign and restructuring initiatives.
• Supporting a learning culture that values continuous improvement.
• Focus resources on developing performance targets that relate to demonstrated superior external performances.
• Sharing information between process partners.
Implementation of benchmarking as part of a TQM process?The Juran 7-Step Benchmarking Process has been developed over many years by the Juran Institute. The process is generic and equally applicable in principle to all types of benchmarking.
The process is divided into two phases.
Phase 1 is a positioning analysis that provides the benchmarker with a comprehensive study of the relative performance of all of the benchmarking participants and identifies any gaps between the benchmarker’s performance and that of “best-in-class” organizations:
To maximize the value of the process, organizations must build an understanding of the practices that enable the leaders to attain their superior performance levels. This is the purpose of Phase 2 of the 7-step benchmarking process.
Step 1: Preparation and planning. Thorough preparation and planning are essential at the outset. Recognize the need for benchmarking, determine the methodology you’re going to use, and identify the participants in your project.
Step 2: Data collection. This stage involves deciding what you’re going to measure and how you’ll measure it. You need to define the benchmarking envelope — what is to be benchmarked and what is to be excluded. At this point, you can establish the metrics you intend to use; these, too, must be clearly and unambiguously defined in order to ensure comparability of the datasets that you will collect. Finally, you need to determine the most appropriate vehicle for data collection.
Step 3: Data analysis. The key activities here are the validation and normalization of data. Before you can perform any meaningful analysis, it’s essential that all data be validated to establish its accuracy and completeness. Some form of data normalization is usually required to enable like comparisons to be made between what may be very different operational subjects. The analysis must indicate the benchmarker’s strengths and weaknesses, determine gaps between the benchmarker’s performance and the leaders’, and provide recommendations for the focus of performance improvement efforts.
Step 4: Reporting. The analysis must then be reported in a clear, concise, and easily understood format via an appropriate medium.
Step 5: Learning from best practices. In this step, the top-performing organizations share their best practices, to the mutual benefit of all of the benchmarks’. Of course, when some of the benchmarks’ are true competitors, the options for sharing may be limited and alternative approaches may be required to establish learning
Step 6: Planning and implementing improvement actions. Once the learning points have been ascertained, each organization should develop and communicate an action plan for the changes that it will need to make in order to realize improvements. The learning points should feed into the organization’s strategic plan and should be implemented via its performance improvement processes
Step 7: Institutionalizing learning. The insights that you’ve gained and the performance improvements that you’ve achieved must be fully embedded within the organization; it is critical to ensure that the gains are rolled out throughout the business and sustained over time. Benchmarking can take place at the corporate, operational or functional levels of the organization.
Benchmarking is a component of a Total Quality Management approach to improvement. TQM can be implemented at an overall organization level or individual TQM tools and techniques can be implemented to drive specific performance improvements.
Information & Training. | Total Quality Management Tools and Techniques …
- Continuous improvement utilizing Analytical Techniques.
- 5 why’s analysis
- Process Flow Diagrams/Flowcharts/Process Mapping
- Check sheets /Check Lists
- Run charts
- Scatter Diagrams/Scatter Plot
- Cause and Effect/Fishbone/Ishikawa Diagrams
- Identifying sources & causes of variation
- Control/Shewart Charts/DPU Charts
- Cpk and Ppk Analysis
- Pareto Analysis
- Bottleneck Analysis
- Etc. Etc.
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