Benchmarking

More than just competition.

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Definition
Classification of Benchmarking
BM Scope
BM Techniques
The Benchmarking Process
BM Cycle
Benefits of BM
Case Example
BM-project in Mercedes-Benz factory in Berlin
Agenda
The next 8 minutes
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Benchmark: a point of reference from which measurements may be
made (derived from topography)
Benchmarking: the search for solutions that are based on the best
industry practices and have the potential to lead a company to first
class performance
Definition of the term Benchmarking
Benchmarking is more than just a comparison among companies.
Benchmarking, therefore, is about identifying
room for optimization (internal)
new ideas for methods, procedures, and processes (external)
Best Practices (internal & external)
and implementing the lessons learned in order to achieve sustainable
competitive advantage.
Definition Classif. Process Case 3
Scope of comparison
Benchmarking projects can have a different scope.
BM of
companies
Internal BM
Company related
Group related
External BM
Market related
Industry related
Industry
independent
BM of
sectors
BM of general
frameworks
Competitors
Trend
analysis
Best
Practice
Definition Classif. Process Case 4
Scope of comparison
The learning curve increases with an increasing scope of comparison.
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Types of Benchmarking
Best in Company
Best in Group
Best in
Competition
Best in Class
Best Practice
Internal BM
External BM
Definition Classif. Process Case 5
Product BM
Reverse
Engineering
Independent of BM
partner
Limited learning
effects
Process BM
Modelling &
quantifying
processes
Understanding for
own processes
Difficult
comparison
Strategic BM
Strategic
positioning,
success factors,
components
Evaluating &
complementing
own strategy
Benchmarking Techniques
There is more than one approach towards benchmarking.
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Knowledge & Benefits
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Qualitative BM
Quantitative BM
Process-related BM
H
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Definition Classif. Process Case 6
Setting
targets
Internal
Analysis
Comparison
Defining
actions
Implementation
Benchmarking Cycle
Benchmarking is not a definite project, but a continuous cycle.
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1 Setting targets based on strategic
goals of the company with
management & process owners
2 An internal analysis includes the
following tasks:
- As-it-is analysis
- Modelling of business processes
- Definition of measures for
comparison
- Establishing a (industry
independent) questionnaire
Definition Classif. Process Case 7
Setting
targets
Internal
Analysis
Comparison
Defining
actions
Implementation
Benchmarking Cycle
Benchmarking is not a definite project, but a continuous cycle.
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3 During the comparison stage:
- Partners are selected
- Data is collected
- Processes are evaluated
- Results are interpreted
4 Results of the benchmarking
process are communicated to the
management and the employees.
Also, an action plan with clear
responsibilities is defined.
Implementation & improvement of
Best Practices (support of top-level
management!)
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Definition Classif. Process Case 8
The Benefits of Benchmarking
Benchmarking has both direct and indirect effects.
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Thorough analysis of the own company
Comparison of company units
Identification of best practices
Identification of underperforming areas
Evaluation of different solutions
Establishing an understanding for business processes
Scrutinizing the companys objectives
Challenging the companys strategy
Strengthening the competitive position
Initializing a continuous improvement process (KAIZEN)
BM helps a company not only to identify Best Practices and to optimize
processes, but also to gain a better understanding of the company itself.
Definition Classif. Process Case 9
Project duration: 4 months
Setting targets
Analysis & improvement of the business process within the
experimental department (incl. interfaces)
Reduction of variable costs
Reduction of variable times (e.g. set-up time)
Knowledge transfer
Standardization of processes
Increase in employee motivation
Increase in capacity utilization
Case Example
Mercedes-Benz factory in Berlin.
Definition Classif. Process Case 10
Internal analysis
Interviews with experts
Screening of process documentation
Already first results
Only a few actions contribute directly to value creation
Strong crosslinking in preparation phase
Sequentiel actions can take place in parallel
Selection of BM partner
Weighted criteria
15 potential partners selected
2 firms were selected approach through independent 3rd party
Case Example
Mercedes-Benz factory in Berlin.
Process model
Definition Classif. Process Case 11
Case Example
Mercedes-Benz factory in Berlin.
Comparison
Questionnaires (process owners)
Data collection by independent 3rd party
Comparison of processes
Defining actions
Reduction of two test benches
Review of capacity needs
Analysis maintenance costs
Introduction of an efficient storage system
Automation of bid proposals
Transfer of one employee to another group
Process model
Definition Classif. Process Case 12
Case Example
Mercedes-Benz factory in Berlin.
- 37%
Mercedes-
Benz (year n)
Firm F
(year n)
Firm B
(year n)
Mercedes-Benz
(year n+1)
Maintenance
costs
- 37%
- 73%
+ 71%
Costs of
material
Personnel
costs
Maintenance costs
Definition Classif. Process Case 13
Always compare things that are comparable!
Benchmarking is not about stealing information!
Benchmarking is a continuous cycle, not just a temporary project!
Managerial Implications
The 3 key take-aways
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Mertens & Kohl (2009), Benchmarking Leitfaden fr den Vergleich
mit den Besten, 2. berarbeitete Auflage, Symposium Publishing
GmbH, Dsseldorf
Sources
Sources used for this presentation
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