Driving Performance

Benchmarking Process
 What is Benchmarking

Benchmarking is the competitive edge that allows organizations to adapt, grow, and thrive through change. Benchmarking is
the process of measuring key business metrics and practices and comparing them—within business areas or against a
competitor, industry peers, or other companies around the world—to understand how and where the organization needs to
change in order to improve performance.

The objective of benchmarking is to use the data gathered in your benchmarking process to identify areas where improvements
can be made by:

Determining how and where other Using the information, you gather from your
Comparing the other
companies are achieving higher analyses and comparisons to implement
company’s / competitor’s
performance levels than your changes that will improve your company’s
processes and strategies
company has been able to achieve. performance, products, and services
against your own.

In the last Gyanvaani we also understood on Benchmarking and Comparison (click here to read the last Gyanvaani)

In this series of Gyanvaani, we will focus on the Benchmarking Process, its approach and benefits.

What is benchmarking = https://youtu.be/xuZOtKmGB1M

 Performing Benchmarking

Benchmarking is a tool for To be effective it needs to be It is a step in the methodology of

business improvement. used strategically to improve process improvement, and when
most important processes of approached in a structured way it
the organisation. yields many benefits:

1. A realisation of what levels of

performance are achievable.
2. Awareness of innovation as it
occurs in other areas.
3. Reductions in waste quality
problems, and customer complaints.
4. An opportunity to learn from the
experience of others.

Click to understand more→ https://youtu.be/8mY2YrYAE-U

 Keys to Successful Benchmarking
What You Need to Make Benchmarking Effective

Desire to use
Focus on the processes
benchmarking in Willingness to admit
that are critical to your
conjunction with that you’re not the best
business
strategic planning

Commitment to
Openness to new Recognition given to
provide resources and
ideas from potentially successful
to overcome resistance
unexpected sources benchmarking teams
to change

Communication to the
Understanding of the organization about the
benchmarking process objectives of the
benchmarking project

Click to understand more→ Benchmarking in Business: Overview and Best Practices (thebalancecareers.com)
When not to Benchmark

Target is not critical to the core business functions

Customer’s requirement is not clear

Key stakeholders are not involved

Inadequate resources to carry through

No plan for implementing findings

Fear of sharing information with other organizations

 Understanding the Current Process
Doing Your “Homework”

Use process mapping Identify customer

Determine current
tools to define your expectations for
process performance
current process your process

Use analytical tools

to understand the hint: you don’t have
Identify targets
causes for to wait to make
based on analysis
inefficiencies in the improvements
process

Click to know more on Types of Benchmarking https://bernardmarr.com/the-different-types-of-benchmarking-examples-and-easy-explanations/

Connect to Strategy

Click to read a case study on Benchmarking

 Proposed Benchmarking Process

PLAN ORGANISE
1. Identify Key Processes 1. Assemble a Team
2. Assess importance & Performance 2. Gather secondary info
3. Prioritize processes 3. Identify & Select Partner
4. Map the processes 4. Contracting
5. Process overview 5. Screening survey
P O 6. Site visit, Collection of Process
details

ADOPT ANALYSE
1. Pilot implementation
A A 1. Determine Process gaps and
2. Measuring benefits analysis

3. Implementation & Lateral 2. Analysis of process

deployment 3. List business advantages
4. Develop improvement actions
5. Evaluate alternatives & Decide

Source : EFQM Toolbook on Benchmarking

 Proposed Benchmarking Process

Planning Phase

1. Form (and train, if needed) benchmarking team

2. Analyze and document the current process
a. Identify the area of focus
b. Identify the critical success factors (CSF)s for the area
c. Develop measures for the CSFs
3. Establish scope of benchmarking study
4. Develop purpose statement
5. Develop criteria for benchmarking partners
6. Identify target benchmarking partners
7. Define a data collection plan and determine how the data will be used/managed/ distributed
8. Identify how implementation of improvements will be accomplished
 Proposed Benchmarking Process

Organising Phase

1. Secondary research based on select/sort criteria

2. Evaluate results and identify potential partners
3. Develop data collection instruments
4. Pilot data collection instruments internally
5. Identify and contact best practice partners and enlist participation
6. Screen partners and evaluate for best “fit” with criteria
7. Develop detailed questionnaire
8. Conduct detailed investigation
a. Detailed questionnaire
b. Follow-up telephone interviews
c. Site visits
 Proposed Benchmarking Process

Analysis Phase

1. Compare your current performance data to your partners' data

– Sort and compile data
– Make your performance data comparable (normalize)
– Identify gaps

2. Identify operational best practices and enablers

– What are participants doing that you are not doing
– How do they do it (enablers)

3. Formulate strategy to close the gaps

– Assess adaptability of practices and enablers
– Identify opportunities for improvement

4. Develop implementation plan

 Proposed Benchmarking Process

Adapting Improvements

1. Implement the plan

2. Monitor and report progress

-Acknowledge the benchmarking team

3. Document the study

- Communicate the results (internally and to benchmarking partners)

- Assist in the internal transfer of best practices

4. Plan for continuous improvement

– Identify new benchmarking opportunities

– Set new goals

 How Do You Start the Search for the Best to Benchmark with?

• Focus on the process, not the company

– All of the processes at world-class companies aren't world-class

processes (beware of the “halo” effect)

– Even mediocre companies can have a world-class process or two

• Weigh the ease of getting access against possible

performance compromises

– Understand the spectrum from parity (just "different"), to some

improvement over the current process, to best practice, to best-in-
class or world-class

– Decide "best-in-class" or somewhere in-between

Click to read a case study on Benchmarking

 Comparing Scenarios of Benchmarking

Without Benchmarking With Benchmarking

DEFINING CUSTOMER · Based on history/gut feel · Based on market reality

REQUIREMENTS · Acting on perception · Acting on objective evaluation

· Lack external focus · Credible, customer-focused

ESTABLISHING
· Reactive · Proactive
EFFECTIVE GOALS
· Lagging industry · Industry leadership

DEVELOPING TRUE · Pursuing pet projects · Solving real problems

MEASURES OF · Strengths and weaknesses not · Performance outputs known,
PRODUCTIVITY understood based on best in class

· Internally focused · Understand the competition

BECOMING
· Evolutionary change · Revolutionary ideas with proven performance
COMPETITIVE
· Low commitment · High commitment

· Not invented here · Proactive search for change

INDUSTRY PRACTICES · Few solutions · Many options
· Continuous improvement · Breakthroughs
 Tools which can used in Benchmarking

Etiquette and legal issues Process mapping

07 01
Process
Observation skills performance
06 02 measurements

05 03
Interviewing skills Project
04 management

Questionnaire
design

Benchmarking story of XEROX→ https://www.icmrindia.org/free%20resources/casestudies/xerox-benchmarking-2.htm

Dear readers,

Wish you all a Very Happy Diwali !!

I hope you would have liked this Gyanvaani on : Benchmarking Process

I am sure that you are learning and implementing the concepts of the excellence model given in
Gyanvaani in your day-to-day work. If you have any such implementation story from our previous
Gyanvaani’s, whether it is a failure or successful do write to us at corpbe@godrej.com

We are here to support you on the concepts to make it successful.

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Click here for the Quiz Link for your reference

Have a good day and keep learning and sharing.

Regards
GYAN