Foster mq5 ch06

Chapter 6
The Voice of the Market
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Strategic Quality Planning
Chapter 6
What do we mean by “The Voice of the Market?”
Gaining insight through benchmarking
Purposes of benchmarking
Difficulties in monitoring and measuring performance
Commonly benchmarked performance Measures
Business Process Benchmarking
Leading and Managing the Benchmarking Effort
Baselining and Engineering
Problems with Benchmarking
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What do we mean by the Voice of the Market?
Strategic Quality Planning Model
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What do we mean by the Voice of the Market?
One of our best sources of

information can be other companies.
By understanding our competitors we
begin to understand the marketplace
better…
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Gaining insight through benchmarking
A Benchmark is an organization
recognized for its exemplary
operational performance.
Benchmarking is the sharing of

information between companies so
that both can improve.
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Benchmarking Relationship
Initiator Firm
Target Firm
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Process Benchmarking
Financial Benchmarking
Performance Benchmarking
Product Benchmarking
Strategic Benchmarking
Functional Benchmarking
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Purposes of Benchmarking
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
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Purposes of Benchmarking
Benchmarking Purpose and Quality Maturity
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Difficulties in Monitoring and Measuring Performance
 Limitations of accounting systems

 Computing productivity
 Comparisons between US firms
with foreign companies
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Commonly Benchmarked Performance Measures
 Financial ratios
 Productivity rations
 Customer-related results
 Operating results
 Human resource measures
 Quality measures
 Market share data
 Structural measures
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“Data and analysis support a variety of

company purposes, such as planning,
reviewing company performance with
competitors or with “best practices”
benchmarks.”
Malcolm Baldridge criteria
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Key business factors (KBFs) are important

attributes of a business that influence its
operations and decision making.
Example of KBFs
Mission
Vision
Values
Key customer segments
Core capabilities
Culture
Governance
Other facets of a business
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Business Process Benchmarking
Business Process Benchmarking is based on 5w2h
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5w2h
 Who?
 How?
 What?
 How much?
 Where?
 When?
 Why?
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Robert Camp’s 10 Step Process to Benchmarking
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Robert Camp’s 10 steps

1. Decide what to benchmark
2. Identify whom to benchmark
3. Plan and conduct the investigation
4. Determine the current performance
gap
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5. Project future performance levels
6. Communicate benchmarking
findings and gain acceptance
7. Revise performance goals
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8. Develop action plans
9. Implement specific actions and
monitor progress
10. Recalibrate the benchmarks
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Leading and Managing the Benchmarking Effort
 Benchmarking is a
managed process
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 Managing the process involves

establishing, supporting and
sustaining the benchmarking
process
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 Management sets expectations

for performance relating to the
benchmarking process
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 Training is the key to success…

this is especially true for
benchmarking
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Baselining and Reengineering
 Baselining
Baselining Process
 Reengineering
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Problems with Benchmarking
1. Cooperation from other firms

2. Functional benchmarking with firms
in non-competing industries makes
it difficult to benchmark these firms
3. Fully understand your own process
before you benchmark someone else
4. Benchmarking is time consuming
and costly
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Summary
What do we mean by “The Voice of the Market?”
Gaining insight through benchmarking
Purposes of benchmarking
Difficulties in monitoring and measuring performance
Commonly benchmarked performance Measures
Business Process Benchmarking
Leading and Managing the Benchmarking Effort
Baselining and Engineering
Problems with Benchmarking
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.
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Chapter 6

The Voice of the Market

One of our best sources of

Benchmarking is the sharing of

1. Learning from success

Benchmarking Purpose and Quality Maturity

 Limitations of accounting systems

“Data and analysis support a variety of

Key business factors (KBFs) are important

Business Process Benchmarking is based on 5w2h

Robert Camp’s 10 Step Process to Benchmarking

Robert Camp’s 10 steps

Robert Camp’s 10 steps

Robert Camp’s 10 steps

 Managing the process involves

 Management sets expectations

 Training is the key to success…

1. Cooperation from other firms

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