The importants of benchmarking.
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1. INTRODUCTION 1.1 History of Benchmarking G.H. Watson outlines the development of benchmarking in five phases1: Phase 1 1950-1975 Reverse Engineering Phase 2 1976-1986 Competitive Benchmarking Phase 3 1982-1988 Process Benchmarking Phase 4 1988+ Strategic Benchmarking Phase 5 1993+ Global Benchmarking Reverse engineering was tearing things apart, examining them, improving them, and putting them back together. Benchmarking really began in its modern form with the introduction of competitive benchmarking began with Rank Xerox, and its implementation of benchmarking in beginning around 1976. This was followed by process benchmarking which included looking for ideas outside of the direct competition. Strategic benchmarking involves fundamentally changing the business, not just the process. Global Benchmarking is the newest and involves comparing your organization on a global scale. Benchmarking started out in the corporate sector. It was originally started when Xerox corporation realized it was losing a lot of money and market share to its Japanese competitors. Its competitors were able to sell photocopiers for the same price that it cost Xerox to make them. Benchmarking was started by Xerox's Manufacturing unit when it analyzed its photocopier manufacturing compared to Fuji-Xerox, an affiliate Xerox's Logistics and distribution unit benchmarked with L.L. Bean in the way it handled its materials handling and warehouse operations. This is a very famous study that became part of the first book on Benchmarking by Robert C. Camp. (Benchmarking: The Search for Industry Best Practices that Lead to Superior Performance). This book was not published until 1989, but in the meantime benchmarking was becoming indoctrinated in the Xerox system. Bear in mind that most people did not know about benchmarking at this time. 1.2 Definition of Benchmarking The term benchmark originally meant a surveyor's mark cut in a rock used as a point of reference or comparison. In a general sense, benchmarking means setting standards which act as point of reference.2 Gregory Watson (1993)
This is useful to understand the process and its drivers. => Customer feedback - this involves identifying customers and their needs to assess whether the process is performing well or not. Customers can be asked direct or by formal customer survey. Answers to these questions can give clear indications as to what aspects of the process should receive priority. A benchmarking partner is any person or organisation that supplies information relating to benchmarking exercise. There are a number of ways to find a benchmarking partner including : => Trade and professional associations - can be useful particularly if company have decided that potential benchmark partners are likely to come from a particular industry or service sector. => Consultants - may have databases of best practices and best practice organizations. They can also act as a third party. => Stockbrokers - for background and structure of the potential benchmark partners. => Major suppliers of company's machinery, process technology, materials - can be sources of specific information regarding the potential benchmark partners. Stage 4: Analysing the Data for Performance Gaps Objective: To identify and analyse the gaps between best practice and your own business processes. All the collected information is used to identify performance gaps between benchmarking partners. When comparing the performance of companies, adjustments must be made for differences due to: * economies of scale * different management philosophies (outsourcing, decentralisation) * product features and manufacturing processes * operating environment (differing awards, regulatory constraints) Organization may have to develop a composite picture that reflects the input of many companies. Synthesise the process information have gathered in a way that is appropriate for your company's culture. This is an opportunity to compare current performance against the benchmark that have discovered. Stage 5: Take Action and Recycle the Process Objective: To develop strategies and action plans to close the gaps. What needs to be done to match best practice for this process?
=> Satellite FX-TV broadcasts and IMS multimedia workstations integrated with mainframe databases => Survey Feedback Action (32-item yearly employee survey to identify problems, morale and management perception) => Conducted domestically via online terminals/IMS mainframe CUSTOMER SATISFACTION => Customer Service Workstation (support system for customer service call center reps) => Multimedia software running on Hewlett-Packard 7000 servers and X terminals, integrated with mainframe databases => Service Quality Indicators (weighted mathematical rating system for service failures, conducted daily) => High-volume mainframe and workstation application => PowerShip and FedEx Ship (customer-premises systems for shipping and tracking packages) => PC-based GUI front ends to mainframe 5 CONCLUSIONS Today's market is increasingly competitive and a company's tradeshow performance can be the critical edge to differentiate in the marketplace. Without evaluation of your company's performance it is simply luck if the performance improves. Benchmarking enables an objective look at performance and identification of the gaps between your performance and the ideal. Benchmarking should focus on process, not definition of success or failure. Process adjustment to close the gap between your performance and the ideal is key to increasing the return on your tradeshow investment. For GD Express it is in very good stage of improvement and benchmarking has proven to be the appropriate solution for their business improvement. If they benchmark other areas as well it will lead them to the success. Since benchmarking is non-stop and continuous process, it is important for the organization to do benchmarking all the time. Therefore, benchmarking is vital and very useful method in today's competitive business environment. 1 http://www.uwm.edu/Dept/CUTS/bench/bm-desc.htm 2 External Business Environment (The Nottingham Trent University), page: 152. 3 John B., The Essence of Total Quality Management, 2nd Edtion, Prentice Hall Publication, Page; 42 4 Oakland John, Total Quality Management Text with Cases, 2nd Edition, (Chapter 7: Benchmarking), page: 125 - 127. 5 http://www.gdexpress.com.my/n_resource.html 6 http://www.contentconvergence.com/jdpowerstudy.pdf 7 J.D. Power and Associates Reports:FedEx Sweeps Customer Satisfaction Awards for Small Package Delivery Service 8 http://www.gdexpress.com/awards.htm 9 http://www.promgmsrv.com/articles/benchmarking.html http://www.cio.com/archive/080195/fedex.html?printversion=yes ?? ?? ?? ?? OLYMPIA COLLEGE IPOH NOTTINGHAM TRENT UNIVERSITY EXTERNAL BUSINESS ENVIRONMENT PAGE 1
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