...Company Benchmarking for Competitive Advantage Terry Pilcher Assistant Director – Department of Trade and Industry UK Before undertaking a benchmarking study a company must be aware of the different types of benchmarking that exist. One of the major reasons for misunderstanding is the tendency to call a wide variety of different activities Benchmarking. The most simplistic form of benchmarking could be one person talking to another and deciding if they have similar areas of interest. At this level people undertakes benchmarking every day. Before listing the different types of benchmarking that exist it might be useful to present some definitions of benchmarking to set the scene. There are many definitions around but it is not so much the differences that matter but the similarities. This can be best illustrated using the following definitions: ‘A continuous systematic process for evaluating the products, services and work of organisations that are recognised as representing best practices for the purpose of organisational improvement’ (Spendolini, 1992) ‘Benchmarking is an external focus on internal activities, functions, or operations in order to achieve continuous improvement’ (McNair and Leibfried, 1992) ‘A disciplined process that begins with a thorough search to identify best practice organisations, continues with the careful study of one’s own practices and performance, progresses through systematic site visits and interviews, and concludes with an analysis of results...
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...BENCHMARKING IN BRAINSTORM Asko Karjalainen 2002 “Our task is to try to redefine benchmarking by using new concepts and surprising metaphors.“ D uring the last decade quality assessment phenomenon called benchmarking has expanded very rapidly.( By using the expression “assessment phenomena“, I will now underline the importance of reflection. Benchmarking must be set to the test of the creative and critical thinking.) Benchmarking stories are told all over the organisations, also in the public sector. And some stories they are! They are success stories about growing efficiency, great improvements, with an undertone of enthusiasm and promising visions. In those narratives benchmarking is introduced as the modern management tool as well as the most effective quality enhancement method. It seems that benchmarking really works. Why is it so? There may be many practical reasons like “building on the work of others makes sense“, “it can lead to cooperation“ or that the method is concrete and well documented (Keehley, et.al 1997) However, it should be self-evident that any method adopted from the business life, is most likely to fail in defensive organisations like the universities.( Some further critics of the benchmarking, see for example Gooden & McCeary, 2001, Dervitsiotis, 2000; Palfreyman, 1999).) Surprisingly enough, this seems not to be true with benchmarking. There is an increasing interest to apply benchmarking in the higher education organisations (Schofield...
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...If Hampshire Company management is looking to see improvements within a year, the company can implement process benchmarking to improve its current processes and increase the company’s bottom line. For example, Hampshire Company is looking to decrease its direct labor costs from $120,000 to $100,000 within the next six-months. Hampshire Company visits East Coast Umbrella in North Carolina and learns that the company has implemented temporary staff and robotics to reduce labor costs. Hampshire Company researches temporary staffing agencies in the area and various robotics vendors. The implementation of temporary staff and robotics reduces labor costs by reducing full-time benefits and 401K contributions. However, the costs associated with the running and maintenance of the new machinery will increase manufacturing overhead (Umbrellas Manufacturers in the United...
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...Benchmarking Training Article Benchmarking for competitive advantage Introduction There has been a progressive increase in the topic of benchmarking – but for all that there is still a great deal of ignorance about what it actually is. It has taken its place as a management buzzword along with BPR, TQM, Change, EVA and many others – but its true nature is poorly understood. Some see it as stealing (or ‘borrowing’) ideas; others as a mechanism for comparison with a competitor; whilst others view it as a form of industrial espionage. In fact it is all of these and none of these at the same time, but instead involves understanding strategic gaps; cooperation; hard work; a willingness to question and where necessary to change fundamental precepts (sacred cows) and also - giving. This paper will address several issues including: what benchmarking is; when it should be used; and the benefits from using it; how to approach a benchmarking initiative; and how to optimise a benchmarking project. What is benchmarking? The term benchmark comes from surveying where it was used to denote a notch or mark representing a given altitude and against which other heights could be calibrated or ‘benchmarked’, since when it has come to mean any standard against which something is compared; and some of the leading exponents in business include Xerox and GE. In business terms there are numerous definitions of benchmarking, but essentially it involves learning, sharing information and adopting...
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...TITLE: Benchmarking: A general review about the classification, process and pitfall of the model LECTURER: PROF. MADYA DR. RIZAL BIN RAZALLI NAME: ONG YUH KIANG MATRIC NO: 227806 TITLE: Benchmarking: A general review about the classification, process and pitfall of the model LECTURER: PROF. MADYA DR. RIZAL BIN RAZALLI | | | | | | Summary of selected articles Article 1 | Benchmarking: a general reading for management practitioners | Author | Sik, W.F., Cheng, E.W.L., & Ho, D.C.K. | Year | 1998 | Setting/ Place/ Sample | Management Decision, Vol. 36 Iss 6 pp. 407 - 418 | Objectives | Introduce the basics of benchmarking to management practitioners | Analysis | Classification of benchmarking, benchmarking process model, components in a benchmarking project, hints for organization to conduct first time benchmarking project. | Findings | Identify the sources of best practices as a result of assisting in promoting management perspectives and facilitating the formation of various specific goals. | Article 2 | Benchmarking the benchmarking models | Author | Anand, G., & Kodali, Rambabu | Year | 2008 | Setting/ Place/ Sample | Benchmarking: An International Journal, Vol. 15 Iss 3 pp. 257 - 291 | Objectives | To classify the fundamental benchmarking model and the unique benchmarking model, propose a universal benchmarking model which can be applied for all types of benchmarking | Analysis | Benchmarking the benchmarking models...
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...WHAT IS BENCHMARKING? http://tqmgroups.blogspot.com/p/benchmarking.html “Benchmarking is simply the process of measuring the performance of one's company against the best in the same or another industry. Benchmarking is not a complex concept but it should not be taken too lightly. Benchmarking is basically learning from others. It is using the knowledge and the experience of others to improve the organization. It is analyzing the performance and noting the strengths and weaknesses of the organization and assessing what must be done to improve. REASONS FOR BENCHMARKING There are several reasons that benchmarking is becoming more commonly used in industry; • Benchmarking is a more efficient way to make improvements. Managers can eliminate trial and error process improvements. Practicing benchmarking focuses on tailoring existing processes to fit within the organization. • Benchmarking speeds up organization’s ability to make improvements. • Compare business practices with those of world class organizations • Challenge current practices and processes • Create improved goals and practices for the organization • Change the perspective of executives and managers. OBJECTIVES OF BENCHMARKING ϖ Becoming competitive ϖ Improving industry best practices ϖ Defining customer requirement ϖ Establishing effective goals and objectives ϖ Developing the measures of productivity ...
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...University of South Wales Advanced Management Accounting AF3S127 Benchmarking In today’s Business Environment With initial applications appearing in the 1980’s, benchmarking is now a powerful global mechanism used is business everywhere for process improvements and re-engineering of companies (Beretta, Dossi and Grove, 1998). My aim for this essay is to explain the concept of benchmarking using a range of sources. I will also critically analyze how and why organizations use benchmarking as a weapon to persist in today’s competitive business environment to see if it really is that effective. Benchmarking is the continuous analysis of processes, functions, strategies, performances and many other aspects of a business compared with or between the “best-in-class” organizations by gathering information by using appropriate methods of collection, with the intention of evaluating an organizations current standards and then carrying out self-improvement by applying changes to match or exceed the standards (Anand and Kodali, 2008). Benchmarking is a technique used for continuous improvement of something within a business. It is a way of measuring a firm’s product; services or activities against top other organizations either internal or external to the firm (Drury, 2012). This could be close competition for example; customer service on telephone calls from mobile network providers such as EE and Vodafone, to non-competitive firms using the same example customer service on telephone...
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...Management Chemical Inventory Management Benchmarking Survey Leslie Soderquist, CWI-Chemical Services October, 2007 1 Chemical Inventory Management Benchmarking Survey Purpose: To Survey members of the DOE Site community to identify current practices for the management of chemicals. Topics Covered in Survey: General Site information Chemical Inventory Management System Information Chemical Inventory Process Inventory Accuracy 2 Chemical Inventory Management Benchmarking Survey Process: - Key staff from the Sites below were contacted and provided with a survey. - Most survey’s completed with a phone interview - Completed survey’s were provided to the contact for confirmation - Survey’s tabulated on a spreadsheet Savannah River Site Argonne National Lab Sandia-NM Brookhaven National Laboratory Hanford Los Alamos Pantex Sandia-CA Oak Ridge Lawrence Livermoore Idaho National Laboratory Site Pacific Northwest National Laboratory 3 Chemical Inventory Management Benchmarking Survey Results Site Information Primary Site Function 10 of 12 sites primary function is R&D work. 2 sites indicated Manufacturing 3 sites also indicated they D&D work is a significant function Activities and Operations 12 sites have laboratory operations 3 sites have manufacturing operations 10 sites have Construction activities 8 sites have D&D activities 4 Chemical Inventory Management Benchmarking Survey Results Site Information...
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...The Practice Of Benchmarking And Its Advantages And Disadvantages Introduction Over the years, there has been a tremendous development in benchmarking techniques, in terms of both benchmarking practices and method, which are widely used in different organization to achieve different goals in the developing countries. In this assignment I will discuss the definition of benchmarking and then the use of benchmarking. After that I will discuss the advantage and the disadvantage of benchmarking according the researches and the case studies of benchmarking. Then, I will discuss and analyze the practice of benchmarking to explain why managers find that benchmarking did not live up to their expectation. Finally, the conclusion will have summary of the assignment question. Background of Benchmarking 2.1 Definition of Benchmarking Benchmarking, as the definition of the CEO of Xerox -D.T. Kearns- is the continuous process of measuring the products, the services, and practices against the best competitors or the leader in their industry (Kolarik, 1995). Freytag and Hollensen (2001) states that ‘benchmarking involves measurement of business performance against the best and makes continuous effort in reviewing process practice and method’. This essay is an example of a student's work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing...
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...Jennifer Do April 2, 2001 Section 2 Benchmarking There are many methods used by companies in an effort to improve quality in both their products and services. In the fast paced environment that surrounds industries today, they find themselves faced with the pressure to discover fail proof ways to run their businesses. Techniques that do not turn out successful can harm the company and also result in losses in costs and time. A popular tool used today by many companies is benchmarking. It is a process that involves continuously comparing and measuring against other companies to gain information and learn from their experiences, processes and practices. It provides companies the opportunity to assess their own procedures and helps them to understand their industry better which leads to innovative thinking. It also helps them to identify what changes are essential to improve performance. Some benefits of benchmarking are a better understanding of customers and competitors, reduction in waste, quality problems and reworking, quicker awareness of important innovations, a stronger reputation within the market, and increased profits and sales turnover. Benchmarking is usually done with top performing companies in both the service and the business sectors. Many of these companies are Fortune 500 companies such as Ford, Nissan, or Motorola. However, others include smaller businesses that are only a fraction of the size. These firms looking to benchmark all recognize...
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...Benchmarking: A permanent Process for Excellence Benchmarking is a process in which organizations evaluate various aspects of their processes in relation to best practices, usually within their own sector. It is also a process of identifying other organizations that are best at some facet of our operations and then modeling our organization after them (Operations Management, 9/e, Jay Heizer & Barry Render). It selects a demonstrated standard of performance that represents the very best performance for a process or activity. Benchmarking is `the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized as industry leaders, (that is) ... the search for industry best practices that will lead to superior performance (Camp, 1989, 10). According to these definitions benchmarking helps organizations increase their performance. They compare and measure their policies, practices, philosophies, and performance measures against those of high-performing organizations. Benchmarking could be a onetime event but rather a continuous process in which organizations continually seek to challenge their practices. It is a continuous, systematic process of measuring products, services and practices against organizations regarded to be superior with the aim of rectifying any performance ``gaps’’ because of the existence of strong dynamics in the current business world. The aim of benchmarking is to identify competitive...
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...BENCHMARKING AT XEROX Report submitted in partial fulfillment of the requirement for the Operations Management II Course PGDM Under the Supervision of Ms. Sanjita Jaipuria By Group R To Rajiv Gandhi Indian Institute of Management Mayurbhanj Complex, Nongthymmai, Shillong – 793 014 Nov. 2014 TABLE OF CONTENT Topics Page No. List of Figures……………………………………….................................. 5 List of Tables………………………………………................................... 6 Glossary…………………………………………………………..………. 7 Case……………………………………………………………………….. 8 Annexure 1 …………………………………………………….…………. 11 Annexure 2 ……………………………………………………………….. 12 Annexure 3………………………………………………..……………… 14 Annexure 4………………………………………………..……………… 15 Abstract We have used the Xerox methodology for benchmarking, with some slight modifications that place more emphasis on the planning and analysis phases which are thought to be more relevant to the stage of Total Quality Management. Benchmarking is defined as either internal or external, i.e. competitive, generic, or functional, and we can apply the Xerox methodology to both. We found internal benchmarking very useful initially as it enabled familiarization with the benchmarking process throughout the company and encouraged cross functional communication. It also enable people to make their benchmarking errors within the company. The external benchmarking has been mainly competitive and generic. Much of the benchmarking...
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...The basic idea behind benchmarking is by doing a comparison. An organization finds another organization that is similar and compares them. By studying the achievements of such results; make plans for improving the business performance; implement plans monitor and evaluate the results. By doing the comparison it allows the organization to make the necessary changes, but it is not a quick fix. Benchmarking is vital, by using this practice it can identify costs and provide efficient information that can implement best practice by becoming a central instrument for improvement and the performance of an organization; under the right conditions comparison can be a key driver of performance (OECD, International benchmarking, p. 1). Through benchmarking, many organizations realize that more can be achieved through collaboration between leaders in an industry. There are three primary types of benchmarking used today; first is process benchmarking, which is done at the lower levels of the organization. It focuses on the day to day activities and operations to include anything from customer complaints to the billing process. The changes made on this level improve performance quickly. Second there is performance benchmarking, focuses on competitiveness by looking at where the company’s products and services are in relation to other competitors referring to things such as speed, quality and reliability. Third there is strategic benchmarking, focusing on top management. Discussions are about...
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...involved in Benchmarking. Introduction Benchmarking is the process of measuring an organisation’s internal processes then identifying, understanding and adapting outstanding practices from other organisations considered to be best – in – class. The essence of benchmarking is the process of borrowing ideas and adapting them to gain competitive advantage. It is a tool for continuous improvement, for e.g the Ministry of Civil Service and Administrative reform initiatives and maintains links with other organisations at national and international levels, so as to keep track of latest development in public management practices. BENCHMARKING CONCEPT Benchmarking is a way to go backstage and watch another company’s performance from the wings where all stage tricks and realignments are visible. This can be illustrated as follows: What is our performance level? How do we do it? What are others performance levels? How did they get there? Creative Adaptation Adapted from the Benchmarking Concept : Institute of Industrial Engineers (Page 208), 1995. Breakthrough Performance Benchmarking involves setting standards for business operations based on the best practice that can be found. For example, a business targeting rapid and significant growth may choose comparisons with an established market leader. The term “benchmarking” emerged when the idea took ground in US during 1980s when Xerox, Ford and Motorola became the pioneers of benchmarking in USA...
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...The definition of benchmarking is “the continual process of measuring products, services and practices against the toughest competitors or those companies recognized as industry leaders” (Wheelen & Hunger, 2010). Benchmarking focuses on bettering a company by openly learning how other companies operate and so competing companies can better their business operations. There are usually six steps involved with benchmarking and they are known to be used within companies that are already well managed, instead of focusing on companies that are in poor standings. To me, benchmarking is a positive program. I do not believe it is just another fad. “Benchmarking can help with increase sales, expand goal setting, and lift employees drive” (Wheelen & Hunger, 2010). To look into benchmarking, “the average cost of a benchmarking study is $100,000.00 and involves 30 weeks of effort” (Wheelen & Hunger, 2010). By reading about benchmarking, it seems as if the study would be well worth the money and effort (time put into bettering a company) because the outcome would be on top of what was spent. If my company was already doing well and I took on a benchmarking study and come out on top of what I spent, the time, effort and money would not be a waste. In fact, it would be a positive resource brought into my company. I do believe it is a valuable tool now and will continue to be in the future. References Wheelen, T. L., & Hunger, D. J. (2010). Concepts in Strategic...
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