Types of Benchmarking in Total Quality Management
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The document discusses different types of benchmarking used in total quality management including process, financial, performance, product, strategic, and functional benchmarking. It then outlines the typical procedure for benchmarking which involves identifying problem areas, finding other industries with similar processes, identifying leading organizations, surveying companies for measures and practices, visiting best practice companies, and implementing new practices.
Types of Benchmarking in Total Quality Management
- 1. Presented by Dr. R. RAJA, M.E., Ph.D., Assistant Professor, Department of EEE, Muthayammal Engineering College, (Autonomous) Namakkal (Dt), Rasipuram – 637408 MUTHAYAMMAL ENGINEERING COLLEGE (An Autonomous Institution) (Approved by AICTE, New Delhi, Accredited by NAAC, NBA & Affiliated to Anna University), Rasipuram - 637 408, Namakkal Dist., Tamil Nadu. Types of Benchmarking in Total Quality Management
- 2. Types of Benchmarking Process benchmarking The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration. Financial benchmarking Performing a financial analysis and comparing the results in an effort to assess your overall competitiveness. 11/19/2020 2
- 3. Contd.. Performance benchmarking Allows the initiator firm to assess their competitive position by comparing products and services with those of target firms Product benchmarking The process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses. Strategic benchmarking Involves observing how others compete. This type is usually not industry specific meaning it is best to look at other industries. 11/19/2020 3
- 4. Contd.. Functional benchmarking A company will focus its benchmarking on a single function in order to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison. 11/19/2020 4
- 5. Contd.. Procedure The following is an example of a typical shorter version of the methodology: Identify your problem areas Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or indepth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, or financial ratio analysis. 11/19/2020 5
- 6. Contd.. Before embarking on comparison with other organizations it is essential that you know your own organization's function, processes; base lining performance provides a point against which improvement effort can be measured. Identify other industries that have similar processes For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges. These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms. 11/19/2020 6
- 7. Contd.. Identify organizations that are leaders in these areas Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study. Survey companies for measures and practices Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants. 11/19/2020 7
- 8. Contd.. Visit the "best practice" companies to identify leading edge practices Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group. Implement new and improved business practices Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process. 11/19/2020 8