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Bench Marking

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BENCHMARKING DEFINITION OF BENCHMARKING: Benchmarking is defined as “measuring our performance against that of best-in-class Companies, determining how best-in-class achieve those performance levels and using the information as a basis for our own company’s targets, strategies and implementation.” (OR) Benchmarking is defined as “the search of industry best practices that lead to superior performance.” The term “best practices” refers to the approaches that produce exceptional results, are usual
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  BENCHMARKINGDEFINITION OF BENCHMARKING: Benchmarking is defined as “measuring our performance against that of best-in-class Companies, determining how best-in-class achieve thoseperformance levels and using the information as a basis for our owncompany’s targets, strategies and implementation.”(OR)Benchmarking is defined as “the search of industry best practices that leadto superior performance.” The term “best practices” refers to theapproaches that produce exceptional results, are usually in terms of use of technology or human resources. DEFINITION OF BENCHMARK: A benchmark is a point of reference against which things are measured. Inbusiness, these points of reference or standards can take many forms. Theyare measured by questions about product or service. By studying otherorganizations and comparing the answers to these questions, we will be ablemeasure our performance against that of others.As a result, we will be able to set new goals and adapt best practices to ourorganization. THE XEROX EXPERIENCE: Xerox instituted the benchmarking process in the 1980’s because thecompany’s market share shrank to 35 percent in 1981 even though thecompany invented photocopier in 1959 and maintained a virtual monopolyfor many years thereafter (Xerox name became a generic name for all thephotocopiers.On introducing benchmarking process, Xerox met resistance at first by itsemployees who did not believe that someone else could do it better. Whenfaced with the facts, reaction went from denial to dismay to frustration andfinally to action. Once the process began, the company benchmarkedvirtually every function & task for productivity, cost and quality. THE MOTOROLA EXPERIENCE:  In the early 1980’s, Motorola set a goal of improving a set of basic qualityattributes tenfold  in 5 years. Based on internal benchmarking, the goal wasachieved in 3 years. The company began to look outside, sending teams tovisit competitor plants in Japan. To their chagrin, the team found thatMotorola could improve its tenfold  improvement level another two or threetimes just to match the competition. LEVELS OF BENCHMARKING:  To compare one’s business practices with those of other organizations, fourcommon approaches to benchmarking are adopted. They are: ã Internal benchmarking ã Competitive benchmarking ã Non competitive benchmarking ã World-class benchmarking 1)Internal benchmarking: It is done within one’s organization or perhaps in conjunction withanother division or branch office. Internal benchmarking is the easiestto conduct since data and information should be readily available andconfidentiality concerns are minimized. 2)Competitive benchmarking: It involves analyzing the performance and practices of best-in-classcompanies. Their performance becomes a benchmark to which a firmcan compare its own performance and their practices are used toimprove that firm’s practices. 3)Non-competitive benchmarking:  It is learning something about a process a company wants to improveby benchmarking including- ã A related process in the industry with a firm, the company doesnot directly compete with ã A related process in a different industry ã An unrelated process in a different industry 4)World-class benchmarking: It is the most ambitious. It involves looking towards the recognizedleader for the process being benchmarked- an organization that does itbetter than any other. TYPES OF BENCHMARKING:  Three major types of benchmarking that have emerged in business are: ã Performance benchmarking or operational benchmarking ã Process benchmarking or functional benchmarking ã Strategic benchmarking 1) Performance benchmarking:  This involves pricing, technical quality, features and other quality orperformance characteristics of products and services. This is usuallyperformed by direct comparisons or “reverse engineering” in whichcompetitor’s products are taken apart and analysed. This process is  also known as “operational benchmarking” or “competitivebenchmarking”. 2) Process benchmarking:  This centers on work processes such as billing, order entry oremployee training. This type of benchmarking identifies the mosteffective practices in companies that perform similar functions.For example, the warehousing and distribution practices of L.L. Beanwere adapted by Xerox for its spare parts distribution system. 3) Strategic benchmarking:  This examines how companies compute and seeks the winningstrategies that have led to competitive advantage and market success.One way to determine how well a company is prepared to compete in asegment and to help define a best-in-class competitor is to construct a key success factor  (KSF) matrix. AREAS TO BENCHMARK:  Customer service levels  Inventory management  Inventory control  Purchasing  Billing and collection  Purchasing practices  Quality process

Tech lite finals

Oct 13, 2017
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