Benchmarking how to start

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Benchmarking how to start
Presented by
Gerard Colla Australian Continuous Improvement
Group
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Benchmarking how to start

• Benchmarking Basics
• Tips Traps
• Questions

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Benchmarking is

• the search for better practices that will lead to
  improved performance
• a key element of your ongoing Continuous
  Improvement process

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Benchmarking is
Continuous Improvement Cycle
Best/ Better Practice
Benchmarking
Current Performance
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Types of Benchmarking

• Internal Benchmarking
• Comparison of similar operations or functions
  within an organisation.
• External Benchmarking
• Competitive
• Benchmarking in the same markets against
  organisations that produce competing products or
  services.
• Industry
• Benchmarking externally against others in the
  same industry who are not direct competitors.
• Best-in-Class Benchmarking
• Benchmarking externally but not necessarily in
  the same industry.
• Best Practice Framework
• Benchmarking against industry accepted Best
  Practices.

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What does SEF2 look like?
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Types of Benchmarking

• Performance Benchmarking
• Comparison of performance data from each of the
  partner organisations
• Cant tell how the best performers do it
• End-result is league table
• Process Benchmarking
• Detailed examination of how each of the partners
  delivers its services, as well as what
  performance results they get
• Leads to discovery of better practices, maybe
  even best practices, if you choose the right
  partners

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The BenchmarkingCycle
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1. Identify Process to Benchmark

• Benchmark what is important
• Start with a macro view (the big picture)
• Conduct an assessment or review
• Develop selection criteria

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Start with an Organisational map
OUTPUTS
INPUTS
Plan Manage
Sector plans
Corporate planning
Policy
Annual planning
Budget ceiling
Manage the business
Deliver Service
Acquire Technology
Visit farmers distribute information
Acquire Information
Conduct field days demonstrations
Transform Information into Field Tools
Provide commercial advice to farmers
Acquire knowledge skills
Supply livestock seedlings
Acquire livestock seedlings
Facilitate access to credit
Facilitate access to credit
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1. Identify Process to Benchmark
Checklist for selecting a benchmark topic

• The process or service
• Is critical in meeting clients/ customers
  needs.
• Is particularly costly or wasteful (rework, time
  waster).
• Is resource intensive.
• Is the source of other problems.
• Has the highest potential for improvement.

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1. Identify Process to Benchmark
Common Pitfalls

• Not educating people about benchmarking before
  starting
• Gathering detailed data too early
• Not valuing the strategic view end up spending
  time on things which have low impact
• Starting too big scope creep
• Political motives

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2. Form the Benchmarking Team

• Form a team of 6 to 8 staff to examine the
  process and do the benchmarking.
• Train the team in benchmarking.

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2. Form the Benchmarking Team
Handy Hints

• Include
• Key stakeholders and process/ service experts
• A senior person as sponsor
• At least one person who doesnt know the process
• People who have respect for their peers
• At least one person who has a flair for analysing
• Who genuinely want to improve
• Assign a competent team leader
• Provide adequate training with practice
• Provide access to a benchmarking buddy

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2. Form the Benchmarking Team
Common Pitfalls

• Not having a mix of skills attitudes.
• Including people who perceive that jobs are
  threatened.
• People dont appreciate the time involved.
• Support in name only!
• Not managing expectations or other agendas.

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The Benchmarking Cycle
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3. Understand the current process
Define the Process

• Define process boundaries
• List process objectives
• Identify outputs, customers
• Map the process
• Define key success factors for the process
• Define key performance indicators

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3. Understand the current process
Performance Measures

• Customer satisfaction rating
• Response time
• Accuracy
• Rate Recovery
• Overdue
• Unit cost
• Labour hours per notice
• /rate notice
• Overdue rates recovery cost

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On time train arrivals performance is 98

3. Understand the current process

• Over what period ?
• What constitutes on-time ?
• Who records the data ?
• Who and how is the data communicated ?
• Do you trust this measurement ?

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3. Understand the current process

• Use exact definitions of the subject, the
  measure, and the elements that make it up
• Be clear about where the information is to be
  sourced from
• Use several measures to provide an accurate
  picture

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3. Understand the current process
Handy Hints

• If you find an improvement you can make now
  just do it!
• Use process analysis experts to guide you

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3. Understand the current process
Common Pitfalls

• Not providing training in process analysis
  performance measurement
• Poor performance measurement definition
• Not including process experts when mapping the
  process
• Relying on anecdotal feedback rather than facts
• Analysis not rigorous enough
• Rushing to get on with it
• Dragging the data analysis out

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4. Establish benchmarking partners

• Sources include professional associations,
  networks, internet, consultants
• Identify contact partners
• Exchange performance data
• Share process information
• Visit
• Bebrief

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4. Establish benchmarking partners
Develop selection criteria

• Size people, locations, geography
• Characteristics of customers or industry
• Private or Public
• Extent of IT maturity
• Regularity or IR environment

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4. Establish benchmarking partners
Approaching potential partners

• Be open and transparent about your intentions
• Be ready to talk specifics
• Duration
• How many people you want to bring
• What types of people or roles you want to meet
  with
• Which processes you want to review
• What data you want access to
• Whats in it for them
• Agree dates
• Agree a clear contact person

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4. Establish benchmarking partners
The Visit

• Before - do lots of research structure the
  visit
• During -
• Be open and honest
• Ask Why why why
• Treat everything as an opportunity dont judge
• Seek data or other evidence to support
  observations
• Offer equivalent information
• Offer a reciprocal visit
• After debrief asap document observations

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4. Establish benchmarking partners
Handy Hints

• Find more than 1 partner!
• Be honest and transparent, and willing to share
• Prepare your case well whats in it for them?
• Consider using a third party to make contact
• Develop selection criteria
• Be realistic - on closer inspection you might see
  their warts!
• Allow plenty of time

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4. Establish benchmarking partners
Common Pitfalls

• Just going with someone you know
• Not defining clearly enough what you want
• Being impatient when they are not as enthusiastic
  as you

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The Benchmarking Cycle
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FINAL TIPS

• Senior management support
• Start small a small win is better than no win
• Make sure process is relevant and high profile
• Make it manageable in a reasonable time frame
• Apply appropriate resources
• Clear definition
• Balanced set of performance measures
• Appropriate partners

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TRAPS

• Being Best in Class is no good if its the
  remedial class....
• Comparing Apples and Oranges (but sometimes you
  can learn a lot from the oranges!)
• Poorly defined performance indicators
• No data available
• Too much data (and not enough information)
• Insufficient skills
• Poor planning
• No senior management ownership
• Organisation culture resists change (the so
  what? response)

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