Post on 06-Jan-2018
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King Fahd University of Petroleum & MineralsKing Fahd University of Petroleum & MineralsConstruction Engineering & Management DeptConstruction Engineering & Management Dept..
Prepared ForPrepared For : :Dr. Abdulaziz A. BubshaitDr. Abdulaziz A. Bubshait
Prepared ByPrepared By : :Abdullah I. AbuzaidAbdullah I. Abuzaid
June, 2009June, 2009
Benchmarking
CEM 515CEM 515 Term PaperTerm Paper
Outline Introduction
• Definition • Origins• Important of Benchmarking
Benchmarking Process
Benchmarking Methodology
Types of Benchmarking
Criticisms of Benchmarking
Advantages & Disadvantages
Conclusion
Introduction
Introduction
• Benchmarking is a topic of general interest in quality management.
• Benchmarking has reached widespread diffusion and is now considered as one of the most powerful tools for promoting process improvements and re-engineering in many
prominent organizations.• Benchmarking is a popular method for developing
requirements and setting goals.
• Definition There are many definitions according to different perceptions and applications of the technique and philosophy.
• Benchmarking defined as a process for improving performance of any organization by continuously identifying, understanding & adopting outstanding practices and processes inside or outside the organization.
Benchmarking is basically learning from others.
Introduction
• Origins
The term 'benchmarking' was first adapted to business practices by Xerox in 1979.
Xerox’s aim was to evaluate itself, to identify its strengths and weaknesses and adapt to constantly changing market
conditions.
Introduction
• Important of Benchmarking Benchmarking allows you to discover the gaps in your performance
when compared with someone else.
The Benchmarking used for wield rang in organization for many aspects with deferent ranking as showing in the table below:
Introduction
Benchmarking Process
• Basic Steps 1. Planning
2. Analysis
3. Integration
4. Action and Monitoring
Benchmarking Process
Planning Data Gathering and
Analysis
Action and Monitoring
Integration
Benchmarking Process
1.Planning Establish benchmarking roles and responsibilities. Decide what you wish to benchmark. Identify the process to benchmark. Decide against whom you need to benchmark Document the current process. Identify outputs required. Determine data collection methodologies.
Benchmarking Process
2. Analysis Normalise the performance data. Construct a comparison matrix to compare your current
performance data with your partners’ data. Identify outstanding practices. Analys the gaps. Analys factors that create the gaps. Isolate process enablers .
Benchmarking Process
3. Integration Define Set stretching targets “Vision” an alternative process Consider the barriers to change Plan to implement the changes
4. Action and Monitoring Implementation planning Roll-out of new modus operandi (changes) Collecting data Evaluating progress Iterative change
Benchmarking Process
• Questionnaire to Apply Benchmarking
The questionnaire to determineif organisation is ready forbenchmarking or not.
Benchmarking Process
QuestionnaireAmerican Productivity and Quality Centre
( APQC)
Benchmarking Methodology
• Examples of Typical Methods:1. Identify your problem areas
2. Identify other organizations that have similar processes
3. Identify organizations that are leaders in these areas
4. Survey organizations for measures and practices
5. Selecting appropriate benchmarks
6. Finding the source for benchmarking
7. Visit the "best practice" organizations to identify leading edge practices
8. Implement new and improved business practices
Benchmarking Methodology
• Estimated Time and Effort for Benchmarking Process:
Benchmarking Methodology
Chart of the estimation of time and effort for the basicimprovement stages of Organization.
Types of Benchmarking
• There are several different types of benchmarking in which a organization can engage.
• They may come in different forms and names depending on individual perspectives.
• The type of benchmarking selected depends on the measures needed and the methods used to collect the data.
Types of Benchmarking
• The main types of benchmarking: 1. Internal good practice benchmarking. 2. Competitive benchmarking.3. Functional benchmarking.4. Generic benchmarking.5. Strategic benchmarking.6. Performance benchmarking.7. Process benchmarking.8. External benchmarking.9. International benchmarking.
Benchmarking Process
Criticisms of Benchmarking
As with any new concept there are those who are in favour of the idea and those who oppose or criticize it.
• Some of criticisms of benchmarking
1. benchmarking is that it can be considered as spying on the competition.This is not truth:
Benchmarking is not spying on the competition but keeping up with what they and the rest of the industry are doing.
Criticisms of Benchmarking
2. Benchmarking is copycatting . This is not truth:
• Copycatting and Benchmarking are not one and the same.
• Copycatting leads to lessened creativity and stale ideas.
• Benchmarking is not supposed to take the place of managers bringing insight and original strategies into the organization.
• Copycatting is an easy trap for managers to fall into, it is important for managers to realize that benchmarking will never be an excuse for managers to stop being
creative and innovative.
Criticisms of Benchmarking
3. Some organizations do not utilize benchmarking because they feel that if it’s not broke, don’t fix it.
4. Many organizations shy away from benchmarking because they do not understand what benchmarking is and they feel that
they do not have anything to gain.
Criticisms of Benchmarking
Advantages &
Disadvantages
• Advantages :
The advantage of benchmarking is not to compare key figures but to compare how tasks are performed.
There are many advantages of the benchmarking:
1. Learn from others experience & practices.
2. It allows examination of present processes
3. Aids change & improvement.
4. It gives a chance for study & measurement of a competitor for the
purposes of process or product quality improvement.
Advantages & Disadvantages
Advantages & Disadvantages
• Advantages :
5. Benchmarking often proves particularly successful when
comparing processes.
6. Helps the organizations to stay in the business with high
performance
7. Delight the customer of the organizations.
8. Continuous of Improvement and apply benchmarking increased
the opportunity to be world class leader
Advantages & Disadvantages
• Advantages :
9. Sharing the best practices between benchmarking partners.
10. It Iidentifies opportunities for improvement
11. Provides the momentum necessary for implementing change
12. Involves for looking in detail at how other organizations carry
out the same or similar processes.
13. The capability to use for everyone and can be applied to (almost)
any company, any private organization, any public organization.
• Disadvantages:
The advantage of benchmarking is limited and the organization can eliminate the number of disadvantages to gain the benefits of benchmarking.
There are some disadvantages of benchmarking:1. Poorly defined benchmarks may lead to wasted effort and meaningless
results.
2. Incorrect comparisons will effect the result of required improvement and what is best for someone else may not suit to other.
3. Some organizations have reluctance to share the information.
4. Benchmarking cannot change all required improvement at once.
Advantages & Disadvantages
Conclusion
The benchmarking is becoming more commonly used and it is a more
efficient way to make improvements.
Benchmarking speeds up organization’s ability to make improvements.
Benchmarking is not just making changes and improvements for the sake
of making changes, benchmarking is about adding value.
When an organization looks at benchmarking they must look at all aspects
of the business, its products, and its processes.
Benchmarking will not work unless you know yourself.
Conclusion
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