Performance Performance BenchmarkingBenchmarking

By By

Douglass KellerDouglass Keller

IntroductionIntroduction

• What is performance What is performance benchmarking?benchmarking?

• Why use benchmarking?Why use benchmarking?• Who benefits?Who benefits?• How does the process work?How does the process work?• Significant results of an example.Significant results of an example.

Usefulness of Usefulness of BenchmarkingBenchmarking

• Pareto rulePareto rule

• PDCAPDCA

• Increase profitIncrease profit

• Greater customer satisfactionGreater customer satisfaction

What Is It?What Is It?

• BenchmarkingBenchmarking

• InitiatorInitiator

• TargetTarget

• PerformancePerformance

Performance CategoriesPerformance Categories

• ProductivityProductivity

• Research and developmentResearch and development

• MarketingMarketing

• QualityQuality

• Cost analysisCost analysis

Why?Why?

• Competitive advantageCompetitive advantage

• Increased market shareIncreased market share

• Lower costsLower costs

• Increase salesIncrease sales

Who Benefits?Who Benefits?

• InitiatorInitiator

• TargetTarget

• IndustriesIndustries

• ConsumersConsumers

How Does It Work?How Does It Work?

1.1. Determine Determine weaknessesweaknesses

2.2. Establish a Establish a benchmark teambenchmark team

3.3. Brainstorm Brainstorm potential partnerspotential partners

4a. Gather and study 4a. Gather and study informationinformation

4b. Use third party 4b. Use third party consultantconsultant

5. Apply benchmark 5. Apply benchmark resultsresults

Determine WeaknessDetermine Weakness

• ComparisonsComparisons

• ShortcomingsShortcomings

• GoalsGoals

Form a TeamForm a Team

• Find expertsFind experts

• Involve related departmentsInvolve related departments

• Set objectivesSet objectives

Set TargetsSet Targets

• BrainstormBrainstorm

• ResearchResearch

• ContactContact

• LearnLearn

• ReciprocateReciprocate

Analyze Benchmarked Analyze Benchmarked InformationInformation

• Gather Gather

• AnalyzeAnalyze

• PlanPlan

Third Party ConsultantsThird Party Consultants

• IntegrityIntegrity

• BenefitsBenefits

• RisksRisks

Take ActionTake Action

• Re - address the planRe - address the plan

• Test the planTest the plan

• Study the resultsStudy the results

• ActAct

Dell ComputersDell Computers

• JITJIT

• Online orderingOnline ordering

• Mass customizationMass customization

Dell ComputersDell Computers

• Excellence in turnsExcellence in turns

• AdvantagesAdvantages

• DisadvantagesDisadvantages

Dell ComputersDell Computers

• Ordering onlineOrdering online

• Advantages Advantages

• DisadvantagesDisadvantages

Dell ComputersDell Computers

• Mass customizationMass customization

• AdvantagesAdvantages

• DisadvantagesDisadvantages

ExerciseExercise

Research Dell Computers’ Research Dell Computers’ inventory information and compare inventory information and compare those results with the results from those results with the results from Compaq Computers’ inventory Compaq Computers’ inventory statistics. Which company is the statistics. Which company is the leader and which has something to leader and which has something to learn from their superior?learn from their superior?

SummarySummary

• InitiatorInitiator• TargetTarget• IndustryIndustry• CustomerCustomer• NecessaryNecessary• BeneficialBeneficial

BibliographyBibliography

• InternetInternet, Dell Computers, Benchmarking, and , Dell Computers, Benchmarking, and ConsultantsConsultants

• Managing QualityManaging Quality, S. Thomas , S. Thomas Foster 2001. Pages Foster 2001. Pages 152 – 167.152 – 167.

• Value LineValue Line October 2001. October 2001.

• Operations Management, Operations Management, Chase, Aquilano, Chase, Aquilano, Jacobs Jacobs 2001 Pages 5, 100, and 272.2001 Pages 5, 100, and 272.

• Operations Management, Operations Management, Heizer, Render 2001. Heizer, Render 2001. Pages Pages 176 – 177.176 – 177.