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Why Benchmarking Enables Continuous Improvement

Dr. Joseph A. DeFeo, CEO Juran Global

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Today’s Agenda

1. Provide five reasons why your organization should benchmark to maintain continuous improvement.

2. Discuss what benchmarking is and an approach to do it.

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Why Juran Global? Professional services firm founded by

the late Dr. Joseph M. Juran.

Advises, Benchmarks, Assess, Educates & Certifies global organizations for 36 years.

Document lessons learned and best practices and author textbooks.

Provide pragmatic solutions to improve business performance…by design.

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An activity which organizations use for discovering better and best practices to establish a leadership position.

Identifies best and even world-class: - Organizations - Products (both goods and services)- Targets of Performance- Business Practices

Juran Global has been benchmarking world-class organizations for almost 25 years and integrates the discovered knowledge into our consulting services and educational products.

What is Benchmarking?

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What We Benchmark

Oil & Gas Example

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Perfo

rman

ce

Goal

s

External Benchmark

Current Performance

Trouble

World Class

FutureNow Time

The Best of the Best

Benchmarking

Effect

Internal Benchmark

Stealing Shamelessly!

Why Benchmarking?

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Understand your current performance levels

Quantify improvement opportunity potential

Focus improvement activities

Evidence base for decision making

Identify strengths and weaknesses

Why Benchmarking?

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Develop and populate set

of KPIs

Compare performance

based on these KPIs

Identify performance

gaps for each

company

Determine best in class performance

Identify best practices in key business

processes

Share knowledge

and learning of working practices

Develop action plans based upon

findings

Provide foundations

for continuous

performance improvement

Why Benchmarking?

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Who to Benchmark?

• Top performers regardless of industry

• Aggressive innovators utilizing new technology

FUNCTIONAL

• Industry leaders• Top performers with

similar operating characteristics

COMPETITIVE

• Top internal performers

• Top internal facilities

INTERNAL

Performance:Who’s Doing it Best?

Process: How Are They Doing It?

Price

Features

High Low

High

Low

Best-in-Class

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Who to Benchmark?

Competitors

Non-Competito

rs

PotentialCompetitors

(Competitive)

DirectCompetitors

Same Industry

Non-Competitive

LatentCompetitors

BusinessPartners

OutsideOf

IndustryInternalGroup

(Functional)

(Generic) (Internal)

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When to Benchmark?

Process Objective Relationship to Benchmarking

Design/Planning

Identify Goals to Design or Improve

to

Learn from best practices Set achievable goals Design better processes

Control/Compliance

Identify means to hold the gains at benchmark levels

Provide data for benchmarking

Continuous comparison Hold gains made

Breakthrough

Improvement

Improve performance to

significantly superior levels

Gain and external perspective

Identify performance gaps Prioritize improvement

projects Sustain results and move

higher

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1. Provides factual basis for

vision

2. Clarifies position &

identifies gaps

3. Goals set on external

reality

4. Best practices inform how to do it

Vision Implement Improvement

Set Goals & Plans

Assess Current

Performance

Sustain Results

5. Continually monitors best practices to maintain performance

5 Ways Benchmarking Enables Sustainable Results

BM To Enable Sustainability

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Phase 1:POSITIONING

ANALYSIS

Step 4: Present Information to Stakeholders

Step 3: Analysis of Best Practices

Step 2: Research, Visits and Information Gathering (& Normalisation)

Step 1: Planning and Project Set-up

Phase 2:LEARNING

FROM BEST PRACTICES

Step 6: Improvement Actions Planning + Implementation

Step 5: Establish Learning from Best Practices

Step 7: Institutionalise Learning

The Juran 7-Step Benchmarking Process©

How to Benchmark

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Total Facility Time & Costs

Business Overheads

Procurement

IT & Telecommunications

Administrative Support

Commercial Activities

Human Resources

Financial Support

Facilities Management

Functional Support

Technical Support

HSEQ

Security

Emergency Services

Laboratory

Electricity

Steam & Hot Water

Fuel Oil

Fuel Gas

EnergyOperations Maintenance

Each area contains specific Cost and Time KPIs

EfficiencyExample

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EffectivenessThroughput &

Utilization Availability & Reliability Occupational Safety & Health Process Safety

Facility Throughput Facility Utilization

Facility Availability Facility Reliability Equipment Downtime

Lost Time Incidents

Non-Lost Time Incidents

Near Misses Safety

Observations Absenteeism

Tier 1 Incidents

Tier 2 Incidents

Tier 3 Incidents

Tier 4 Incidents

Environment Maintenance Management

Maintenance Planning Training

Flaring and Venting

Emissions

Environmental Impact

Solid & Liquid Waste

Waste Recycling

Environment Breaches

Time spent on Maintenance by Operations Staff

Overdue Work Orders Planned versus Corrective

Maintenance Work Orders Preventive & Corrective

Maintenance Condition / Vibration

Monitoring Value of Spares

Planned Hours versus Actual Hours Worked:– Preventive– Corrective

Time Spent on Training

Example

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Corporate, local public and university libraries

U.S. Department of Commerce- current industrial reports

Washington Service Bureau- GAO studies- Congressional reports

Source Type Where To Go Key-word literature search Access data sources

- Dialog- Dun and Bradstreet- Standard & Poor’s- Value Line- Moody’s Investment Service

Specific Resources

APQC Benchmarking Clearinghouse

Association for Manufacturing Excellence

American Marketing Association The Strategic Planning Institute

Industry-specific reports Industry-wide awards Industry expert

recommendations Membership lists Trade show exhibitors

Referral by colleague Professional association Trade publication listing Who’s Who in Consulting Directory of Management

Consultants

Third-party industry surveys References to individuals or

data sources Evaluation of search results

On-lineSearch

Professional/Trade Associations

Consultants/ Process Experts

How to Benchmark?

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Best PracticesIdentified

MythsDestroyed

InvestmentRequirements

IdentifiedMeasuresDesigned

Redesign ChangeManagement

Cost/BenefitAnalysis

AssessSystems

Benchmarking Results

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Independent Facilitator

Confidentiality & Trust

Right KPIs

Clear Definitions

Effective Normalization (apples to apples)

Systematic Approach Thorough Validation

Keep Benchmarking Focused

Lessons Learned

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Lessons Learned

The Process Emphasizes Learning, Not Finding Fault Externally, Not Internally, Focused Improving Performance, Not Dwelling On Past Failures Complementing Other Improvement Efforts Learning, Not Blaming Uncovering Best Practices, Not CulpritsBenchmarking is Not. . . Purely Quantitative Analysis Review of Operations Industrial Tourism Comparing to Similar Organizations Stand-Alone Exercise Buying-In the Unproven Fad Quick and Easy

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www.linkedin.com/company/juran-institute

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Thank You!

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