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All Rights Reserved, Juran Global
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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Connect With Us
@Juran_Institute
www.youtube.com/user/JuranInstitute
www.facebook.com/JuranInstitute
www.linkedin.com/company/juran-institute
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More Resources
business innovation business
process improvement continuous improvement dmaic juran quality handbook lean manufacturing lean six sigma lean transformation operational excellence process innovation
quality assurance quality control quality improvement management consultin
g firm iso 9000 2015 six sigma certification what is lean what is six sigma
Click any link for more information
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Thank You!
Copyright ©2015, Juran Institute, Inc. For more information, please visit www.juran.com
Contact us at: [email protected]