TQMBH14-5 - Session 05

7/23/2019 TQMBH14-5 - Session 05

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Total Quality Management TQMBH14-5

Session 05 COPQ Cases) + Benchmarking

Concepts)

7/23/2019 TQMBH14-5 - Session 05


Dipankar Bose - XLRI

Cost of Quality Cases)

7/23/2019 TQMBH14-5 - Session 05



Benchmarking

7/23/2019 TQMBH14-5 - Session 05



Benchmarking in Quality

Benchmarking is the process of continually searching for

the best methods, practices and processes, and either

adopting or adapting their good features and

implementing them to become the “best of the best.”

Benchmarking is the practice of being humble enough to

admit that someone else is better at something and wise

enough to try and learn how to match and even surpassthem at it

APQC (1998)

7/23/2019 TQMBH14-5 - Session 05



Xerox learned from L.L. Bean, a clothing store catalogue

retailer

Motorola from Domino’s Pizza

Digital Equipment Corporation (DEC) from a seeminglyillogical set of partners that included Scott Paper, Campbell

Soup, Whirlpool, Boeing, Hewlett-Packard, and Apple.

7/23/2019 TQMBH14-5 - Session 05



Types of Benchmarking

Competitive Benchmarking

Functional Benchmarking

Internal Benchmarking

Product Benchmarking

Process Benchmarking

Best Practices Benchmarking

Performance Benchmarking

Strategic Benchmarking

7/23/2019 TQMBH14-5 - Session 05

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Benchmarking Methodology

Competitive

• Industry leaders

• Top performers withsimilar operating

characteristics

Functional

• Top performers

regardless of industry • Aggressive innovators

utilizing new

technology

Internal

• Top performers

within company

• Top facilities

within company

Best Practice

Overlap

7/23/2019 TQMBH14-5 - Session 05


Benchmarking Steps Zairi 1994)

Effectiveness

1. Understand

Internal Process

2. Evaluating Current

Performance

3. Identify Procee

Limitations/

Opportunity for

Improvement

4. Improve Processes

. Measure and

Evaluate

6. Set Internal

Standards

7. Control and Manage

Processes

7/23/2019 TQMBH14-5 - Session 05


Benchmarking Steps Zairi 1994)

Continued

Competitiveness

8. Select Process

Suitable for

Benchmarking

9. Identify

Suitable

Partners

10. Agree on

Measurement Strategy

11. Compare

Standards

12. Understand Why

Difference in

Performance

13. Change Relevant

Practices for Improving

Performance

14. Compare

Standards

15. Repeat Experience

with Same/New

Partners on Regular

Basis

16. Apply

Benchmarking to all

Processes

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External Benchmarking Sources

External Experts

Professional associates

Consultants

Universities Other experts like

Retirees from target organization

Research organizations

Industry watchers Brokerage firms

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Exchanging Information with External

Benchmarking Partners

Obtain priority list of organization to benchmark

Some organizations will not want to become

benchmarking partners

Select measurements to share With an objective of receiving similar information in

return

Legal considerations and ethical considerations

Identify a contact Who will lead to the right person

Decide what can be offered to the benchmarking partner

In return for the efforts by benchmarking partner

Obtain agreement from benchmarking partner

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Spider Chart for Benchmarking

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

A

B

C

D

E

F

Benchmarked

My Organization

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Benchmarking Gaps and Actions

Sources of benchmark gaps Actions required

Relationship between planning goals

and benchmarking process is not

explained

Communication between these is

necessary

Benchmarks not visible during

planning

Benchmarks need to be integrated

with planningThe weightage of various benchmarks

in the overall benchmark process is

not mentioned clearly

A weighted tree diagram can be used

Cost and customer satisfaction in

benchmarking process is not aligned

Cost benchmark should be aligned to

customer satisfactionCollected data from different sources

may not be interrelated to provide a

direction for benchmarking

The planning should be done to

provide direction for improvement in

proper business function

Communication gap between

benchmarking team and people

connected to process under study

Benchmarking team should include

people from affected process

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Barriers to Benchmarking

Fear of being seen as “copying”

Fear of losing competitive advantage by sharing

information

Arrogance – “We are the best, why benchmark?” Benchmarking trap

Benchmark that which is convenient, but may not be

important

Impatience – “A typical trait” Excuses are too easy

Documents

TQMBH14-5 - Session 05