Benchmarking strategy - chapter2

 Chapter two                                       

  What to Benchmark

1. Introduction
   -benchmark professional realize that it is the focus of benchmarking activities on the business processes and on the improvement of those processes, that yields the greatest payback.
   -all approaches of benchmarking must be to improve business processes, and this is the main route to planned, disciplined, and successful continuous improvement.
   -process has inputs, process steps. outputs, results, and feedback.
   -process can be defined as mechanism by which inputs are transformed into outputs
   -in analyzing what to benchmark, examine activities that constitute a customer interacton from beginning to end of the process.
   -the inputs are identified as customer inquiries, the outputs are identifies as satisfied customers, and the results measure is identified as percent customer purchasing.

2.Decide what to benchmark
     deciding what to benchmark related to the questions:
   -which process is causing most trouble?
   -which process contributes most to customer satisfaction and which is not performing up to expectation?
   -what are the competitive pressures impacting the organization the most?
   -what processes or functions have the most potential for differentiation our organization from the competitors?
   -identify critical success factors within the business unit.
3. Understanding current performance
   -formation of benchmarking team (preferable cross-functional team)
   -collect all documented information related to firm's current performance
   -using cause-affected diagram, flow chart, check sheet, fish bone diagram to problem in those processes.
   -summarize findings from firm's current performance.

4.Planning

   -prepare list of activities for benchmarking

   -list of benchmaking partners, the best practice in industry on hierachy order

   -determine the scope of benchmarking

   -Procedures for each activities

   -Responsible person

   -Time frame

   -outputs from the benchmarking

5.Study others

-in studying  others, two types of information are required:

      +description how best-in –class process are practiced

      +measurable results of those practices

-sources of information:

     +Internal-recorded data(ratio)

     +data in public domain

     +original data (data from field research through interview, observation, site visit, and group focus)

     +research companies

     +Internet

     +employees, distributors, retailers...

6.Concept of step zero

  -the concept of step zero is to go through the first fewer steps of quality process.

  -the quality process normally has four steps:

     +determine outputs

     +identify customers

     +determine customer requirements

     +develop specification to meet those requirements

6.1. the concept of step zero in benchmarking process

   -define the outputs or goals of benchmarking team

   -determine the customers of the now-defined outputs or goals

   -determine customer requirements from the benchmarking

   -communicate to customers its understanding of the requirements, including how it will work, key milestone date, progress reporting, and outline of specifications it believes will meet customer requirements.

7.Analyze company &departmental priorities

   -collect all information that give it some guidance on firm’s directions and departmental direction

   -clarify vision, mission, objective, or statement to benchmarking members, as this will be instrumental in directing team’s efforts.

   -the analysis of firm’s current activities in comparison to firm’s overall vision, mission, goals indicates priorities where team efforts should focus on benchmarking for improvement.

   -the inputs from customers on firm’s performance must also be analyzed so that dissatisfactions can be identified for benchmarking to improve.

-the combination of customer inputs and firm’s current performance provide the needed directions for benchmarking team.

8.Business process

Steps in identifying and classifying   business process:

   -create a high-level, overall process view of organization i.e. how customer is handled from beginning to end.

   -classify the basic business process that support the high-level organization description.

   -determine the critical measurement for the now-defined business process

8.1.identify business process

Create a helicopter-view flowchart of the organization

   -identify the normal workflow mapped from beginning  to end cross a flow chart.

   -another way to identify business process is to identify the logical progression of developing and producing products or services and delivering them to customers.

   -each functional department can present their workflow

   -the team may also conduct interview  functional department concentrating on what they do to identify different workflows.

   -determine vital few

8.2.classify business process

   -explain the rational of business process

   -Logical layers or sequence of various steps in the process

   -determine the outputs of each process

   -determine the boundaries of each step and each process

   -determine who own or responsible each step and the whole process

   -determine who is accountable for detailed understand and improvement through benchmarking

8.3.determine the results measure

   -determine key performance measures of corporate, division, and functional department.

   -using the process diagram, and understand it , will clarify the correct performance measures to select.

   -actual statistics or numerical value of pre-benchmarking

   -actual statistics or numerical value of in-process measures

   -actual statistics or numerical value after benchmarking

9.Focus of investigation

Two key points require in the focus of investigation:

   -adjust the focus of benchmarking form broad to narrow,

     +too large project may fail

     +research reveal that narrow project  return with satisfied success

   -determine the boundaries of investigation

     +not to allow the process scope become too large

     +determine the beginning and end of investigation

10.Document the priority work process

Basic elements and minimum requirement to documenting business process:

   -picture of the process(using flowchart)

   -narrative description of the process

   -description of the process steps (what is done)

   -description of the practice at the process step (how it is done)

11.Other way to prioritize work process

   -what business area or function is addressed?

   -what is the parent process?

   -what subprocess is documented?

   -what is its description?

   -who is the owner or supplier of the process?

   -what are the process inputs? What are the outputs?

   -who is the customer for the process?

   -what are the customer of output requirements?

   -what are the supplier specifications or those requirements?

   -what are the current measurements for the process?

   -what are the measurement specification limits?

   -what is the process inspection method and frequency?

   -what resources are required to maintain the process  in operation?

12.Prepare project description

The project description should include:

   -the purpose of the project

   -topic and work process selected and why

   -scope of the project

   -vital few output and process measures

   -description of the key practices

   -estimate potential opportunity for improvement

   -what and whom will be affected by the results expected.

The end chapter2

Prepared by chanthol advisor