Benchmarking effectively is essential to survival and to Hoshin Kanri and the principles should be thoroughly understood in order both to make sure that the Strategy remains sound and that the KPIs are valid. In the commercial or industrial world the term is used to describe activities which are aimed to make comparisons against `best' or `better' business practices not just in your own industry but across all industries where valid comparisons can be made.
Benchmarking is essential to be able to:
develop a good business strategy,
prioritise PIs to create and prioritise KPIs
ensure that the organisation is not vulnerable to a ‘loose brick’ attack.
enable a ‘loose brick’ attack on competitors.
keep up to date on the latest practices regardless of industry
ensure the use of the best methods
watch for extraneous threats from legislation, international developments etc.
Ensure the correct priority for continuous improvement
It is a widely held but mistaken belief that Benchmarking can be applied only to our competitors. In fact, there is much more useful information that we can obtain from benchmarking non competitors for a variety of reasons. The main one being that most business processes are not industry specific. For example, the Personnel Selection Process, Management and Financial Accounting, Training, Quality Management etc. are common to most industries. This is useful for two reasons. Firstly, it is much easier to obtain benchmaking information from a non competitor than it is from an organisation which is our sworn rival. In this latter case espionage might be the only means of benchmarking such sources but that can lead to big problems as McLaren discovered in their Formula 1 rivalry with Ferrari. The second and more important reason is that whilst people in the same industry tend to do the same things the same way, it is possible that people in different industries may do the same things but in very different ways e.g. the case of Japanese Shipbuilding methods vs. those used to construct aircraft. The reason is that a lot of benchmarking information circulates in one industry by people moving from one competitor to another, trade magazines pass on information etc. However there is likely to be far less cross over from one industry to another. Therefore benchmarking non competitors can prove effective. Also, non competitors are far more likely to divulge information in benchmarking visits.
When properly applied, benchmarking may be conducted in some principle categories. These are known to us as the seven point benchmark plan. 1. Customer benchmarking surveys
2. Competitor benchmaking analysis
3. Best in class business process benchmarking
4. Best in class technological process benchmarking
5. Best in class task performance benchmarking
6. Internal cultural surveys
7. Financial performance benchmarking
8 ‘Green’ Teams
9. Benchmarking is also essential to know the correct level of resource required to stay ahead using such concepts as Hoshin Kanri, Six Sigma, Lean Manufacturing, Quality Circles and paradoxically Benchmarking itself.
For more information and to acquire the skills to conduct Benchmarking effectively:
Please click below for registration form which may be faxed, emailed or mailed to DHI
Registration form