Total Quality Management TQMBH14-5

Session 05 COPQ (Cases) + Benchmarking

(Concepts)

Cost of Quality (Cases)

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Benchmarking

Dipankar Bose - XLRI

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 surpass
them at it
APQC (1998)

Dipankar Bose - XLRI

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

retailer
Motorola from Dominos Pizza
Digital Equipment Corporation (DEC) from a seemingly
illogical set of partners that included Scott Paper, Campbell
Soup, Whirlpool, Boeing, Hewlett-Packard, and Apple.

Dipankar Bose - XLRI

Types of Benchmarking

Competitive Benchmarking
Functional Benchmarking
Internal Benchmarking

Product Benchmarking
Process Benchmarking

Best Practices Benchmarking

Performance Benchmarking
Strategic Benchmarking
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Benchmarking Methodology
Best Practice
Overlap

Competitive

Industry leaders
Top performers with
similar operating
characteristics

Functional

Top performers
regardless of industry
Aggressive innovators
utilizing new
technology

Internal

Top performers
within company
Top facilities
within company

Dipankar Bose - XLRI

Benchmarking Steps Zairi (1994)

1. Understand
Internal Process
2. Evaluating Current
Performance

7. Control and Manage

Processes

Effectiveness
6. Set Internal
Standards

5. Measure and
Evaluate

3. Identify Procee
Limitations/
Opportunity for
Improvement

4. Improve Processes

Dipankar Bose - XLRI

Benchmarking Steps Zairi (1994)

Continued
8. Select Process
Suitable for
Benchmarking
16. Apply
Benchmarking to all
Processes

15. Repeat Experience

with Same/New
Partners on Regular
Basis

9. Identify
Suitable
Partners

10. Agree on
Measurement Strategy
Competitiveness

14. Compare
Standards

13. Change Relevant

Practices for Improving
Performance

11. Compare
Standards

12. Understand Why

Difference in
Performance

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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

Dipankar Bose - XLRI

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
Dipankar Bose - XLRI

Spider Chart for Benchmarking

A

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Benchmarked
My Organization

Dipankar Bose - XLRI

Benchmarking Gaps and Actions

Sources of benchmark gaps
Relationship between planning goals
and benchmarking process is not
explained
Benchmarks not visible during
planning
The weightage of various benchmarks
in the overall benchmark process is
not mentioned clearly
Cost and customer satisfaction in
benchmarking process is not aligned
Collected data from different sources
may not be interrelated to provide a
direction for benchmarking
Communication gap between
benchmarking team and people
connected to process under study

Actions required
Communication between these is
necessary
Benchmarks need to be integrated
with planning
A weighted tree diagram can be used

Cost benchmark should be aligned to

customer satisfaction
The planning should be done to
provide direction for improvement in
proper business function
Benchmarking team should include
people from affected process
Dipankar Bose - XLRI

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

Dipankar Bose - XLRI