Benchmarking is an effective quality tool that helps you both learn and confirm. Most organizations/groups (as do individuals) use benchmarking as a measurement vehicle to determine the excellence of their organizations policies, products, programs, strategies (and more) and their comparison to the same policies, products, programs, etc., of other organizations that are known to have or what are perceived to be, ‘better practices’.
The idea is to measure what you do, or perhaps want to do, against what others do…apples to apples.
“If you always do what you’ve always done, you’ll always get what you’ve always got. ”
(Author Unknown)
Benchmarking deliverables:
- By determining the best, the organization can match that best, against their best.
- If there is a better approach uncovered/learned, the bench-marker can determine how to bring that best to their organization
- The bench-marker then can improve their organization
- If, the bench-marker learns that their own process, program, etc., is better than those being benchmarked, then they have confirmed they have a superior process, program, etc.
- The individual can do the same in that comparing his approach to others, he will either learn something new for improvement, or confirm that he is as good or better than those benchmarked.
There is no need to reinvent the wheel. Why not learn from others and use that learning for further continuous improvement?
Here is an easy checklist on the how to benchmark
1. Select the topic you want to benchmark. Narrow the scope to exactly what you are looking for:
NO: How the business operates (too general)
YES: How the purchasing department works effectively with suppliers to reduce costs (more pointed and focused)
2. Determine who is actually very good at reducing supplier costs.
NO: I heard that ABC Company does a good job.
YES: Connect with suppliers and ask them who has a very effective cost reduction programs. Connect with others in your industry/field and ask them who really does a good job. Also, there are various associations/councils that can be utilized that “know the industry”. Note, this is an important step to the process. There should be adequate time allocated to finding the best in the focus of the benchmarking.
3. Connect with the group to be benchmarked, and if they approve being bench-marked, provide them a list of questions (in advance of the benchmarking visit) that drill down exactly into the details of what you are looking for.
NO: How do you do your cost reduction process with suppliers? (Again, too general)
YES: How many suppliers do you have?
How did you develop your cost reduction process?
Did you benchmark someone?
Did your suppliers participate in the process development?
Do suppliers share in savings generated by cost reduction?
How do you measure the results, and how often?
Who is responsible for the process/supplier…the buyer?
Do you recognize suppliers for their contributions, and how if you do?
Can you share your results with us…dollars, or %’s?
More…
(I think you get the idea. Getting down into the details will in effect answer the question…How do you do your cost reduction process?
4. Do the actual benchmark visit (a phone call can work, but a face to face visit is the best). Also, it works best having two or three associates with you, all participating in the benchmarking process. Start through the questions, add more, and document the responses and findings. Remember to treat the host as “the best” and don’t get defensive or negative as to your findings. Sometimes the best is only the best for that given group or organization…and will not fit with yours.
5. Upon returning to your location hold a benchmark review (What did we learn?) session-asap. Review each question presented and the findings and capture them on a flip chart. Once all the questions are completed, add another list of items that were not related to questions. Maybe you learned other gems of information that need to be captured and evaluated.
6. Now for the ‘opportunity chart”. Capture those learnings that you should consider for implementation at your organization. That list of learnings then forms the basis for consideration for change in your process. That list should show our process vs. their process, with measures. Providing some detail about each is helpful.
7. Those practices identified as prime candidates for ‘change to’ should be brought before your larger group or team, evaluated, discussed, and selected for implementation. Put them in priority and create a plan for implementation.
8. Implement, measure, and follow up in a specified time (ie. 6 months) to determine, how it is working so far. Make adjustments or corrections, if needed.
9. Remember to formally thank those that gave you the opportunity to come and benchmark their operation. Hopefully you have developed a good relationship, and you may want to visit gain.
Or, who knows, they may want to benchmark you in the future!
Following these 9 steps will provide you a road map for continuous improvement. Some improvements will be revolutionary (major structural changes) and some evolutionary (step by step, incremental adjustments). Either way, your processes will be measured against the best, improvements made, and your organization will benefit from this spirit of, “continuous improvement beats postponed perfection’.
“We may have a perfectly adequate way of doing something, but that does not mean there cannot be a better way. So we set out to find a better way”.
Edward de Bono, Six Thinking Hats
“Benchmarking provides an inventory of creative changes that other companies (or organizations) have enacted.”
John Langley
Russell J Bunio
6.28.2016
