Definition:-
Process of comparing results, output, method, process, or practice in a systematic way of improving the organization performance.
Means by which targets, priorities and operation can be established that will lead to competitive advantage.
Proven quality improvement processes in which organization better their product and services by comparing their best performance against the best in class.
Idea of Benchmarking
Summarized by Japanese term dantotsu.
Attempt to become the best of the best.
Involves continuous measurement of company’s product / services practices against standards of the best competitors & the companies who identified as the industry leader.
Resulting in continuous improvement in products & process.
Purpose of Service Quality Benchmarking
The search for the best practice among competitors that lead their superior performance.
Process of measuring performance against the best in the same or another industry.
To establish a standard against which performance is judge.
To identify model for learning how to improve.
Goal:- to meet or exceed that standard through improvement appropriate process.
Benchmark could be the performance of:-
1.Competitors- to seek opportunity for gaining competitive advantage through service leadership.
2.Non competitor- identify opportunity for adopting leading edge from outside the immediate industry / market in which were are competing.
Benchmarking Practices
Internal
Between departments
Industry
International- world class
Benefit of Service Quality Benchmarking
It enables the best practices from any industry.
Provide stimulation and motivation to the professionals.
require to perform and implement benchmark findings.
Breaks down ingrained reluctance of operations to change.
people more receptive to new ideas and their creative adoption.
Identify a technological breakthrough that would not have been recognized.
- bar coding adopted and proven in the grocery industry.
10 Areas of Benchmarking
1. Advertising
- expenditure
- themes
2. Sales
-terms
-sales force
Size
Structure
Training / experience
Compensation
Numbers of calls
Turnover rates
- sales literatures
-proposals
Style
Structure
Pricing
- accountability
- cross selling
3. R&D
Patents
Staff
R&D $/sales
Governments contracts
4. Customers / products
- sales / customer
- breadth of product line
- product quality
- average customer size
5. Distribution
- channels used
- middlemen
6. Marketing
-product / brand strategy
- market share
- pricing
7. Financials / costs
- profitability
- overhead
-return on assets
-returns on equity
- net worth
- margins
- cash flow
- debt
- borrowing capacity
8. Plant / facility
>size
> capacity utilization
equipment costs
- capital investments
- integration level
- quality control
- fixed and variable costs.
9. Organization
- structure / values / general goals
- expected growth
- decision making level
- controls
10. Strategic plans
- short term
- long term
- core business / expansion or stability
- acquisitions
