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Business Process Benchmarking

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Abby Christel Cruz

on 14 February 2014

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Transcript of Business Process Benchmarking

Business Process Benchmarking
Malcolm Baldridge National Quality Award (MBNQA) is one of the most prestigious awards instituted by the government of United States of America
PRESTIGIOUS
"BENCHMARKING... benchmarking.. benchmarking.. benchmarking......benchmarking"
Benchmarking will help in identifying the current level of performance of the processes in the organization and bringing them up to the level of best processes
WHAT IS BENCHMARKING???
Benchmarking is a process of comparison of two or more products, services, process or organizational practices.
Robert Camp has given the definition of benchmarking as
"a basis for establishing rational performance goals through the search for industry best practices that will lead to superior performance. "
TRIGGERS FOR BENCHMARKING
Categories of benchmarking
based on what triggers it

Problem based benchmarking
Process based benchmarking
Problem Based Benchmarking
(reactive approach)
arises out of a problem in the organization.

Example
adverse feedback from customer
increasing quality cost
alarming error rates

Process Based Benchmarking
(proactive approach)
it is initiated as part of a process improvement strategy of the organization

Examples:
defined mission
defined objectives
defined practices

Benchmarking is
NOT
comparison
ALONE
During benchmarking, one has to understand the level of performance of the competitors and leaders in the same areas.
The superiority should be revealed by
the quality of product or services, the quality of the business process, and the other performance indicators.
TYPES OF BENCHMARKING
Internal
Competitive
Functional
Internal Benchmarking
establishes good practices in the organization. It is a comparison of similar functions of different operating units within the organization.

Advantages:
Easier to implement
Easier to access data
Disadvantages:
No external ideas
Example of Internal Benchmarking
(error rate: bolts and nuts)

For instance, the error rate in one particular division is 1 part per thousand and in other division it is 1%, then the objective of BPB is to improve the error rate in the weaker !% division to 1 part per thousand.
Competitive Benchmarking
it is to improve the performance to the level of competitors. the competitor's performance data is collected form published data.
HOW TO GET THE COMPETITOR'S PERFORMANCE DATA?
Functional Benchmarking
Methods of organization with similar processes.
calibration laboratory
diagnostic centre
REASONS FOR BENCHMARKING
Benchmarking is carried out to bring out clearly and objectively the real status with regard to the performance of organization as well as the processes.
Benchmarking is a way to improve the processes and reach the top.
IDENTIFYING PROCESS TO BENCHMARK
Every process in an organization has inputs and outputs. The inputs are what are supplied to the process. The processes are repeatable events and the output is what is delivered.
A Prescription of
a physician
(input)
Check patient and measure
pathological parameters
(event)
Diagnostic Report
(output)
Process in a Diagnostic Center
The following steps are involved in identifying what to benchmark:

1. Select processes
2. Determine vital measures
3. Prioritize processes and measures
BENCHMARKING PARTNER
Benchmarking essentially improves the processes in the organization to the level of the best.
WHO SHOULD BE THE ROLE MODEL ???
Selecting the role model requires extensive study of literature and information available in the public domain. The help of customers and suppliers could also be taken to know who is performing better in the industry.
BENCHMARKING
does not.....

COPY
STEAL
STOP
Abby Christel A. Cruz
BSBA 3- Management Accounting
Full transcript