Dr. S. S.

Bhakar
 Benchmarking for Best Practices

Benchmarking is the practice of being humble enough to admit

that someone else is better at something, and being wise enough
to learn how to match and even surpass them at it.

Benchmarking is a systematic and continuous process of

searching, learning, adapting and implementing the best practices
from within own organization or from other organizations towards
attaining superior performance

- National Productivity Corporation, Malaysia

 Types of Benchmarking

Benchmarking

Internal Benchmarking External Benchmarking

Market related
Plant related (Competition analysis)

Branch related Generic Processes

(Trend research) (Best Practice)

e.g., safety performance measures

 3 Basic Issues in Benchmarking

Basic issues:
Waiting Time for Admission

Where are you now?

Where?
[minutes]

112
90
Why? Why is your organization at
30 this position vs the other?

10

min mean Company max What? What can be improved?

 Benchmarking : An Overview
Company Internal
Spread Sheet Benchmarking
Mon Energy Product 1999

SEC
Jan

Feb 2000
Mar

month

Comp1
Competitive
Comp2 Benchmark

Comp3
 What Is Benchmark?

A measured “best-in-class” achievement, recognized

as the standard of excellence for a particular process

Examples:
• Rate of customer complaint 5%
• Employee satisfaction rate 95%
• Customer retention rate 90%
• Information retrieval time 5 seconds
• Customer response time 15 min.
• Medical Cost per Employee RM16.89
• MC Rate 0.5%
 What Are Best Practices ?

Best practices are a relative term indicating

outstanding business practices which have been
identified as contributing to significant improved
performances in leading companies

Examples :

• Development of in-house trainers and training academy

• Visual management to inculcate culture of excellence
• QCC in building knowledge-based workforce
 Importance of Benchmarking

Objective Without Benchmarking With Benchmarking

To become more adaptive Evolutionary Change Understanding of
competition ideas from
proven practices
Implement Industry best Few solutions, Frantic catchMany options, Superior
practices up activity performance
Defining customer Based on history, Gut Market reality, objective
requirements feeling or Perception evaluation

Establishing effective goals Lacking external focus, Credible unarguable,

& objectives Reactive Proactive

Developing true measures Pursuing projects, Solving real problems,

of productivity strength/weaknesses not Understanding output
understood, Route of least based on industry best
resistance practices
 Benefits of Benchmarking
 Improves organizational quality
 Leads to lower cost
 Creates buy-in for change “If you know neither
yourself nor your
 Exposes employees to new ideas enemy, you will
succumb in every battle.
 Broadens organization’s perspective
If you know yourself but
 A catalyst for learning not the enemy, for every
victory gained you will
 Increase employee satisfaction suffer a defeat.
 Test the internal operating target If you know yourself and
your enemy, you need
 Raise the level of potential performance not fear of a hundred
 Sharing of best practices battles.” -
Sun Tzu
 Understanding world-class performance in-depth
 Encourage and stimulate innovation
 NPC Benchmarking Model
Phase 1 Phase 2 Phase 3
BENCHMARK BEST PRACTICES IMPROVEMENT

Start
5. Plan for Site Visit 9. Plan to Adapt Best
Practices
1. Agree On
Benchmarking Topic 6. Data Collection 10. Implement Best
Practices
2. Finalise On Scope;
Measures & Definitions 7. Recommend 11. Monitoring Result
Improvement
3. Data Collection : 2nd
Site Visit 12. Standardization
Survey (Focus Visit)
Yes
8. Share Findings 13. Daily Control
4. Share Strengths

Continue Existing
Yes Project?
No

New Area