- Describe benchmarking and explain its role in quality management.
Benchmarking is a process that compares the cost, productivity, cycle time or the quality of a specific method or process to another that is perceived to be the best practice or the industry standard. It helps in giving a clear picture of the performance of an organization or business as well as its positioning in relation to a particular standard. Benchmarking often results in the management of a business making changes that are geared towards improvement of its performance (Adebanjo, Abbas, & Mann, 2010). The history of benchmarking can be traced back to cobblers, as a term they used to measure the feet of their clients for shoes. The foot of the interested customer would be placed on a bench and a mark made in order to trace the pattern of the shoe. Benchmarking measures performance using specific indicators. Cost per unit, cycle times of x per unit, productivity per unit and the number of defects per unit are among the indicators that are used in performance benchmarking (Adebanjo, Abbas, & Mann, 2010). This results in a metric of performance that can then be used to compare to others.
In the management of businesses and organizations, benchmarking can either be referred to as ‘best practice benchmarking’ or ‘process benchmarking.’ The management makes use of this process to come up with strategies for the future progress and performance of the business. A business evaluates various aspects of its processes in relation to the best practice in the market. This is usually restricted to a peer group of businesses that have been defined for comparison purposes. The evaluation and comparison of the practices allow a business to come up with improvement plans or adopt the best practices that have been identified by this process (Adebanjo, Abbas, & Mann, 2010). Benchmarking is done with the intention of increasing some performance aspects of a business. Benchmarking can be a one-off event or a continuous process used by the business to improve its performance.
- Provide an example of how a company that you are familiar with could use
benchmarking to improve its performance.
The mobile devices sector is among the most dynamic industries currently. This is because the capability of the mobile devices has been increasing over time, driven by the devices’ capacity to access the internet that enables the users to perform various tasks on the go. The leading companies in the mobile devices market are Apple Inc. and Samsung. These companies can be used to set standards for benchmarking by other smaller companies such as Huawei. In the improvement of the product and processes used in the manufacture of mobile devices, Huawei can use either Apple Inc. or Samsung to set the standards it would like to reach. Apple Inc. is popular for its flagship products such as the iPhone and iPad series. Apple Inc.’s products are designed over a long period to ensure that they exhibit perfection in terms of aesthetics and functionality. Apple Inc. targets the high-end market, and is not concerned with the manufacture of low-cost devices. Samsung, on the other hand, has a variety of products, catering to all the segments of the market. There are numerous Samsung mobile device models meant for the low-end market, while the Galaxy Note and S series are intended for the high-end market. Studying the processes and products of these two companies can assist Huawei in its strategic management by deciding on the business model that should be adopted.
- What is a benchmark project? Give an example.
This is an endeavor to compare the results of an organization or business with those of peers in the same industry (Broderick, Garry, & Beasley, 2010). An example of a benchmark project is having an airline or a hospitality company hiring a consultant to benchmark customer service metrics against those of their close competitors; the metrics can include customer satisfaction.
- What are the processes involved in benchmarking?
The first step that is taken when benchmarking is an evaluation of the performance level of an organization compared to others, and then figuring out what other businesses are doing differently that is making them perform much better than the rest. Having a vivid picture of the relative position of a business in an industry sets the stage for the process of benchmarking (Pipan, Gomišek, & Mayer, 2012).
Identification of the problem areas. This requires a range of research techniques in order to identify the performance challenges facing an organization that is intent on benchmarking.
Identification of other industries that have similar processes. It is not a necessity that the benchmarking is undertaken using a business that is in the same industry. This is because some processes take place in businesses that are in different industries (Broderick, Garry, & Beasley, 2010). The key is to identify the process that the company would like to improve on and then finding another business that is excelling in that process.
Identification of organizations that are leaders in concerned areas of business. The benchmarking management should look for the very best companies in any industry or country. This involves a search for the best company, and the sources can be the consumers, financial analysts, trade associations, suppliers, among others (Adebanjo, Abbas, & Mann, 2010). These give insights regarding the companies that are worth studying.
Researching the chosen companies for measures and practices. Benchmarking targets specific business processes by use of detailed surveys of measures and practices (Pipan, Gomišek, & Mayer, 2012). These are then used to identify business process alternatives and the companies that are excelling at it.
Visiting the “best practice” companies to study the leading-edge practices. In this step of the benchmarking process, the companies agree to share information that will be mutually beneficial to them; the results are shared within the group.
Implementation of the new and improved business practices. The leading-edge practices are taken and used to develop implementation plans. Identifying the available opportunities, selling of new ideas to the business and funding the project are among the tasks that are included in this plan. The aim is to gain value from the process as a whole, for the business.
- How does process benchmarking differ from product benchmarking?
Process benchmarking involves focusing on the business processes of the benchmark firms. This is done by either investigation or observation (Pipan, Gomišek, & Mayer, 2012). This is done with the aim of isolating and identifying the best practices that are applied by the target firms. Activity analysis is done when carrying out this type of benchmarking to determine cost and efficiency (Adebanjo, Abbas, & Mann, 2010). This is mostly applied to the back-office processes, whereby one of the considerations made may be outsourcing. On the other hand, product benchmarking is concerned with the designing of new products or making upgrades to the current ones. Reverse engineering of the products made by competitors is done to determine their quality.
Adebanjo, D., Abbas, A., & Mann, R. (2010). An investigation of the adoption and implementation of benchmarking. International Journal Of Operations & Production Management, 30(11), 1140-1169.
Broderick, A., Garry, T., & Beasley, M. (2010). The need for adaptive processes of benchmarking in small business‐to‐business services. Journal Of Business & Industrial Marketing, 25(5), 324-337.
Pipan, K., Gomišek, B., & Mayer, J. (2012). Exploratory study of quality and excellence approaches and continuous improvement from the perspective of new institutionalism. JEEMS.