Page 129 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes “Benchmarking is a continuous, systematic process of evaluating and comparing the capability
of one organization with others normally recognized as industry leaders, for insights for
optimizing the organizations processes.”

Self Assessment

Fill in the blanks:
1. …………………… was the first organization which initiated benchmarking concept.
2. The term …………………… was first used by cobblers to measure people’s feet for shoes.

9.2 Levels of Benchmarking

Benchmarking is a tool to achieve business and competitive objectives. It can inspire managers
and organizations to compete. It is powerful and extremely effective when used for the right
reasons and aligned with organization strategy.
The two levels of benchmarking are as follows:
1. Strategic Benchmarking and
2. Operational Benchmarking

9.2.1 Strategic Benchmarking

Strategic benchmarking deals with to management and looks at what strategies the organizations
are using to make them successful. It focuses on how companies compete and deals with long-
term results. It is using best practices to develop corporate, program, product strategies and
results. Most Japanese firms use this technique as they focus on long-term results.

Note Strategic Benchmarking must begin with the assessment of the needs and
expectations of the customer.

Strategic Benchmarking involves studying of corporate level strategies of successful organizations
and comparing it with the organizational strategy to get the additional insights.
Identifying the process outputs most important to the customers (key quality characteristics) of
that process is the first step. This step applies to every organizational function, since each one
has outputs and customers. The QFD/customer needs assessment is a natural precursor to
benchmarking activities.
Strategic Benchmarking includes:

The strategic study of the characteristics of effective continuous improvement strategies
of public and private organizations, of change processes, of leadership styles, etc. to establish
a vision, strategies, leadership competencies, client benefit results;

Specific studies of the strategies and approaches of high performing organizations;
Studies of trends and orientations as guide to actions, e.g., technological trends.
Examples of strategic benchmarking studies includes evaluation of options for the design of an
organisation's governance structure; assessment of approaches used to implement advanced
technology or strategic business issues.

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