Page 137 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes

Note The selection of area for benchmarking must be based on the business strategy of
the organization. Thus the area chosen for improvement must be in line with business
strategy.
Understanding Current Performance: Self analysis is an essential step for benchmarking process.
Every organization which would like to benchmark must have clear knowledge about its own
processes, products and services before it can compare itself with another organization. Hence
it is necessary for the organization to first document its processes. Techniques like flow diagrams,
cause-effect diagrams, etc. can be used for understanding current level of performance in the
chosen areas for improvement.
Planning for Improvement: Planning phase determines the way to conduct benchmarking study.
Organization has to select be benchmarking team and team has to make decisions on
benchmarking and these decisions include type of benchmarking, the data required for
benchmarking, method of data collection and which are the organizations which can be selected
for benchmarking study from which this data is to be selected.

Thus first step in planning is to determine type of benchmarking. Thus organization has to
determine whether to use internal benchmarking, competitive benchmarking or process
benchmarking. Internal benchmarking can be very much useful for large organizations with
several business units to learn best practices within the organization.
Studying Others: Once an organization is selected for benchmarking, the next step is to study its
best practices. Study should focus on how best in the class processes are performed and what are
the ways of measuring outcomes or results of these processes.
Learning from the Data: Once sufficient data is collected about the process or functional area
selected, the benchmarking team can use the information for the analysis. This analysis should
lead to what the organization can learn from the best in the class. It must identify gaps between
the organization’s performance and that of the best in the class organizations. It must also reveal
the amount of gap and possible reasons for the gap. It should also reveal quantum of future
improvements if these practices are learned form the best in the class and implemented successfully
from the process of benchmarking.
Using the Findings for Future Improvement: When the benchmarking study reveals performance
gaps, the outcomes of benchmarking study identifies the actions for future improvement.
Successful changes need a clear communication about the need for changes from the benchmarking
team to all those people who may be involved in the change process.

!
Caution The change process must identify definite goals for improvement, and prepare
action plans for implementing improvement projects.

9.5.1 Xerox Twelve-step Process

The pioneer of Benchmarking Robert Camp (Manager of Benchmarking Competency Quality
and Customer Satisfaction at Xerox) lists the benchmarking process in five phases. These five
phases are divided into 12 steps as under:
1. Planning: This includes the following three steps:
(a) Identify what is to be benchmarked
(b) Identify comparative companies
(c) Determine data collection method and collect data

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