ONLINE EXCLUSIVE: How Do I Benchmark to Get the Payoff?
Ron Webb and Bill Baker
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| Ron Webb |
We all benchmark every day. Think about it; we buy cars based on our needs, wants, and desires. We choose restaurants based on location, price, menu, and chef. All of this is a benchmark comparison based on our expectations, prior knowledge, others’ recommendations, and our pocketbook. So benchmarking is really an everyday process.
So what’s different about benchmarking in the workplace? Artists take seminars and study with the masters to learn their techniques, style, palette of colors, and thought processes, and then generate their own approaches. Benchmarking at work is no different. By studying someone in another industry, we can learn that he or she may have solved problems that we are just now identifying.
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| Bill Baker |
Take the Southwest Airlines executive who decided that keeping its planes in the air, not on the ground, was the best way to add value to the bottom line. So he had his team study Indianapolis pit crews to learn the techniques (best practices) of fast turnaround in the pits. A fast pit turnaround is crucial to winning at Indianapolis. Although Southwest Airlines is not trying to win a race, it can benefit substantially and gain more revenue by keeping planes in the air, not to mention the customer satisfaction gained by staying on time.
The airline adapted the pit crews’ principles to its airport environment. Other airlines have been trying to emulate its success ever since.
Address Five Aspects
To be successful at benchmarking, you must address five aspects:
- Identify a standard process to follow
- Understand your own process in detail
- Process owners need to buy into the need to change
- Identify successful partners who will share their best practices
- Adapt and implement your own solutions.
These key factors are embedded in the benchmarking process:
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| Most benchmarking processes consist of four phases: plan, collect data, analyze data, report findings/implement changes. |
A standard process to follow: Most large companies have a benchmarking process that consists of four to12 steps. They all break down to four phases: plan, collect data, analyze data, report findings/implement changes. If everyone in a benchmarking activity is familiar with the process, they will be on the same page of the book and important steps will not be omitted. For instance, in the planning phase, make sure that the process selected to benchmark is important and part of the company strategy. If not, pick something that is.
Lengthy benchmarking efforts tend to lose steam and management support, so a relatively short timeline should be adopted. A 90-day fast track process works successfully with committed team members.
A first step after a benchmarking effort begins is gathering all affected stakeholders together and developing a detailed value stream map from beginning to end including the performance metrics (cycle time, quality levels, and customer satisfaction). Once done, it is the baseline for the improvement team to improve the selected process.
Collect data: As part of the data gathering, ask yourself some questions. ”Who is good at this process in my industry? Who is good in other industries? Is there some new technology that might help us be better, and who knows about it?” Many times you have friends and others in your network who can help.
The American Productivity and Quality Center (APQC) Benchmarking Code of Conduct is a great resource for the benchmarking effort. It outlines the “do’s and don’ts” that other companies expect in any sharing exercise. It is also a comfort to others in the organization (such as the legal department and upper management) who may be concerned about sharing. Be sure to tell others that you do not plan to share sensitive or proprietary data.
A simple 10- to 15-question survey is helpful as you initiate conversations and sharing. Once you agree to share, the data collection can be on e-mails, by telephone, or even face-to-face. The idea is to gather best practices and “lessons learned” that will accelerate your improvement cycle. Many times new learning will happen in unforeseen spots, if you are alert and capture them. Remember, you can learn from everyone.
Analyze data: By the time you contact other organizations and narrow your search for benchmarking partners to the “best of the best,” you may have three to five partners who agree to share. Ask them standard questions and correlate the answers to identify the best practices that can be useful to you. They may have been improving this process much longer than you have, so you are leapfrogging all the false starts and prior mistakes they made. Your organization can catch up and leapfrog them. This scenario is like some of the third world countries that bypassed installation of telephone lines and went directly to mobile phones.
By looking at your baseline process and value stream map, identify what steps can be deleted, combined, and improved by what you have found. Many times best practices will need to be changed to meet your company culture, but can be readily adapted.
Report findings/Implement changes: If your stakeholders and process owners have been involved with the benchmarking effort, they are also part of the solution as passionate advocates. “If that other company can do it, so can we!”
Management approval and some resources may be required to implement recommended change based on your benchmarking findings. If change is important to the company strategy, senior management’s response is usually, “How much, how soon?”
Remember that no plan is perfect and you may need to make some mid-course changes and modifications. With the vision gained by benchmarking project stakeholders, they will be more able to keep their eye on the goal, “step function improvement.” Good luck and have fun!
Ron Webb is the executive director of membership and research at APQC. Bill Baker is the Association for Manufacturing Excellence (AME) vice president for alliances. This article is the second part in a series of four articles about benchmarking. “Benchmarking: Learn to Excel Through Change“ appeared in July’s Target Online.
