Understanding benchmarks and benchmarking systems

Craig A. Stevens CraigAStevens@WestbrookStevens.com for Vanderbilt Management of Technology 20121009 - 20180227

This is Craigâ&#x20AC;&#x2122;s Change Management Umbrella

2nd Order Changes – Major Steps in Implementing Strategy Before the Change

During the Change

After the Change

The Three Phases of Change • Before the Change – Build Momentum and Prepare • During the Change – Master the Implementation • After the Change – Prepare for the Next Change Copyright © 2007, www.WestbrookStevens.Com

Adapt

Adaptation or Evolution Adapt

The Three Phases of Continuous Improvement Adapt

Start

• Before the Change – Prepare • During the Change – Master the Implementation • Assessment • Problem Solving • Implementation • After the Change – Prepare for the Next Change

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Defining Benchmarks, Benchmarking, and Benchmarking Systems Benchmarking Tools Whys of Benchmarking Benchmarking Types Benchmarking Ethics Problem Solving (Red Flags) vs Finding Examples of Excellence (Green Flags) Benchmarks The Benchmarking Process CraigAStevens@WestbrookStevens.Com

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Benchmarks are Nouns Benchmarking is a Verb Benchmarking Systems are Nouns ▪ Infrastructure ▪ People/Resources ▪ IT

▪ Processes

CraigAStevens@WestbrookStevens.Com

Benchmarks on a Map can be divided into two general groups: ▪ the "vertical control points" are points that mark a

very precise elevation above the standard datum plane (usually referred to as elevation above sea level) and ▪ the "horizontal control points" are points with precisely established latitude and longitude U.S. Geological Survey –02/16/2012 http://gallery.usgs.gov/sets/USGS_Museum/list/_/1 CraigAStevens@WestbrookStevens.Com

Benchmarking is the process of continuously measuring and comparing oneâ&#x20AC;&#x2122;s business processes against comparable processes in leading organizations to obtain information that will help the organization identify and implement improvements. Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 154, ASQ Quality Press Milwaukee, Wisconsin, 2007.

Craigâ&#x20AC;&#x2122;s Commentsâ&#x20AC;Ś.May only happen once. Benchmarking is not necessarily a continuous process. However it is an act of finding what others are doing well (usually different non-competitive to us type organizations). Benchmarking may also be internally focused.

CraigAStevens@WestbrookStevens.Com

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The American Productivity & Quality Center defines benchmarking as:

"'the process of identifying, understanding, and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance." http://www.prosci.com/benchmark.htm

CraigAStevens@WestbrookStevens.Com

A tool for Process Improvement that creates the systematic and repeatable processes, systems, infrastructure, and ways of doing benchmarking exercises.  Often Requires a Project Approach with a Team  Requires Cooperation Between the Mentoring Organization and the Learning Organization  Often Compares Like Processes of Un-like Organizations  May Use a Set of Benchmarking Tools

CraigAStevens@WestbrookStevens.Com

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Example of Benchmarking Tools From Method Coach Website, 2012 02 16 http://www.methodcoach.com/#/mapbenchmarking/4552685290

CraigAStevens@WestbrookStevens.Com

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Goes through a lifecycle.

Embryonic

Mature Growth Aging

Entrepreneur

Sophisticated Critical Administrator

Opportunistic

Embryonic

Feasibility

Products Lifecycles

Entrepreneur

Growth

Mature Operation

Aging

Acquisition or Development

Disposal

Sophisticated Critical Administrator

Opportunistic

Decline

Maturity

Growth

Introduction

Development

Cash

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Revenue Profit

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Measurement ▪ Both Ours and Partners’ performance

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Comparison ▪ Of performance levels, processes, practices, etc.

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Learning ▪ From partners

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Improvement ▪ Ultimate objective CraigAStevens@WestbrookStevens.Com

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 221, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Helps to Develop a Critical Attitude Toward Business Processes Encourages an Active Learning Process and Motivates Change and Improvements Helps Us Find New Sources for Improvement and New Ways of Doing Things Helps us Develop Performance Measurement

CraigAStevens@WestbrookStevens.Com

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 155, ASQ Quality Press Milwaukee, Wisconsin, 2007.

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 221, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Partners ▪ Internal Benchmarking (Benchmarking Within Own Class) ▪ Competitive Benchmarking (Benchmarks of Parallel Class) ▪ Functional Benchmarking (Benchmarking of Related Task in Same Technological

Area) ▪ Generic Benchmarking (Could be Benchmarking of Best in Class)

CraigAStevens@WestbrookStevens.Com

Related to - Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 155, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Types of Measures ▪ Performance (Benchmarks) ▪ Process (Benchmarking) ▪ Strategic (Benchmarks)

CraigAStevens@WestbrookStevens.Com

Related to - Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 156, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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One-on-one Comparison

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Comparison in a Group

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Anonymized Comparison Through a Third Party Related to - Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 158, ASQ Quality Press Milwaukee, Wisconsin, 2007. CraigAStevens@WestbrookStevens.Com

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Golden Rule When in doubt, Don’t do it. Caution When Sharing with Suppliers, Customers, or Competitors Do Not Share: ▪ Prices or Pricing Policies ▪ Marketing Strategies ▪ Production Capacities ▪ Product Standards

Related to - Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 159, ASQ Quality Press Milwaukee, Wisconsin, 2007.

▪ Other Commercial or Sensitive Information CraigAStevens@WestbrookStevens.Com

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A= Assessments Phase

R = Readiness Phase Problem Solving Solutions

1st Order Changes – Continuous Improvement ▪ Operational Assessment ▪ Problem Solving ▪ Implementation

I = Implementation Phase

A= Assessments Phase

R = Readiness Phase Problem Solving Solutions

I = Implementation Phase

The Goal is to “Only” Plant Flags • Plant Red Flags for Problems to Solve • Plant Green Flags for examples of excellence that will be come Green Flag Reports for other to emulate • Create a portfolio of red flags

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Are measures of performance ▪ Should be Statistically Sound

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Are directional in nature Based on some strategic goal ▪ Indicators reflect some criteria related to the strategic goals

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Look for the best in class ▪ Could be competitors (Not likely candidates for Benchmarking)

▪ Could be non-competitors (May become candidates for Benchmarking) ▪ Could be internal groups (May become candidates for Benchmarking)

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Look at industry standards (too but not only)

CraigAStevens@WestbrookStevens.Com

Specific Subject/Process Measures of Industry Standards  Compared to a Specific Organization  

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Steps 5: Adapt – Choose “best practice,” adapt to the company’s conditions and implement changes

1: Plan – Critical Success Factors, Select a process for benchmarking, document the process, and develop Performance measures

4: Analyze – Identity gaps in performance and find the root causes for the performance gaps

2: Search – Find benchmarking partners

3: Observe – Understand and document the partners’ \processes both performance and practice.

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 161, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Select the process to benchmark Establish a benchmarking team Understand and document the process to be benchmarked Establish performance measures for the process.

CraigAStevens@WestbrookStevens.Com

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 160, ASQ Quality Press Milwaukee, Wisconsin, 2007.

A= Assessments Phase

R = Readiness Phase Problem Solving Solutions

I = Implementation Phase

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Compile a list of criteria that an ideal benchmarking partner should satisfy ▪ Geographic Location ▪ Size ▪ Technology used and markets served

▪ Industry ▪ Structure and organization

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Search for potential benchmarking partners Compare the candidates and select one or more partners Establish contact with the selected partners and gain acceptance for their participation in the study Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 162, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Assess the information needs and information sources Enablers Performance Level

Practice Enablers

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Select a method and tool for collecting data and information. Perform data collection and debriefing

CraigAStevens@WestbrookStevens.Com

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 164, ASQ Quality Press Milwaukee, Wisconsin, 2007.

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Sort the collected information and data Quality control the collected information and data Methods\Tools Questionnaire Interview Postal Investigation

Telephone

X X

Partner Visit

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X X

Direct Observation

Normalize the data Identify gaps in performance levels Identify causes for the gaps Bjorn Andersen, Business Process Improvement

CraigAStevens@WestbrookStevens.Com

Toolbox, Second Edition, Page 164, ASQ Quality Press Milwaukee, Wisconsin, 2007.

A= Assessments Phase

Goal is to “Only” Find Solutions

GFR GRF

R = Readiness Phase Problem Solving Solutions

Solutions Solutions

GFR Solutions Solutions Solutions

Solutions I = Implementation Phase

• From the portfolio of problems, prioritize and select. • Use GFR, Lean, Six Sigma, etc. to solve. • Create a portfolio of solutions/projects.

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Describe the ideal process and summarize improvement actions based on it. Set targets for the improvements. Develop an implementation plan, carry out the plan, and monitor the progress. Write a final report from the benchmarking study.

CraigAStevens@WestbrookStevens.Com

Bjorn Andersen, Business Process Improvement Toolbox, Second Edition, Page 164, ASQ Quality Press Milwaukee, Wisconsin, 2007.

A= Assessments Phase

Goal is to Implement Solutions

Fix Fix

Do Do

Fix

R = Readiness Phase Problem Solving Solutions

I = Implementation Phase

Do Do Do

• From the portfolio of solutions/projects, prioritize and select. • Use Project Management to implement • Concept Phase • Planning Phase • Execution Phase • Transition Phase

2nd Order Changes – Major Steps in Implementing Strategy Before the Change

During the Change

After the Change

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