Benchmarking December 10, 2018 – Posted in: Buy Essay Cheap Online
Benchmarking is a vital strategic management tool of total quality management that organizations regardless of the nature of their business or industry employ to enhance transparency and performance (Sajjad & Amjad, 2012). Companies who benchmark do not have to reinvent the wheel, hence they follow others to make improvements and not focus on old concepts. Organizations with both the public and private sectors continuously strive to improve their products and services’effectiveness and efficiency. Benchmarking is classically perceived as a tool for improving the performance and competitiveness of a company. The technique involves researching the best practices in the industry, company, or process level. This essay discusses the concept of benchmarking in total quality management.
Bench marking and its Role in Quality Management
The myriad of benchmarking definitions makes defining the concept rather confusing.However, it refers to the process of improving organizational performance through continuous identification, understanding, and adoption of great practices within and outside an organization (Sajjad & Amjad, 2012). The technique technically involves learning from others by using their knowledge and experiences to improve the organization. The essence of benchmarking is a company moving from where it is to where it wants to be. The process involves five phases including planning, analysis, integration, action, and maturity.Three types of benchmarking are performance or operational, the process of functional, and strategic benchmarking.
Although benchmarking is not a complicated concept, organizations cannot overlook it and must appreciate the critical role it plays in quality management. Benchmarking can be used as a competitive tool in quality management by creating an organizational culture which emphasizes continuous improvement to achieve excellence. It increases the capacity of an organization to make improvements. Additionally, the tool focuses on corporate resources by setting performance targets with employee input as well as raising awareness of the dynamic customer needs.
A Benchmarking Case
Benchmarking can benefit from large corporations and small and medium-sized enterprises(SMEs). ABC, an e-retailer can use benchmarking to determine the strength of its performance against competition within the retail sector. This will give the company a clear picture of areas that require improvements and how it can increase its profits. It can use the financial benchmarking data to determine its earnings and expenditures on marketing, rent, staff, training, as well as other expenses in comparison with the rivals. Through this benchmark, the organization could realize its rental expenditures is relatively high, hence the need to consider renegotiating the rental rates. Similarly, a discovery on higher inventory costs than competitors triggers the need to minimize wastes or renegotiate better prices with the vendors. Also, lower income per employee than the industry average demands the need to assess profitability and training of the workforce. This is an illustration of how an SME like ABC can leveragethe power of benchmarking to increase its competitiveness, productivity, andprofitability.
In project management, a benchmark project is a project conducted with the goal of benchmarking. It is a project that an organization performs within or outside the organization to measure its performance against the most prominent company players and determining the best practices at the organizational, industry, or process levels. Xerox Corporation provides an excellent case example of a benchmark project. The company conducted a competitive benchmark project when it was experiencing market erosion due to stiff competition from the Japanese retailers. The competitors were marketing higher quality products at the same or lower price than Xerox to the U.S. market (Bhutta & Huq, 2009). The company studied these organizations and discovered that they were assembling quality products at a low price. Then, they made competitive benchmarking a vital component of their operations and studied companies both within and outside their industry. The company completed over 230 process performance benchmark projects determining the best practices employed by others and adopting them for their use.
As a continuous improvement program, benchmarking involves a series of phases that organizations can adopt. It is because the process follows a structured and systematic approach (Prabhakar, 2017). The method mainly involves five stages which include planning, analysis, integration, action, and maturity.
The planning phase represents the initial step in the benchmarking process. During this stage, an organization identifies what it wants to benchmark which includes the product, service, or process. The top management should be involved during this stage to determine the critical success factors for the company. The company should adopt a top-down approach. Then, identify the comparative companies who are the organizations to benchmark. Selecting many organizations for the study is essential. Lastly, determine the data collection methods and collect the data.
The stage involves analyzing all the information and data collected, and individuals closest to the selected processes should be actively engaged in this phase. The project team should determine the current performance gap between the organization and the benchmarked company and also identify the causes of the significant gap. The team then projects the company’s future performance.
Integration involves communicating the benchmark findings and seeking support throughout the organization to gain acceptance. The support of the managers is crucial because they will provide the resources for accomplishing the goals. The team must ensure that they secure total approval and commitment to avert implementation impediments. Then, the project team establishes new functional goals after acceptance of the proposed performance improvement of the processes.
The action phase involves developing an action plan for implementation which includes timelines and task delegations. Then, the project team implements the specific activities and monitors the progress and must be committed enough to ensure proper coordination and monitoring of the action plan. The process should be kept continuous.
The maturity phase ensures that the leadership position is achieved and that the management fully integrate best practices into the organizational processes.
Process Benchmarking Versus Product Benchmarking
Process benchmarking differs significantly from product benchmarking. The goal of product benchmarking is to compare a company’s product with the best in the industry. For example, a company can determine what features are in all the products available and which ones are only in some products. Also, an attribute of a product that gives it a competitive edge over the other products in the market. On the other hand, process benchmarking aims at improving different phases of production and increasing efficiency. For example, a company can determine how its competitors minimize the cost of production as well as increases its effectiveness through its systems. While process benchmarking targets organizational processes such as planning, leadership, and management, product benchmarking targets the products or services offered by the company such as smartphones. Product benchmarking can help an organization to identify weakcompeting points in its product then focus on critical processes to eliminatethese drawbacks. For instance, a product whose taste is a competing weaknesscan be improved through process benchmarks on ways of achieving superiorproduct taste during the production process.
Benchmarking is a valuable strategic tool that can help companies to improve efficiency and effectiveness of their processes as well as increase overall performance. In quality management, it can be used to emphasize and ensure continuous improvement of processes, products, and services. Xerox benchmark project is an excellent example of how benchmarking can benefit organizations. The process involves five phases which are planning, analysis, integration, action, and maturity.Process and product benchmarking differ significantly especially regarding their purpose. The goal of product benchmarking is to compare a company’s product with the best in the industry while process benchmarking aims at improving different phases of production and increasing efficiency.
Sajjad, F., & Amjad, S. (2012). Role of Benchmarking in Total Quality Management: Case of Telecom Services Sector of Pakistan. Business Management Dynamics, 1(8), 34-44.
Bhutta, K. S., & Huq, F. (2009). Benchmarking–Best Practices: An Integrated Approach. Benchmarking: An International Journal, 6(3), 254-268.
Prabhakar, S. (2017). Benchmarking-A Process of Continuous Improvement to Achieve Best in Class Performance. International Journalof Engineering and Management Research, 7(6), 197-202.