How to Benchmark? Is Benchmarking of any value? Seeking advice

[darkafar]

Assumptions:
1. Every manufacturing factory has to have several major customers to survive. These customers are the market.

2. The customers have their own supply evaluation system, they do the evaluation of their supply performance on a monthly or quarterly basis, and they have the rating data of their suppliers.

So the benchmarking is simply getting the customers’ rating data and using them.

Benchmarking steps:
1. Select a well educated employee from the organization as contact window to do the benchmarking.
2. This person negotiates an agreement with the major customers to get access to the customers’ supply rating data.
Note: the organization doesn’t have to know the customers’ supplier name, so the customer can use letters to represent suppliers.
3. The organization can then use the data to decide its position in market (the customer’s rating), adjust its KPIs, do gap analysis, and take suitable measures to close the gaps.

I see no reason why the customers would not cooperate, so it is operable.

My first question is: is this benchmarking? Second question: how do you think of this?

[Yew Jin]

Steps for benchmark

1. Planning - What to be benchmarked, Who will be compared and How the data will be collected

2. Analysis - Determine the current gap analysis, work out on the future performance

3. Integration - Communicate the benchmark finding and gain acceptance, work out the goals

4. Action - establish the action plans, implement the action and close monitor, recalibrate the benchmark if neccesary

5. Maturity - fully integrated into the process and leadership attained

[vanputten]

I would ask the question, "Why?"

Why do you want to benchmark? What is the benefit?

Can an organization (business system) assume that what works in a different business system will work in its system? If another organization performs in a certian way, design and develops their system in a certian way, then that structure will work in the system of the organiztion doing the benchmarking?

Never assume what works in one system will work in another. Design and develop for your organization's system. Do not cut and paste without rigorous review. And concentrate on expanding the market and not on gaining a certian percentage of the existing market.

Regards,

Dirk

[AndyN]

My experience of benchmarking is that you look at organizations who are the best in their market with excellent performance around some KPI you're interested in improving.

It helps that they use a similar technology to your organization. For example there's a powertrain company who bench marked a die-cast toy manufacturer on their design and development process - they bring toys to market in 11 months, cast products which are assembled before delivery.

Dirk has it though, why?

Andy

[darkafar]

I am more interested in the KPI performance of my direct competitors. The means through which I get the information is from the direct customers that we share.

By doing so I can know what need to be done to make our direct customers happy, to get more orders.

[Jim Wynne]

Originally Posted by vanputten

I would ask the question, "Why?"

Why do you want to benchmark? What is the benefit?

Can an organization (business system) assume that what works in a different business system will work in its system? If another organization performs in a certian way, design and develops their system in a certian way, then that structure will work in the system of the organiztion doing the benchmarking?

Never assume what works in one system will work in another. Design and develop for your organization's system. Do not cut and paste without rigorous review. And concentrate on expanding the market and not on gaining a certian percentage of the existing market.

Regards,

Dirk

I like this answer. I don't like benchmarking, which is the practice of formally admitting that your competitors have smarter people than you do.

[Marc]

I've always thought of benchmarking as comparing to a similar industry / process. So, if I'm a metal stamper and I find that my die change takes 45 minutes, and I find that a competitor which does very similar work and has similar equipment does die changes in 20 minutes, I may be able to look at my die change process and see what I can do to reduce my die change time.

Granted there are differences between companies and processes, not to mention specific manufacturing equipment, but there are aspects which can, and should, be benchmarked if only to see 'where you stand with respecct to one or more competitors'.

[Jim Wynne]

Originally Posted by Marc

I've always thought of benchmarking as comparing to a similar industry / process. So, if I'm a metal stamper and I find that my die change takes 45 minutes, and I find that a competitor which does very similar work and has similar equipment does die changes in 20 minutes, I may be able to look at my die change process and see what I can do to reduce my die change time.

Granted there are differences between companies and processes, not to mention specific manufacturing equipment, but there are aspects which can, and should, be benchmarked if only to see 'where you stand with respecct to one or more competitors'.

Sorry, Marc, but I disagree. Anyone can, at any time, look at their own processes and find possibilities for improvement. If I can benefit from faster tooling changes, I don't need to know how fast my competitor does it. If you take two companies that are equal in technology and their general processes, and one is more successful than the other, it's because of people, and management that allows people to find better ideas and implement them. If you don't have that, you'll play follow-the-leader forever, and benchmarking becomes a perpetual requirement.