How do you choose the best benchmarking method for your business process improvement goals?

By judging a company's processes or products by comparing them to the world's best/ international standards, including those in other industries.

🤔 Internal Benchmarking Let’s think about this in the context of a call center with 400 employees answering calls. Some employees will have better performance overall than others. Some will excel for certain metrics. Rank them based on their performance from a few perspectives then zone in on one metric. If you want to lower the average call time, look at the person who consistently has the shortest call times. Determine if that person discovered a best practice than can be shared and standardized across your call center. As you aim to be more competitive, <the best person you can compete with is yourself.> Matt Rebeiro - Challenge the Status Quo #BusinessProcessImprovement #ProjectManagement #CallCenter #benchmarking

Choosing the best benchmarking method for your business process improvement goals involves considering several factors. Here are some steps to help you make an informed decision: 1. Define Your Improvement Goals: 2. Identify Potential Benchmarking Methods: 3. Evaluate Method Suitability: 4. Consider Data Availability: 5. Assess Cost and Complexity: 6. Evaluate Risks and Benefits: 7. Prioritize and Select a Method: 8. Plan and Execute Benchmarking: 9. Implement Improvements:

Selecting the best benchmarking method for business process improvement involves considering your specific goals, industry standards, and the type of processes being evaluated. Common methods include internal, competitive, and functional benchmarking. Assess which aligns best with your objectives and organizational context.

Internal benchmarking involves comparing different departments or teams within your own company. This helps identify best practices and set realistic improvement goals based on what’s already working well internally. In one project, we compared the efficiency of two regional offices. By adopting the successful practices of the more efficient office, we were able to enhance overall performance across both regions. Using internal benchmarking can be a great starting point since it allows you to leverage your own strengths before looking externally for improvements.

Nice one Rozil .. it also depends on what is desired to be achieved / raise the bar towards, product and/or process enhancement, solely internally or in conjunction with other parties. In addition, raising the bar can also lead to a combination these types of benchmarks to enhance the production performance, implemented new technology/product. One fundamental benefit delivered by each approach is the self-assessment enabling a better understanding of the current situation and what needs to be done to achieve the desired results under each type of benchmark approach (type of gap-analysis) with afterwards the repeat of the self-assessment to evaluate to which extend the desired results have been achieved / new opportunities for improvement.

Simplest and most accessible: Compares processes within your organization (departments, teams, locations). Benefits: Identify best practices within your company and spread them. Track progress over time and set achievable targets. Limitations: Limited perspective on best practices compared to external options. May not spark significant innovation if looking inward only.

Internal benchmarking = Benchmark within department or within the plant. Example: student benchmarking topper of class / other departments benchmarking top department. Identify the Topper: Know who the best student is. 1.Observe: Watch what the topper does, like their study habits and daily routine. 2.Learn: Ask the topper about their strategies for taking notes, studying, and preparing for exams. 3.Adapt: Try to incorporate these methods into your own routine. 4.Track Progress: Keep an eye on your grades to see if these changes help you improve. 5.Refine: Keep tweaking your methods to find what works best for you. By doing this, the student can learn from the best and apply it to their own efforts to become the class topper.

At Global Logistics, the operations team aimed to enhance warehouse efficiency. James, the operations manager, chose internal benchmarking. He analyzed performance data from different warehouses within the company. By comparing metrics such as inventory turnover and picking accuracy, James identified the highest-performing warehouse. He then facilitated knowledge-sharing sessions where teams exchanged best practices. Implementing these insights across all warehouses led to reduced operational costs and faster order fulfillment, demonstrating the effectiveness of internal benchmarking in driving process improvements tailored to organizational strengths.

Compares your processes to direct competitors. Benefits: Understand how you stack up against competitors in key areas (cost, efficiency, quality). Identify areas where competitors excel and learn from them. Limitations: Competitor data can be difficult or expensive to obtain. May not be relevant if your business model differs significantly.

Competitive benchmarking involves comparing your business processes to those of competitors to identify areas for improvement. This method helps you understand where you stand in the market and what successful companies are doing differently. In one project, we used competitive benchmarking to analyze a competitor’s customer service process. By studying their response times and customer satisfaction scores, we identified gaps in our own processes and made targeted improvements. This approach helps you learn from industry leaders and align your processes with best-in-class standards, giving you a competitive edge.

𝗙𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝗮𝗹 𝗯𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸𝗶𝗻𝗴 𝗮𝗹𝗹𝗼𝘄𝘀 𝘆𝗼𝘂 𝘁𝗼 𝗰𝗼𝗺𝗽𝗮𝗿𝗲 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝘀 𝘄𝗶𝘁𝗵𝗶𝗻 𝗼𝗻𝗲 𝗼𝗿𝗴𝗮𝗻𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝘀 𝘄𝗶𝘁𝗵𝗶𝗻 𝗮𝗻𝗼𝘁𝗵𝗲𝗿. This may help you understand how your team's specialized strategies compare to those other companies use and allow you to stay updated about trends. For example, if you are working in the logistics department of an automobile spare parts manufacturing company , you may compare the packaging and material handling process with similar industries of that nature. By this comparison, we can able to discover new ideas and best practices to implement and improve our process.

Choosing the Best Benchmarking Method for Business Process Improvement Goals 1. Define Benchmarking Objectives: 2. Identify Benchmarking Partners: 3. Select Benchmarking Method: • Internal Benchmarking: • Competitive Benchmarking: • Functional Benchmarking: • Process Benchmarking: 4. Collect Data: 5. Analyze Results: 6. Develop Improvement Plans: 7. Monitor and Evaluate: By carefully considering these factors and following a structured approach, you can choose the best benchmarking method to support your business process improvement goals.

Compares your processes to non-competitive organizations known for excellence in specific areas. Benefits: Gain insights from best-in-class practices, even outside your industry. Learn innovative approaches that may not be common in your field. Limitations: Adapting practices from a different industry may require significant modifications. Finding suitable benchmark partners can be challenging.

Functional Benchmarking: Benchmark your functional process with different industry of same department. Ex: Automobile industry benchmarked supermarket kitting system. Toyota kitting system inspired by how supermarkets stock shelves and manage inventory, ensuring products are available when customers need them. 1.Supermarket Storage: Parts are stored in a central area called a ‘supermarket’. 2.Kit Preparation: Workers gather all the parts needed for a specific car model into a ‘kit’. 3.Line Feeding: The kit is then delivered to the assembly line where the car is being built. 4.Just-In-Time: Parts arrive just as they are needed, reducing inventory and waste. Ultimately this technique improved Toyota efficiency and reduced costs.

At TechPulse, the IT department aimed to streamline their software development process. Emma, the project manager, opted for functional benchmarking. She identified leading tech companies renowned for efficient development cycles. Emma and her team visited these companies to observe their methodologies firsthand. They benchmarked everything from coding practices to project management tools. Back at TechPulse, they implemented similar agile frameworks and collaborative tools tailored to their team’s dynamics. The result? Faster delivery times and improved product quality, showcasing the power of functional benchmarking in achieving targeted process improvements.

Functional benchmarking compares your business processes to those of companies in different industries but with similar functions. This helps you learn from organizations excelling in specific areas, even if they aren’t direct competitors. In my experience, we used functional benchmarking to improve our internal communication systems by studying how top tech companies handle collaboration. By adopting their best practices, we enhanced our team's efficiency and communication flow. This method allows you to gain insights from leaders in different fields, providing innovative solutions that you can apply to your own processes.

Collaboration Between 2 Or more companies work together for better outcome. Ex: Ford and Toyota: 1.Objective: To develop new hybrid systems for light trucks and SUVs. 2.Collaborative Effort: The two companies shared their expertise in hybrid technology and vehicle production. 3.Outcome: a.The collaboration led to advancements in hybrid technologies that benefited both companies. b.They were able to develop more fuel-efficient vehicles while sharing the costs and risks associated with research and development. Collaborative benchmarking can lead to significant benefits, including shared knowledge, reduced costs, and improved products for the automotive industry.

At BrightSolutions, the team needed to improve their customer support process. Maria, the project lead, researched various benchmarking methods. She decided on competitive benchmarking, as it allowed them to compare their performance with industry leaders. Maria gathered a team and identified top-performing companies in customer support. They studied their strategies, from response times to customer feedback systems. After analyzing the data, they adapted the best practices to fit BrightSolutions' unique needs. Implementing these changes, the team saw a significant boost in customer satisfaction and efficiency, proving the value of choosing the right benchmarking method.

Collaborative benchmarking involves partnering with other organizations to share best practices and insights. This method fosters learning and improvement through open communication and shared experiences. In a previous project, we engaged with a network of similar businesses to discuss our supply chain processes. By collaborating, we learned valuable strategies that helped us streamline our operations and reduce costs. This approach not only enhances learning but also builds relationships with peers. It creates a supportive environment where organizations can grow together by sharing successes and challenges.