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

Re: How to benchmark (seek advice)?

Tim Folkerts said:

I agree that playing follow-the-leader will never make you cutting edge, but follow-the-leader is still better than standing still! Ideally you do both -- beg, borrow are steal the best from others and innovate your own further improvemnts. Perhaps benchmarking can be thought of as looking for the "low hanging fruit" -- a good start but not the ultimate goal.

Tim F

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If benchmarking is an effort to discover what should be obvious (the low-hanging fruit), you're doomed. Of course, I know what Newton said about seeing further because he was standing on the shoulders of giants, but in my experience, the practice of benchmarking is almost always the result of poor leadership, and the misbegotten belief that one can rely on the innovations of others for improvement. If you want "best practices," get the best people.

Re: How to benchmark (seek advice)?

Jim Wynne said:

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.

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While any company can, and should, look at internal processes to identify possible improvement areas, if one never looks to others in their field for comparison, they are ignoring a significant factor. I do not agree that it is always simply a matter of "...it's because of people, and management that allows people to find better ideas and implement them..."

For companies that don't compare themselves against competitors, I predict they will eventually be over come by their competitors.

I personally never was in a company that wasn't benchmarking something either internally or externally.

In fact, I don't think I know anyone that doesn't technically benchmark daily in their personal lives in that they want something and they compare the different products available to meet their needs (perceived or real). I'm thinking of a HDTV this year. I will go out and benchmark the different models for features and such.

Benchmarking is only one tool in the arsenal. For some reason some folks in this thread see it as a useless resource. I disagree.

Jim Wynne said:

If benchmarking is an effort to discover what should be obvious (the low-hanging fruit), you're doomed.

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If all one looks for, whether internally or externally, is 'low hanging fruit', then they're doomed anyway. I don't at all view benchmarking as limited to 'low hanging fruit'.

Re: How to benchmark (seek advice)?

Jim Wynne said:

If benchmarking is an effort to discover what should be obvious (the low-hanging fruit), you're doomed. Of course, I know what Newton said about seeing further because he was standing on the shoulders of giants, but in my experience, the practice of benchmarking is almost always the result of poor leadership, and the misbegotten belief that one can rely on the innovations of others for improvement. If you want "best practices," get the best people.

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True, but if your competition spent $10,000,000 innovating and you can spend $10,000 imitating, perhaps your management isn't so stupid afterall.

Even if you are months later to the market (or years later in the generic drug trade), you can undercut your competition due to lower R&D costs. There are entire industries built on watching the big boys and copying their best processes and products!


Tim

Is Benchmarking Valuable? Poll added

Added a Poll for the heck of it...

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

My organization has three levels within our benchmarking process.

• Best Past Level - Internal within the site. This shows that we did, once upon a time, have a great month and our first step is to re-visit that level consistently (i.e., stabilize to that point).
• Group - Within our locations around the world. Same reasons as above. Even nicer when our site is the group benchmark.
• International - Competition or companies in similiar industry. Same reasons. Awesome feeling when our site is the international benchmark...or so we think...haven't quite achieved that level...yet (close...oh so close in some areas).

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

Benchmarking is useful for several reasons.

It helps companies stay on top of what is happening outside their company. Not using benchmark data allowed the Big 3 to be fat, dumb and happy far too long, and they got behind the curve.

It helps individual managers avoid getting complacent.

I can run a 10 minute mile, which seems pretty good to me, when I compare myself to myself. But, when I see benchmarks, I realize it is not so good after all.

It is why sports records are tracked so carefully.

If company A can do something in 30 seconds, and company B can do it in 10 seconds, it tells company A they are overlooking something. The same can be applied internally. Operator A is 2 times as productive as operator B - there is something going on there that can be analyzed.

And, lastly, sometimes we think we have hired the best, until we see what "best" really is. Then we have to improve. It drives improvement.

How can we justify thinking there is no value in benchmarking?

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

I'd have to agree that benchmarking is useful, valid, and a practical way of ensuring your company stays competitive in it's field. It is NOT a tool for developing a system which mimics your competitors...if you believe it is, then you're likely applying it wrong. The idea is to stay competitive by ensuring that your organization compares/exceeds your competition in it's market. Ignoring others' success is a good way to injure your business and stunt your capability to learn, ignoring others' mistakes produces the same effect.

Benchmarking can give you incite into where you could focus your quality/business objectives. It's all part of competition, and competition is always a great contributor to improvement.

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

I've always been taught that benchmarking is used not to keep up with the competition, but to leap ahead of them. So how do you do that while looking to my competition for direction?

True advances with benchmarking come from outside the proverbial box. Companies to be benchmarked do not necessarily have to be in your market, in-fact if we really intend to seek the "best in class" they more than likely will not be in our market. Identify your weakest process, indentify the best in class company for that process (this can be in any market, any product, any field), then (and here's the trick) don't just implement their practices into your process, but look for ways of improving upon their practices first.

As an example: Wal-mart is known for their ability to turn stock (warehousing and resupply) - no matter what market or product we are selling, if resupply is a weak process for us, then we need to be benchmarking Wal-mart for this process.

Always seek out the best in class process, no matter who owns it.

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

Benjamin28 said:

I'd have to agree that benchmarking is useful, valid, and a practical way of ensuring your company stays competitive in it's field. It is NOT a tool for developing a system which mimics your competitors...if you believe it is, then you're likely applying it wrong. The idea is to stay competitive by ensuring that your organization compares/exceeds your competition in it's market. Ignoring others' success is a good way to injure your business and stunt your capability to learn, ignoring others' mistakes produces the same effect.

Benchmarking can give you incite into where you could focus your quality/business objectives. It's all part of competition, and competition is always a great contributor to improvement.

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Benchmarking, as it's commonly understood, is the process of seeking out "best practices" in various processes. What you're referring to (keeping an eye on one's competition) isn't "benchmarking" as I believe most people understand the term these days. It's essential to know what your competition is doing, but as I said earlier in this thread, looking to other companies for good ideas is an admission that your people don't have any.

Re: How to benchmark (seek advice)? Is Benchmarking of any value?

Jim Wynne said:

... but as I said earlier in this thread, looking to other companies for good ideas is an admission that your people don't have any.

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I think it was Truman who said, "Use all the brains you have, plus all the brains you can beg, borrow or steal."

I beg, borrow...(not sure I get to steal)...continually and synthesize it to other companies. I doubt most of our ideas are purely generations of our our minds. It is the application that counts. I don't consider that an admission of anything negative.

After all, this Elsmar forum was established to allow us to look to other companies for good ideas.

Also, I think benchmarking can be looking at "best practices," but it can also be a look at comparative practices. I don't try to be restrictive when using the term. I look to whatever will get the job done for the client I am working for.