Benchmarking: examples of the best companies to grow your business. Benchmarking: examples Benchmarking on the example of a Russian company

About what prevents the purchasing department from becoming a full-fledged tool for increasing the company's profits.

Each of the factors mentioned in the previous article reduces the efficiency of the purchasing department. If you find similarities in several positions in relation to your company at once, the situation can be considered critical.

The question arises →

What should the head of the company and CFO do in such a situation?

Practice shows that it is possible to get out of the crisis only through thoughtful step-by-step transformations.

So, let's begin.

Step one. Evaluating the effectiveness of the purchasing department

Conduct an audit and create an objective picture of what is happening in Procurement:

• study the current document flow;
• highlight the TOP-20 categories and the amount of costs for them;
• designate the persons responsible for the procurement of these categories;
• specify the number and functionality of employees involved in the procurement process;
• evaluate the level of expertise in procurement by category.

Step two. Focus of procurement on strategic issues

Free Procurement from non-core work by focusing employees on strategic issues:

1. Sourcing:

• market analysis;
• preparation terms of reference;
• holding a tender / negotiation;
• preparation and implementation of the contract.

2. Supplier Relationship Management:

• evaluating the performance of suppliers by interviewing internal customers and analyzing the market;
• establishing feedback;
• recommendations to suppliers on how to make their service more efficient;
• implementation of innovations.

• the procurement and consumption process;
• commercial terms;
• specifications.

2) Creation of a long-term categorical strategy and new procurement schemes. For example, switching to operating leasing or car rental instead of buying a vehicle.

Ensure full procurement coverage of strategic cost categories

Strategic categories- categories that critically affect your business. Such categories (packaging, raw materials, transport, goods and services for marketing), as a rule, account for the majority of budgetary expenditures.

Spot(one-time purchases with a small cost - buying 10 laptops, finding an office for rent, buying office furniture, etc.) and operational procurement(processing applications for office supplies, expendable materials for stores, placing and tracking orders with suppliers) into a separate operational function. To do this, create service center in a region with low labor costs, or outsource operational functions.

Leaving these processes to the initiators is likely to nullify the savings achieved through sourcing.

The reasons for such losses:

Move the table

Step three. Strong expertise

Focus procurement expertise on strategic cost categories.

Important:

• hire specialized specialists for each specific categories;
• fire the "tired" - those who cannot be motivated;
• train employees (trainings, reference visits, etc.);
• accumulate knowledge gained from suppliers and companies from the same industry.

Step four. Clear goals

Set a clear goal for Purchasing: to optimize costs for specific purchasing categories. Achievement economic indicators entrust to Finance. And to make effective use of the savings from sourcing activities, adjust your budget on a quarterly basis.

Important:

Finance does not take into account the estimated, but actually obtained savings

Step five. Sourcing event plan

Agree with the purchasing department a plan for sourcing events for a year, or better for the next two years. This will allow you to assess the scale of the savings and use the necessary labor resources.

Step six. Signing and tracking SLAs (Service Level Agreements)

Be sure to develop and sign an SLA between Procurement and other company divisions.

Measure the efficiency of your purchasing department quarterly.

Feedback can be obtained through surveys to help clarify →

• Are the initiators satisfied with the service providers?
• How satisfied are the department heads with the purchasing department service?
• What are the pros and cons of running a procurement service?

We use the surveymonkey.com resource in our work.

Regularly discuss emerging problems between the initiators and the Procurement, monitor the implementation of the planned activities. This will shorten the time for negotiating tender decisions and procurement, as well as help to achieve savings in accordance with the sourcing plan.

Step seven. Taking purchases out of your comfort zone

Take your purchases out of your comfort zone!

Try to find new opportunities to reduce costs.

One such opportunity is the creation of procurement consortia with other companies. Unfortunately, today many companies do not consolidate purchases even within their own organization / group of companies or even one division, which affects their results.

With the support of management, procurement specialists can consolidate all volumes of the group of companies and conduct a sourcing event at a higher level

Suppliers will meet halfway: they are interested in signing a contract for a larger volume within the framework of one event.

Step eight. Use benchmarking

Conduct benchmarking - comparing the current conditions of the company with the conditions of other market participants. For example, in the case of mobile communications, you need to compare the costs per user per month.

Benchmarking helps to stimulate Purchasing and allows you to assess the potential for cost savings. In addition, it provides guidance when negotiating with suppliers: what level of cost should you strive for.

Step nine. Involve Purchasing in the coverage of all inquiries

Require Procurement to cover all procurement categories - direct and indirect.

Participation of Procurement in the process of making strategic decisions increases their efficiency and competitive advantages, and allows initiators to formulate requests more correctly and clearly

The purchasing department is involved from the very beginning in the company's projects, where high costs are planned.

Step ten. Oversight by the finance function

Finance Tasks:

• involve Purchasing in the budgeting process;
• set aggressive budget savings targets for Procurement;
• monitor the achievement of these goals;
• participate in a procurement audit.

Finances should set the goal of saving and for the initiators. This forces initiators to cooperate with Procurement when selecting suppliers, even in those categories in which Procurement has not previously participated.

Step eleven. The head of the company is the main stakeholder

You understand like no one else that the results of the procurement service directly affect the company's achievements. Therefore, it is in your best interest to become the main stakeholder, sponsor of the procurement function.

The CEO must regularly (quarterly):

• evaluate the results of the Procurement activities together with other functional managers;
• receive a reliable report on the achievements / problems in the field of procurement;
• receive a report on the results of Procurement in comparison with similar companies.

Important:

procurement concerns the activities of the entire company and all functional leaders, therefore control and interest from the CEO is necessary. For this reason, in international companies the head of the Supply function often reports directly to the CEO

Let's summarize

If you want to get the most out of the purchasing department, create a competitive environment in which Purchasing competes within your team, with other services within the company and with the purchasing services of other organizations. Otherwise, the Procurement activity will remain chaotic and will not bring tangible results.

In international companies, the CEO and CFO are involved in strategic procurement management issues. This is explained by the fact that purchases increase the company's profit along with sales.

In Russia, purchases have long been on the sidelines, as the last 15 years have seen an increase in consumption and sales. Procurement inefficiencies were not taken into account by management in the pursuit of excess profits and due to lack of competition.

Procurement becomes competitive if the company's management is interested in this, puts in front of Procurement strategic goals and monitors their implementation

It's time to change focus. You can surely change a lot and usefully in the procurement function in your company! If you need practical advice, .

Reading time: 15 minutes

In our country, there is an active development of business, the development of new management tools. This allows you to improve the quality of business processes, make them more perfect, and enterprises - more competitive. One of these tools is benchmarking.

In this article, you will learn:

1. Types of benchmarking
2. The principles by which it is carried out
3. 4 stages of
4. Examples of benchmarking from world practice
5. How benchmarking is used in Russia

What is company benchmarking and what it is used for

Benchmarking

an ongoing process of assessing the level of goods, services and working methods, based on comparison with the strongest competitors or leading companies.

Through the use of benchmarking, the business becomes more efficient and open. This tool allows you to find answers to questions that arise during the course of entrepreneurial activity, and has the following Benefits:

1. Its application makes it possible to overcome stagnation in leadership, allows you to indicate to leaders that they have a wrong view of the state of affairs.
2. Benchmarking motivates self-righteous and complacent businessmen to strive for the best.
3. It helps to identify how strengths organizations and weak ones that need to be strengthened.
4. Its holding is an opportunity to warn the company in advance about the lag.
5. Benchmarking sets challenging but achievable goals.
6. Helps determine which actions to improve performance are prioritized.
7. Allows you to identify and include the best processes and management practices used in business.
8. Reveals what the level of the company is in comparison with the best in the world.
9. Determines how much the level of the firm's functioning lags behind the level of competing organizations.
10. Provides the organization with plans for proven corrective action.
11. Allows you to combine the strategy and efforts of the enterprise to improve it.
12. Discovers new technologies and methods of company management.
13. Focuses on the main factors of the company's success.
14. Allows you to conduct large-scale events aimed at improving performance.
15. Helps to learn from the experience of partners and competitors. No company has the time and resources to learn from its mistakes.
16. Forms a culture of continuous improvement.
17. Allows to reduce the cost of ongoing improvements.
18. Allows you to implement approaches more quickly and with less risk.
19. Contributes to the improvement of key financial indicators.

Depending on the field of application, benchmarking is classified into:

• Benchmarking the level of customer service.
• Information technology benchmarking.
• Benchmarking of product characteristics.
• Benchmarking product quality.
• Benchmarking employee development and training.
• Benchmarking business process management.
• Telephone customer service benchmarking.
• Benchmarking performance evaluation.
• Benchmarking production.
• Benchmarking costs.
• Image benchmarking.
• Benchmarking personnel management and recruiting, etc.

The history of the emergence of benchmarking

Benchmarking began to be systematically applied in practice in the 1980s. The pioneer company in the use of this tool is Xerox.

She faced a foreign organization that competes with her and has a higher performance on most indicators. Xerox management decided to find out what the secret of the competitor's advantage was, in order to reach its level or even outstrip it. The task was divided into several components, which made it possible to answer the questions:

1. Which company has the best products, services and business processes?
2. What allowed this company to achieve such results?

After Xerox, other organizations began to use benchmarking, the scope of its application was expanded, and the methodology was refined. The range of problems studied has become much wider, that is, the search for best methods of doing business has begun to be carried out not only in competing companies, but also in other organizations both in their own industry and in related ones.

Recently, the search for answers to the second of the designated benchmarking questions has been undergoing improvement. But observing and describing the way organizations operate as leaders is not enough. Separately, a rather difficult component of the task is the implementation of these methods in your enterprise.

Management trends in the 1980s were not spared by benchmarking either. This period was marked by the development of the concept of Total Quality Management (TQM). The popularity of this concept was very high over the next 10 years.

Benchmarking is based on principles that are fully consistent with the concept of Total Quality Management. According to some experts, benchmarking is a tool without which it is impossible to implement TQM.

Be that as it may, the basis and concept of integrated quality management and benchmarking is the pursuit of high quality of the company's business processes, products manufactured by it, and services provided.

TQM and benchmarking are components of a corporate culture of continuous improvement, staff involvement in the organization's business processes and customer orientation.

Submit your application

Why is benchmarking so popular today? Jason Grason Jr., head of the International Benchmarking Clearinghouse, cites the following reasons:

1. Global competition

Currently, business is globalizing, and companies understand that it is imperative to comprehensively and thoroughly study and then implement the best achievements of partners and competitors if they want to survive.

1. Reward for quality

Recently, more and more campaigns have been carried out at the state level, during which the enterprises that are leading in terms of quality are identified and awarded. To take part in such a program, the company must not only prepare a presentation of the competitive advantages of the manufactured goods. In the arsenal of tools for managing an organization, benchmarking must be present.

1. The need for widespread adaptation and use of world achievements in the field of production and business technologies

Any organization, regardless of size and field of activity, needs constant study and implementation of best practices in the field production processes and business technology. This will allow you to keep up with your competitors.

Types of company benchmarking

You need to know how process benchmarking differs from results benchmarking. Benchmarking results simply by comparing metrics. In reality, benchmarking is meant to infiltrate the processes behind results; establish why performance indicators differ; borrow ideas that have been successfully implemented in practice.

It is not easy to categorize benchmarking activities because many companies that practice benchmarking ignore the recommended templates.

Internal benchmarking

It is used to compare different indicators of one organization. For example, a retail chain retail outlets can compare the attendance of their stores. The approach has a number of advantages: data is not difficult to obtain, and there are no problems with access to information. But there are also disadvantages: internal benchmarking does not provide for the search, study and implementation of the best achievements of competitors.

Competitive benchmarking

This tool assumes comparison of results and business processes in different organizations. Conducting competitive benchmarking is not a problem for companies, which can obtain information about the activities of competing organizations from the reports and reviews they publish, which are in the public domain. If access to such information is closed, then benchmarking is possible only if competitors are willing to share information.

Competitive benchmarking is practiced in the entertainment industry. Organizations in this sector provide each other with safety data, because if an accident occurs on an attraction in one park, this will serve as anti-advertising for everyone else.

Functional benchmarking

It is based on the comparison of results and processes in one business function carried out in different sectors of the economy. The ability to compare is due to the nature of the processes, and not the spheres with which the activities of the organizations of interest are associated.

An example of such benchmarking is a comparison of administrative functions (for example, working with personnel). It is less problematic to compare a certain function of your enterprise with a similar function in companies in other industries, since in this case there is no competition, and the exchange of information is more likely.

Functional benchmarking allows you to be innovative in problem solving by exploring solutions in other industries.

General benchmarking

It involves the study of innovative solutions developed in other companies, which is not associated with a specific function or sector.

For example, in Britain, the postal service has taken a chemical company as its safety model. The operating conditions of the health and safety services of these organizations differ significantly, but the study of certain processes has helped the postal service learn a lot.

Principles by which a company is benchmarked

# 1. Reciprocity

Benchmarking involves the need to interact, reach an agreement, exchange data in order to benefit each of its participants. But reciprocity cannot be achieved by acting blindly. First, you need to outline the boundaries of the range of information, agree on the procedure for the exchange of information, the logic of the study.

Each partner must be sure that the behavior of other benchmarking participants does not go beyond the agreed framework. If the rules are followed by everyone, the result of the research will be brilliant. All conditions must be agreed in advance.

# 2. Analogy

The similarity of the operational processes of the participating companies is necessary. Any process can be assessed, the main thing is that its results can be applied by researchers in the context of their organization. The success of benchmarking is guaranteed if there is an analogy of processes and the selection of partners in accordance with certain criteria.

No. 3. Measurement

Benchmarking compares the parameters defined for several organizations in order to find out why they are different and how to achieve the best values. It is most important to determine the main parameters of the process, then it becomes possible to improve them after the process is studied.

No. 4. Credibility

Benchmarking should be based on evidence, accurate analysis and process learning, not just intuition.

Company benchmarking: 4 stages of conducting

Stage 1. Preparation

1. First, you need to select a competitive benchmarking object. It is necessary to study how important and relevant the selected object is, with the help of which the tasks and basic functions of the enterprise are performed. In this process, the most difficult stages are identified, they are looking for narrow places and the most interesting areas.
2. In the second stage, thresholds are established to determine the assessment of success. Subsequently, when considering the selected objects, some of the most significant aspects of the activity with the help of financial units will be taken into account. These aspects can be: cost, time, quality level, etc.
3. To make the analysis results more accurate and capacious, you need to use additional sources information such as: fairs, seminars, reports, business plans, target audience surveys, supplier surveys, exchange processes, facility inspections, background information, chambers of commerce, media, literature.
4. At this stage, you need to look for organizations for comparative analysis. The search should be carried out not only in your market sector. By researching businesses in other industries, you can learn about the most decisive and innovative ways of working that will work for you. And if you are not a competitor for the selected company, then the likelihood that it will provide you with the data you need for analysis and comparison is higher.

Stage 2. Analysis

1. Determination of the processes, services, goods and technologies with the least efficiency and identification of the reasons why they are ineffective, based on the values ​​and factors of the enterprise selected at the previous stage.
2. Selection of areas that will improve the efficiency of business processes and technologies. Here you will need to find out what is the reason for the advantages of companies competing with you.

Stage 3. Implementation

This stage involves defining the goals of the planned changes and developing a strategy for their implementation.

1. The expected results are discussed in detail. At the same time, it is necessary to realize the need for changes and the establishment of specific goals of the enterprise, taking into account the requirements of new standards and the forms of activity being introduced.
2. Compiled detailed plan actions, the costs of reorganization are calculated, the employees responsible for the implementation of innovations are determined, a schedule of changes is developed and a forecast of the results of planned improvements is made.
3. All developed changes are implemented in practice in accordance with the developed plan and schedule.

During the implementation of the project, you need to control all the transformations so that you can assess how effective the innovations are. In addition, it should be checked whether the work is being carried out strictly according to the plan and whether the deadlines are being met.

Stage 4. Repetition

The development of market methods and processes with high efficiency is very intensive, they are constantly changing and from the status of innovative, they quickly pass into the category of standard ones. In this regard, at the fourth stage, it is recommended to connect the constant process of improving the activities of the enterprise. It is possible to simplify work in this direction by documenting in detail the experience of benchmarking studies.

Companies that conducted benchmarking: examples from world practice

Competitive benchmarking at Ford

The design parameters and functional properties of Ford Corporation's products were significantly inferior to those produced by competitors, until it began to practice the reference comparison. The return of the lost market share was possible only if a new, advanced family of passenger cars was created. The bet was made on Taurus.

In order for the developed model to be better than that of competitors, it was necessary to conduct benchmarking. First of all, we identified the most attractive properties of the machines on the market for customers. After, for each of these properties, the best cars in the studied class were determined. Taurus had to reach and surpass their level.

The scope of the study was wide. We studied cars of all world manufacturers. Although they did not directly compete with the Ford Taurus, they were attractive to consumers due to their certain properties. More than 50 models for 400 design parameters were analyzed.

The company laid the foundations for implementing the principles of developing new vehicles using the DMADV cycle (Define - Measure - Analyze - Develop - Verify).

As a result, the Ford car was recognized as the car of the year and came out on top in terms of the number of sales.

Later, design flaws were revealed in the Taurus transmission, the reputation of the car was badly damaged. The model was modified several times, and more and more deviating from the original concept. In the late 1990s. Taurus sales fell from 400 to 60 thousand. The last batch of this model was released in August 2006. The Taurus story showed Ford Corporation that competitive benchmarking needs to be done more than once.

Functional Benchmarking at General Motors

General Motors from 1982 to 1984 a benchmarking study was conducted to find alternative methods of quality and safety management. In those years, many managers accepted W. Edwards Deming's challenge: "If Japan can, why can't we?", Which he threw in one TV program (NBC channel).

More attention has been paid to quality as the main distinguishing feature of highly competitive products. Such well-known companies as Hewlett-Packard, 3M, John Deer were involved in benchmarking. At the beginning of the study, General Motors formulated 10 hypotheses about the factors that have the greatest impact on quality. Confirmation of their legitimacy was required by data on the activities of organizations that are partners in the study.

Benchamrking allowed General Motors to objectively and comprehensively assess the quality management systems of the organizations that participated in the study. The employees of the company found out what is the dependence of the overall efficiency of the company on quality management.

General Motors and its partners' research report was published in September 1984, while similar data, which led to the development of the Ballbridge model criteria and ISO 9000 series normative documents, appeared in the public domain in late 1998.

Thanks to this advance in knowledge, the benchmarkers led by General Motors gained some competitive advantages. The quality management systems of these enterprises have undergone improvements, which has made it possible to achieve a higher opinion of consumers about the level of quality of their products in comparison with the products of other companies.

It should be noted that General Motors did not systematically and purposefully study the operating conditions of the enterprise and the main business processes, although the results of such studies are the basis for the organization's self-improvement. Benchmarking made it possible to determine the main parameters of the quality management system, and they did not repeat it. This approach is typical for most benchmarking studies.

In addition, General Motors is committed to meeting the requirements of the QS 9000 industry standard (a regulatory document based on ISO standards 900, taking into account the peculiarities of the automotive industry), for participation in competitions for the Malcolm Ballbridge Prize, for the development of the Six Sigma methodology. However, experience shows that the improvement of the quality management system should be evolutionary.

GIA Benchmarking Circle

The Global Intelligence Alliance (GIA) is a group of companies specializing in consulting. They research the market and help set up and operate market research processes.

As part of its activities, the GIA organizes benchmarking circles to meet with market research leaders, discuss and share best practices that relate to different aspects of research management.

The group has conducted more than 40 benchmarking workshops since 1999. Market research specialists from 30 organizations participated in these projects. A typical project is to hold 2-4 thematic meetings to discuss the issues identified by the project participants, with the support of a consultant from the GIA team.

The benefits companies derive from such meetings are clear:

• they get best-in-class training and use cases without spending a lot of money;
• learn from the experience of other organizations;
• exchange ideas with specialists with extensive experience in other sectors of the economy;
• learn from the mistakes of other companies, thus avoiding unnecessary costs in their activities.

The core of the benchmarking process at the GIA is comprised of meetings on various topics. They are conducted in turn by all participants. The duration of the meetings is 6-8 hours. Their themes are not repeated.

Basically, the topics of the meetings held are as follows:

• integration of market research and strategic planning;
• integration of market research and marketing activities, sales;
• development of a network for collecting market information within the company;
• competitive counterintelligence;
• development of reporting on market research;
• drawing up plans for scenarios and organizing educational games.

Nokia Social Media and Benchmarking

The purpose of Nokia's benchmarking research is to support and set new development objectives in various areas (logistics, research and development, employee relations). Benchmarking is an integral part of firm development projects and training programs.

The company practices different types of research (joint and competitive benchmarking), participates in benchmarking groups, projects on selected topics and in relation to specific organizations. Nokia also conducts broader benchmarking studies. Sharing data on benchmarking results can also be part of academic research projects in which several industrial companies are involved.

New opportunities for research have opened up with the introduction of social media channels not only within the company but also outside the company. Social media fosters collaboration through collaborative activities. These interactive sites allow knowledge sharing during the planning and preparatory phases, as well as during the analysis and implementation of improvements.

External resources such as LinkedIn, Twitter and Facebook have become widely used in benchmarking research. In each of these social networks, professional groups have been created, in which you can discuss in detail topics that are of interest to each participant.

Thanks to work in social networks and the use of platforms for joint activities, it became possible to take information from additional reliable sources, interact with other organizations, adopting their experience in order to support benchmarking (primarily in the field of projects software which is open source and the respective developer communities).

Nokia has experimented on more than one occasion using social media to explore new ways to share information and discuss technology training. IBM was involved as a partner in these experiments.

Areas of particular interest are: methods of working on open source software projects, the use of virtual 3D spaces to work in a global context on professional level, software development and open source innovation.

Blogs and wikis run by professionals, discussion forums such as YouTube and Slideshare are dynamic and direct sources of information, interaction and information exchange. The use of social networks is possible at any stage of benchmarking. Internal blogs and wikis also help prepare, conduct research, and share results.

How benchmarking is used in Russia: examples of companies

In our country, benchmarking is not as widespread as in the United States of America and Japan. For example, abroad, such research is regulated and supported by the state, there are special organizations helping to find benchmarking partners. There is no such practice in Russia.

The only Russian event held every year that can be considered supporting the development of benchmarking is the Government Quality Award. This award allows companies to improve various aspects of their activities, to become the object of reference comparison when conducting research by other enterprises. In addition, the laureates of the award have a good image, consumers perceive them as reliable manufacturers of high quality products. It is easier for such companies to find partners.

Table 1 contains examples of various benchmarking studies by domestic manufacturers.

Table 1- Examples of different types of benchmarking by domestic companies

The table shows that Russian enterprises prefer to conduct competitive benchmarking. For example, specialists from the Irbit Motorcycle Plant (IMZ) are studying the experience of Western companies in the following areas:

• production structure of the enterprise: the goal was to identify which divisions of the company should be left; after the European experience was studied, the managers decided to sell the foundry, forge and several other workshops, which freed up funds that contained unnecessary equipment;
• performance: the Indian company Royal Enfield, which produces motorcycles, was taken as a benchmark; In the course of the study, experts found that the staff of the reference organization is similar to that of IMZ, but in Royal Enfield there are 25 units of goods produced for each employee, in IMZ - 1.7 motorcycles. The following decision was made: to reduce equipment downtime, train employees in additional professions, send them to refresher courses.

Other areas of enterprise activity can also be selected as objects of competitive benchmarking, for example:

• production indicators: specialists of OAO Severstal ( metallurgical plant with a full production cycle) studied the experience of a number of Russian enterprises and 56 Western metallurgical companies; analysis of the benchmarking results allowed identifying areas requiring changes. It was decided to cut costs, develop the market, introduce new technologies;
• product quality: managers of the plant named after Stepan Razin contacted Baltika with a request to conduct comparative analysis the quality of the drinks produced; benchmarking showed the need to purchase new equipment for beer fermentation; after its launch, the product quality has improved;
• reporting indicators: the communication operator CJSC Peter-Star conducts a comparative analysis of reporting indicators in a specific format with a similar company Golden Telecom. Comparison of individual performance indicators is carried out with the data of the Svyazinvest organization.

Functional benchmarking is carried out by Nizhpharm. The Wimm Ball Dann company was chosen as the standard of comparison, the object of comparison was the display of products in pharmacies.

Research has shown that Wimm Bill Dann products always have the best shelf space. After analyzing the activity of the standard, the organization "Nizhpharm" changed the approaches to merchandising. It turned out that the shelves to the right of the checkout window were the most advantageous place for placing medicines in pharmacies.

Another type of benchmarking is internal. It is used when you need to analyze the processes or work of personnel in one company. An example of such a study is the internal benchmarking of banking organizations, as well as the main clinical hospital No. 1 in the city of Novosibirsk.

In the second case, the quality of medical care provided by each of the hospital departments was examined. According to the results of the study, the top three were selected. Their experience became an example for other departments who tried to apply it.

Although benchmarking is used by a number of Russian enterprises, it has not yet become widespread in our country. To carry it out successfully, you need to take into account the specifics of domestic companies. The full and successful application of benchmarking in Russia is hampered by the following reasons:

1. The ethical culture of enterprises is defective due to underdevelopment.
2. There is no practice of conducting benchmarking studies in Russia.
3. National accounting has certain features.
4. Procedures management accounting underutilized.
5. Companies distrust select benchmarks and benchmarking partners.

Common company benchmarking mistakes

• To Explore Is Not To Use

Researching a business in your industry does not mean learning from the experience. It is not enough to get certain data you are interested in, you need to organize a benchmarking process in order to understand what is behind it.

• Blind adherence to standards

For example, research has shown that the cost of a specific transaction at a benchmark company is $ 1. You don't have to aim for that number. It may well turn out that you will not be able to apply the chosen standard either to your clients, or to the market, or to resources. The standard of comparison must be selected such that the situation is similar to yours.

• Consumer interests are forgotten

It happens that some enterprises, studying the experience of successful companies and directing all their efforts to reduce the cost of operations, bringing them closer to the "benchmark", completely forget about consumers. If you cut costs, then the service is likely to deteriorate, as a result - customers will be lost, the business will decline. The approach to solving any issues must be balanced.

• Complicating the task

What metrics do you study as part of benchmarking? A process is a collection of tasks, and a system is a collection of processes. Studying and evaluating the entire system is impossible, these are long and expensive processes. Select one or several processes from the system, study in detail. After that, start exploring the next part.

• Strange direction

Do not dwell on those topics that do not correspond to the strategy and goals of your business or conflict with other initiatives of the firm. Benchmarking projects should be tracked by strategists to ensure they are not irrelevant.

• Slippery concepts

If you choose a topic that is very difficult to work through, then you will be wasting a lot of effort. One of these topics is corporate communications. If you want your research to be useful for you and your company, then highlight from this line of business the main goals for implementation that can be rigorously measured (for example, distributing memoranda throughout the enterprise).

• Indefinite basis

The essence of this mistake is in studying the experience of other companies without a preliminary analysis of their own activities. Benchmarking implies the need to have data on the performance of your company. This information may be provided by the organization to research partners in exchange for information of interest to it.

• Poor questions

There is a benchmarking etiquette, and its basic rule is: do not ask your partner questions, the answers to which can be easily found in the literature.

• Spy passions

Partners need to know what data you need, how you will process it, who will have access to it, what are the purposes of their use. The ideal option is when the participants in the benchmarking study enter into a formal agreement among themselves, in which these issues are stipulated.

To avoid mistakes when conducting benchmarking using social media, contacting professionals will help.

Benchmarking is understood as a systemic comparison of organizational processes and performance, carried out on the basis of pre-selected indicators (Fig. 1). The purpose of benchmarking is to identify the gap between the best results achieved and what the company is currently showing in order to develop new standards and / or improve processes.

There are four types of benchmarking.

1. Internal - the comparison of performance and applied techniques in different departments of the company, that is, in business units.
2. Competitive - comparing the performance and performance of a company with the performance and performance of its direct competitors.
3. Functional - compares the performance and performance of companies from the same industry.
4. General - Comparison of indicators and results of activities of companies from different industries, carried out to find the most effective methods of work.

All types of benchmarking can be beneficial as they allow a company to better understand its strengths and weaknesses, identify problems and possible ways to eliminate them; they also set norms, set new directions, and generate new ideas to improve company performance.

Benchmarking methods vary depending on situational characteristics and / or explanatory factors that will help explain the difference in performance between the companies being compared. Moreover, some benchmarking techniques identify expected trends and how best practices will be developed. Other practical questions can be explored in this analysis.

When to apply the model

The choice of the type of benchmarking depends on the goal. Bearing in mind that what is conceived and its implementation in practice usually do not have 100% coincidence, we can formulate the purpose of benchmarking as follows: it is a method of obtaining an answer to one of the following questions.

• How well are we doing our business?
• Are we doing our job as well as others?
• How can we improve our performance?

The scale of a benchmarking project is determined by the impact it is likely to have on the company, the freedom to communicate its results openly to all stakeholders in order to increase the likelihood of success in the implementation of improvement projects, and the efforts that are required to achieve results that are important in practice.

How to use the model

Ideally, companies (or some other similar structure) participating in benchmarking should show higher or at least the same results as the studied company (structure), which in this case is called the target. You can find such companies with the help of experts and through specialized publications. However, due to differences in products, processes, structures, or specific leadership and management styles, it can be difficult to compare companies.

This difficulty can be overcome with one practical trick. Research shows that it is possible to compare the companies in the sample using explanatory factors, for example, the reliability of a product being delivered to a consumer depends, among other things, on the complexity of the product. Therefore, a number of companies with approximately the same product complexity will have similar indicators for this quality, which makes it possible to form a homogeneous group for benchmarking delivery reliability (Figs. 2 and 3).

The assumptions made about the performance of the target company can be more accurate if benchmarking is applied to an indicator (for example, delivery reliability), taking into account several explanatory factors.

To conduct benchmarking, the following (sometimes overlapping) steps must be followed.

1. Determine the scope of the project.
2. Select a benchmarking partner (s).
3. Determine the scores, metrics and method for collecting the required data.
4. Collect data.
5. Analyze the differences, identify the facts behind the numbers.
6. Present the results of the analysis and discuss their implications in terms of the (new) objectives.
7. Track the dynamics of the development of the event (conduct monitoring) with the help of constantly carried out benchmarking.

conclusions

Benchmarking isn't easy at all. Too often, managers or consultants, on their own initiative, resort to benchmarking, forgetting to select the necessary indicators or tools in advance to conduct serious detailed analysis and present its results. It is hard to argue with the fact that many benchmarking projects end in failure. Comparing organizational processes and company performance in benchmarking is like the useless exercise of comparing disparate items like apples and pears. Even if benchmarking is done correctly, significant differences in performance that have been identified can be explained by the fact that “we are not like them,” and this “alienation syndrome” prevents the use of benchmarking as a mechanism to help guide the company on the path of change in order to achieve higher results. In addition, the presence of competition can impede the free exchange of information; sometimes this happens even within the company.

By using explanatory factors, benchmarking helps the company generate comparative data that allows executives and managers not only to improve performance (actually indicate opportunities for improvement), but also to show original yet proven solutions that can help tackle very difficult problems. Therefore, we argue that we should rather encourage differences between companies in a homogeneous group than try to exclude “dissimilar” participants on the grounds that their products or processes are “not comparable” to others.

Hello! Today we in simple words we will tell you what benchmarking is and how it is useful this tool for business.

Currently, in any field of activity, it has taken on a global scale. The leaders of many companies understand that it is necessary to comprehensively study the positive experience of competitors in order to predict their own successful future. In order to keep up with more successful competitors, they use benchmarking.

What is benchmarking in simple words

The term "benchmarking" is very close to the concept of "marketing intelligence", but marketing intelligence is the collection of practically confidential information, as opposed to benchmarking.

Benchmarking Is a way to study the activities of competing companies in order to adopt their positive experience and apply data about it in their activities.

The purpose and objectives of benchmarking

The main purpose of benchmarking is to establish how likely a particular activity is to succeed.

For a complete coverage of this concept, it is worth considering in more detail the main tasks of benchmarking:

• Determine how competitive the company is, what are its weaknesses;
• Establish what changes need to be made;
• Develop a plan to improve the company's performance;
• Develop new approaches to doing business;
• Put long term goals that are more global than the current ones.

Types of benchmarking

Benchmarking can be roughly divided into several types:

1. Functional - allows you to compare how individual functions of a particular manufacturer or seller work with more successful sellers, but working in similar conditions;
2. General benchmarking - is a comparative analysis of the indicators of production and sales of goods from one manufacturer, with similar indicators of another, more successful manufacturer;
3. Competitive – comparison with competitors who operate at a higher market level. For example: a company that operates in the regional market selects for comparison a company that has already entered the international level. This data can be considered more important, but it is not easy to obtain it;
4. Interior - comparison is made between processes within the company that are as close to each other as possible. Data in this case is easy to collect, but the information is rather biased;
5. Strategic benchmarking – this is the search procedure new strategy development that will ultimately lead the company to achieve the highest level of performance. It is he who determines the goals that the company will have to achieve;
6. Cost Benchmarking – if carried out correctly, it allows you to reduce costs, as well as determine the factors that affect their formation.

Publications are used as sources of information, various lists of prize-winners and winners in the category “quality” of various awards, as well as various databases (audit, consulting).

To conduct benchmarking, usually a dedicated working group is created. It is better to include specialists from different structural units companies. This increases the chances of an objective assessment of the information received.

Benchmarking methods and steps

The benchmarking methodology includes certain stages:

1. A specific function of the manufacturer's or seller's business is selected;
2. Parameters are selected for comparison. It can be one criterion, or it can be a group;
3. Information about similar manufacturers or sellers is collected;
4. The information received is carefully analyzed;
5. A draft of the changes that will be made to this function is being developed;
6. Preparation in progress business case planned changes;
7. The changes are being implemented in the company's practical activities;
8. The progress of the implemented changes is monitored and a final assessment is given to them.

The result will greatly depend on how well the collection of the necessary information is organized.

What indicators are compared in the benchmarking process

Can be compared:

• The volume of products or services provided;
• Financial efficiency;
• Business processes.

Benchmarking is not industrial espionage

You shouldn't confuse benchmarking with industrial espionage. These are two completely different and dissimilar concepts. Benchmarking compares its products or services with similar products. Situations also arise when competing companies exchange experience at mutual desire.

In addition, most often in benchmarking, information that is in the public domain is used, that is, it can be obtained through surveys, analyzing pricing policy.

Competitive intelligence is a fine line between industrial espionage and research.

In our country, several companies often unite in order to resist competitors using benchmarking. Examples include the experience of several pharmaceutical companies that have established the exchange of information among themselves, while closing access to it to foreign competitors. Or the same cooperation in the banking sector: to solve the problem long queues a large bank adopts the experience of another bank (an increase in the number of ATMs, a decrease in fees for using online banking, the development of automation of many processes).

Disadvantages of benchmarking

• It is necessary to search for a benchmarking partner;
• Sometimes the services of consultants are required;
• If the organization does not have experience in benchmarking, the initial stages will require significant costs;
• Not always the necessary changes are welcomed and accepted by employees of the organization, although they are aimed at increasing the level of productivity;
• Not all general methods may apply to a particular organization.

How to benchmark a company yourself

The procedure that would suit any company simply does not exist. Each company develops it itself.

You can give only a few tips that it will be possible to rely on in the process:

• Select for comparison only those processes or services whose performance is unsatisfactory. Comparing indicators with which everything is in order will only entail a waste of time and money;
• Don't choose too extensive a list of indicators or processes to analyze;
• Prepare the company or enterprise for the planned changes in activities;
• Gather a group of highly qualified professionals;
• Use the appropriate software to make the process easier.

An example of benchmarking in an enterprise

The example of the automobile company Ford is very indicative. In the 90s of the last century, benchmarking was carried out in order to lift the company's shaky position in the market. The company's specialists carried out internal research a large number of car models to explore the benefits of each and identify the models that consumers preferred.

For each criterion, the best car in its class was identified, based on this, a strategy was developed to surpass the highest indicators.

The result of the analysis was a car that received the title of "Car of the Year". Gradually, the peaks reached were lost again.

The management of the company, in the end, came to the understanding that benchmarking is an ongoing process, it cannot be considered a one-off.

Summing up, I would like to say that benchmarking allows you to find out why a competing company has achieved significant success in its field of activity, which actions have led to a positive result. An analysis of only one of these indicators will not give a complete picture of the company's activities. Comparisons need to be made for similar indicators in similar areas of activity.

In simple words, benchmarking(English Benchmarking) is a comparison with the best. When collective farmers in Soviet films demonstrated their achievements at agricultural exhibitions and paid visits to each other to exchange best practices, this was not called benchmarking, but in fact it was exactly it. When Nikita Khrushchev visited American farms and admired the corn harvest and milk yield, he also did benchmarking.

Benchmarking helps to improve business processes relatively quickly and at the lowest cost. It allows you to understand how leading-edge companies operate and achieve the same or better results. The value of benchmarking is not only that there is no need to reinvent the wheel. By carefully studying the achievements and mistakes of other companies, you can develop your own most effective business model.

Benchmarking isn't just about copying systems used by successful companies. This approach cannot produce the desired results due to differences in business structures. The main thing is to adapt these principles for internal use. It is thanks to this that the benchmarking system can be effective not only with direct competitors in the market, but also with firms the target audience which are completely different. You can even analyze the work of enterprises from a completely different field of activity.

Proper benchmarking of a company can dramatically improve its functioning, but only if there is an understanding of its own processes. When comparing two business models, you need to be well versed in both, otherwise you will not get a clear idea of ​​the big picture. Therefore, you first need to analyze the production processes in your company, and only then start benchmarking.

Goals and objectives of benchmarking

The exchange of experience, as well as the study of other people's developments, has always been beneficial. But it cannot be said that this happens in 100% of cases. Some organizations are so far apart in various ways that benchmarking may not be useful. In this regard, the need for this step must first be justified, that is, the strategic goals of the company must coincide with the need to conduct such a study. Benchmarking is a full-fledged business management tool, since its goal is to improve the system and increase the competitiveness of the company in the long term. This goal is achieved through the solution of specific issues.

In the process of comparing business schemes of different companies, two main tasks are solved:

1. Calculation of indicators of your own enterprise and their comparison with the selected standard.
2. Analysis of someone else's experience and its implementation in your company.

How to make a company a market leader: the experience of X-fit

Irina Tumanova, executive director of X-Fit, told the magazine “ General manager”How from a small company X-fit managed to become the market leader.

The benchmarking functions are as follows

1. To give an idea to the management about the current state of affairs in the company, to overcome the stagnation in the management sector.
2. Strive for improvement.
3. Find out in time that the organization is lagging in a certain area.
4. Identify company resources and identify weaknesses to strive to overcome.
5. To set hard-to-achieve, but real tasks for the company.
6. Find out priorities for optimizing work.
7. Determine the level of the company in comparison with the best in the world.
8. Calculate the degree of lagging behind the firm.
9. Identify the best management systems and put them into operation.
10. Prepare an action plan to correct the activity.
11. Combine the long-term development plan with the company's self-improvement efforts.
12. Find previously unused technologies or management methods.
13. Concentrate on those factors that bring undoubted benefits to the enterprise.
14. To achieve large-scale improvements in the work of the organization, "breakthrough".
15. With the help of someone else's experience, relieve the company of the "need" to learn from their own mistakes.
16. Create a principle of continuous improvement in the organization.
17. Reduce the financial costs of improving the performance of the company.
18. Reduce risks when introducing new methods.
19. Raise the main financial performance.

Benchmarking objects

Products and services. This position is the first to which benchmarking is focused. The activity of a competing company is analyzed, and the moments thanks to which its business is more successful than yours are highlighted. After that, it becomes clear what needs to be done to increase the productivity of the home company. There is one point here. In the case of manufactured tangible products, benchmarking is somewhat easier than in the case of services. The fact is that it is much more difficult to obtain the information necessary for research on the latter parameter. At the very least, you need to analyze the production field and take several interviews with competing firms.

Financial indicators. Benchmarking financial performance is not so difficult, of course, if you know where and what to look for. Usually such information is in the public domain. Having organized a study on financial performance, you can determine the possible achievements and tasks that you should set yourself. Material investments for carrying out such an analysis require very small ones, but you can meet it in a short time.

Business processes. Business process research is the most effective part of benchmarking. To maintain competitiveness in the market, a company must develop its business as a whole, constantly invest various kinds of resources in it and control all operations. The capabilities of a particular organization can be "calculated" by its business processes. This type of analysis is especially important in a situation where two enterprises directly compete with each other, offering the consumer the same product. The organization that has managed to improve its competitiveness as efficiently as possible at the lowest cost will benefit.

This research on the benchmarking system is primary. It is with the help of such an analysis that specialists subsequently describe all the further steps that need to be taken to increase the company's profitability. But for this it is necessary to carefully study the entire chain of work of the competing company, from its suppliers to the work organization system. By the way, it is not at all necessary to be limited to the study of the activities of only one organization. It is useful to take note of related businesses working with the same products and benchmark their business processes.

Strategies. No business can function well without a strategy. You can improve the performance of your own company by carefully analyzing the strategy and organization of a competitor's work. True, it is not so easy to obtain comprehensive information in this case. Often times, such data is a closely guarded company secret. When benchmarking a strategy, you first need to use logic, and only then the research will bear fruit.

Staff. Thanks to personnel benchmarking, you can compare the performance of your own HR services with those of the leading companies in the world by several indicators. Having received the results of the analysis, the company's management will be able to better manage personnel. Before starting the comparison, you should determine the main indicators of the HR service. Some executives consider this department to be almost a burden for the company, steadily and unjustifiably absorbing financial resources... Only this is far from the case. The fact is that the work of the HR service in one way or another affects the quality of the activities of many departments. Sometimes this happens in such an indirect way that the benefits of this department are difficult not only to assess, but even to notice. Therefore, carefully conducted benchmarking is needed, with the help of which it is possible to obtain specific indicators of the HR service, as well as identify problems requiring immediate intervention.

Functions, groups and organizations. Using benchmarking, experts collect information not only about the products manufactured by a competitive company, but also how exactly this is done. Each enterprise has a certain internal structure and organization of work. It is precisely the clarification of all such details that is included in the task of benchmarking on this topic. Moreover, attention is often paid to the most insignificant, at first glance, nuances. For example, the professional qualities of the employees of a competing firm. The analysis carefully examines the total number of personnel in the studied company, the groups created, their functions, etc.

To facilitate the benchmarking process, in this case, various kinds of websites are often designed, with the help of which contacts between specialists are established. Thanks to this, research costs are significantly reduced, because to obtain information there is no need to pay travel expenses for employees of the analytical department, and the quality of incoming data does not suffer.

Types of benchmarking

Internal benchmarking. Based on the name, it is clear that this type of research is carried out exclusively within the company. For comparison, the processes, goods or services that are the closest in terms of parameters are taken. The advantage of the method is that the analysis can be carried out without much difficulty, since there are no difficulties in collecting data. The downside is the very limited possibilities for research, as a result of which bias in the results is possible.

Competitive benchmarking. The analysis is carried out on the basis of comparing the products and services of his company with the products and services of a direct competitor company, and the latter can operate both in the local, regional or international market. This type of benchmarking will be more useful if you choose an international organization for comparison.

Functional benchmarking. In such a study, the processes of one's own company are compared with those of another. The difference from other types of benchmarking is that the firm chosen as the benchmark operates in a completely different field. The advantages of this method are in less effort to obtain objective data, and by absolutely ethical and legal methods.

Generalized benchmarking. For the analysis, companies are selected that have the best indicators of processes and approaches in a certain field of activity. Moreover, information about the work of these organizations is in the public domain. For example, there are many publications about the production system at Toyota or Motorola. The analysis of the processes and approaches most suitable for their own company is carried out, which, after appropriate adaptation, are introduced into work.

• Lean Manufacturing: Small Steps for Bigger Goals

Benchmarking examples

Internal benchmarking at Hewlett-Packard

Direct competitors from Japan were ahead of Hewlett-Packard Corporation in many ways. In particular, products were produced of no less quality, but at a faster pace. The question arose about maintaining the competitiveness of the company. Hewlett-Packard decided to conduct a R&D review to find effective methods to accelerate production.

The company compared the activities of its divisions using the payback period of the project as a criterion. In order for the products to meet the real requirements of consumers, we used the technology of deploying quality functions.

The result of this benchmarking was the firm's decision to implement a methodology called Six Sigma. Optimization of production consisted in complete documentation of the process, measurement of characteristics with a decrease in the variability of their values. There was also a constant search for ways to improve algorithms. If you look closely, the Hewlett-Packard Corporation acted practically on the principle of DMAIC (Define, Measure, Analize, Improve, Control - definition, measurement, analysis, improvement, control).

Competitive benchmarking at Ford

The Ford Corporation could not compete with its rivals in many design parameters. In addition, according to consumers, its products were not functional. It got to the point that the company's profits plummeted. She was able to return the market only after a completely new family was created. passenger cars Taurus. This car was obliged to at least not yield to competitors' models. To achieve this effect, a benchmarking analysis was carried out. The company's specialists organized a survey among the population in order to find out which properties of cars are the most popular. After that, we chose the cars on the world market that best meet the particular requirements of potential customers. The task of Taurus was not only to reach their level in terms of various characteristics, but also to surpass it.

Benchmarking studies were carried out taking into account a huge number of car brands, and it did not matter whether they were direct competitors of the company or not. For example, cars such as the BMW and the Opel Senator never competed with the Ford Taurus, but had some traits that would appeal to buyers. About 400 parameters of more than 50 car models were analyzed. New products at Ford were developed and implemented based on the principles of DMADV (Define, Match, Analyze, Design, Verify - definition, measurement, analysis, development, verification). The result was not long in coming. The Ford Taurus soon became the Car of the Year and came out on top in sales.

Unfortunately, the success didn't last very long. In the Taurus transmission, certain flaws came to light that undermined the car's reputation. Due to the continuous development that followed, the company began to deviate more and more from the original concept. As a result, by the end of the 90s of the last century, Taurus sales fell by almost seven times. They tried to fix the situation, but in 2006 the production of this family of cars was discontinued. However, they learn from mistakes, and Ford is no exception. The main lesson this time was the understanding that benchmarking of competing enterprises is not a one-time event. Such studies should be carried out regularly in order to update the results and adjust the activities. In general, the Six Sigma methodology says practically the same thing: the search for sources of variation not only gives some knowledge about the level of a firm's competitiveness, but also shows a graph of its change. As a result, company management is able to take into account not only the short-term effects of the implementation of certain improvement programs, but also the future consequences of the decisions made.

Functional Benchmarking at General Motors

General Motors 1982-1984 conducted benchmarking analysis, with the help of which she tried to find a way to improve the quality and reliability of products through alternative management options. At that time, within the framework of the "competition" with Japan, most firms began to pay increased attention to the quality of the goods, considering that this parameter was the main one in the struggle for competitiveness. General Motors performed data-driven research famous companies: Hewlett-Packard, 3M, John Deer. Before proceeding with the analysis, experts from General Motors set out 10 hypotheses about the factors that most affect product quality. These hypotheses had to be confirmed using information from partner companies that are also conducting benchmarking work.

An objective comprehensive assessment of the quality management systems adopted in the firms participating in the research was formed. As a result, a connection was found between the quality of goods and the efficiency of enterprises. Moreover, largely thanks to this study, the Malcolm Baldrige National Quality Award appeared a little later, and then the ISO 9000 series of standards, which established general requirements for quality management systems. General Motors outstripped research on the criteria of the Baldrige model by 14 years, however, as well as the requirements of ISO 9000 standards. This gave the company and its partners an undeniable advantage over competitors. The fact is that customers considered their products to be of significantly higher quality than the products of other firms working in the same area.

But, as is typical of many benchmarking analyzes, this study also suffered from a lack of regular study of working conditions and production processes in the company. Instead of constantly improving itself, General Motors was satisfied with the achieved advantage. And then it completely switched to following the requirements of the industry standard QS 9000 (the latter is a modified version of ISO 9000, taking into account the peculiarities of the automotive industry). General Motors also regularly competes for the Malcolm Baldridge Prize and is learning the Six Sigma methodology. But now all automobile enterprises are engaged in this, and the quality management system must constantly develop.

General Benchmarking at Xerox

There are enough examples when benchmarking helped one or another company in a difficult situation. However, one of the most famous is Xerox's comparison of its logistics system with those of more successful businesses. Unwittingly, Xerox confirmed the correctness of the American scientist William Deming, who argued that the crisis experienced by the organization often provokes quality improvement. He forces executives to take action to get the company out of trouble. In the late 1970s, Xerox began to succumb to pressure from competitors in Japan. For 10 years, from 1974 to 1984, the return on assets of the firm dropped from 22% to 4%. Xerox decided to try to get out of the crisis and find more suitable management methods using benchmarking.

Fuji Xerox, the Japanese subsidiary of Xerox, played an important role in the study. The company analyzed three main dimensions: its own processes and costs, the costs and processes of its branch, and similar components from competitors. Thanks to this research and open information At market prices for copiers, Xerox specialists were able to figure out the cost of operations of competitors, and then calculate the areas in which they demonstrated the best financial performance. As a result, the firm was able to estimate the size of the gap between itself and its competitors, but it was not immediately possible to close it. It was only after drawing on the experience of the world's leading companies that Xerox managed to catch up with competing firms in areas where it previously lagged behind. But benchmarking in that situation never played the role of a genie from a lamp, capable of getting rid of all the troubles.

The 90s came, and digital technologies came to replace analog technologies. At the same time, Xerox, from a cumbersome functional structure, switched to a simplified scheme. Improving production processes has received much less attention than before. The conquest of leadership in the copier market by improving the quality of goods and conducting research has not been forgotten, but has been temporarily excluded from the priority tasks. From Xerox's experience, benchmarking is a tool that can help a company improve, but nothing more. This is not a panacea, and even less a magic wand, with a wave of which, you can solve all the problems. In some situations, simply copying the experience of more advanced enterprises may not help.

Are benchmarking tools suitable for small companies?

If a medium-sized firm decided to engage in such an analysis, then it may have questions:

Don't give up on benchmarking just because there is a lot of work ahead. By leveraging the full power of benchmarking, you can take your firm to a whole new level.

Benchmarking stages: from object selection to implementation of changes

Benchmarking is not an equation that is solved in a strictly defined way. Unified system not here, each company uses its own developments. But all activities can be broken down into several stages:

1. At the first stage, you need to select a benchmarking object, analyze and detail it. It can be a process, service or product produced by an enterprise. Here it is important to decide on the following points: what resources the firm can afford to allocate for this research; a one-time promotion is planned or a similar practice will become regular.

2. At the second stage, the characteristics that need to be analyzed are determined. The object of analysis can be certain process parameters, consumer properties of a product or service.

3. The third stage is the appointment of specialists who will conduct benchmarking. It is advisable to take people from different departments. This will provide an opportunity to take a broader look at the object of research both in your own company and in a benchmarking partner firm.

4. The fourth stage is the actual choice of partners. These can be serious enterprises, the success of which in the implementation of the characteristics you are interested in is undeniable (you defined the characteristics themselves at the second stage). As partners, you can take as one company, or several. In the case of internal benchmarking of an organization, partners will be related divisions of the company, processes within the enterprise or manufactured products will be analyzed.

5. At the fifth stage, the collection and analysis of data necessary for further comparison begins. Often the information received needs to be processed. The fact is that in different firms the same specifications product descriptions may vary. Everything will need to be brought to a common denominator.

6. The sixth stage of benchmarking is to assess the company's ability to catch up with the leading organization in terms of the required characteristics. Assessment methods can be different, for example, using GAP analysis.

7. At the seventh stage, specialists determine what changes are needed in the work of the enterprise to achieve a specific result. The overall picture should be based on the results of adapting the acquired knowledge to the conditions of one's own company.

8. The eighth stage is devoted to the development of strategic goals and drawing up plans to achieve them. Much depends on the scale of the proposed changes. Plans can relate to the organization of production, management system and other aspects of the company.

9. At the ninth stage, the previously approved plans are being implemented. Moreover, this process needs constant control. If necessary, plans are adjusted along the way.

10. The last step is to decide on re-benchmarking to solve new problems, if, of course, the previous ones were successfully implemented.

2 approaches to benchmarking

Benchmarking wheel

Stage 1. Planning.

1. Creation of a team of professionals.
2. Selection of parameters for research.
3. Determination of the process (product, service) that needs to be compared.

Stage 2. Search. Selecting benchmarking partners or other data sources.

Stage 3. Data collection. The choice of the method of obtaining information according to certain parameters.

Stage 4. Analysis. Comparison of indicators and finding out the degree of lag of your company from the one chosen for benchmarking. Development and transmission of recommendations for improving performance.

Stage 5. Adaptation of the result. Making the necessary changes to an organization's product, service, process, or strategy.

The Xerox Approach

Xerox has proposed its own approach to benchmarking, consisting of five phases and 12 steps.

Phase 1. Planning.

1. Figure out what exactly needs to be compared.
2. Find a benchmarking partner.
3. Outline a way to get the data and start collecting it.

Phase 2. Analysis

1. Determine how big the gap between companies in terms of performance.
2. Develop and provide future levels of these indicators.

Phase 3. Coordination

1. Link the results obtained and the permissible gap in terms of indicators.
2. Define functional goals.

Phase 4. Action

1. Development of a further action plan.
2. Implementation of individual activities in the company with tracking the progress of the company.
3. Adjustment of the comparison of indicators.

Phase 5. Completion

1. Leading the way.
2. Introduction of the gained experience into the activities of the company.

Common pitfalls of benchmarking

1. Some people perceive benchmarking as a kind of inspection of the organization. But this is far from the case.

With the help of benchmarking research, you can get certain useful numbers, but the system itself is aimed at finding out what these numbers say, that is, you can find out where the enterprise is in certain positions.

2. Many are sure that some basic parameters have been developed long ago that do not need any improvements.

It is not possible to apply such a system in a company simply because any market is not monolithic. There is a difference in customer preferences, availability of resources, production conditions, etc. You need to find partners who will share their experience in achieving goals, as well as tell you whether your company is capable of taking such a height.

3. Another common mistake is a lack of attention to customer needs.

Some firms, after conducting benchmarking, are so carried away by the need to reduce costs while increasing the quality of goods that they completely stop paying attention to what the direct consumer needs from the product. In order to avoid such a mistake, it would be nice to use a specially developed complex system of business indicators - "balanced scorecard".

4. The desire to do everything and immediately positive results, most likely, will not give.

Executives who decide to benchmark absolutely all of the company's systems at the same time are making a big mistake. First, it's expensive. Second, it takes too long. Everything should be done gradually, analyzing one system after another.

5. Inconsistency also leads to failure.

Several points can be noted here. The use of benchmarking should be consistent with the company's strategy and should not conflict with other initiatives. The benchmarking implementation process must be directed and monitored by management.

6. It will be a mistake to set yourself vague, too "vague" tasks.

Sometimes benchmarking is tasked with analyzing communications between company employees. But the question is, how can this be measured and in what units? Therefore, it is better to choose more specific goals for the study, for example, to evaluate the system of distribution of powers in the company.

7. Conducting benchmarking without a pre-prepared platform does not make sense.

A similar situation may arise when the research of some processes in competing firms or the search for benchmarking partners begins to be carried out earlier than data on the same processes in their own organization is obtained.

8. An insufficient analysis of the research partner can be a fatal mistake.

If both your own and your partner's time is wasted, then it will not lead to anything good. Existing code similar studies states that if you are able to obtain the necessary data or solve the issue on your own, then you do not need to bother your partner about this.

Iwao Kobayashi "20 Keys - a Methodology for Creating a Quality Work Environment".

This paper describes the 20-key system that organizations can use to improve their performance. This technique is useful for benchmarking. The sequence of actions deduced by the author is extremely simple, transparent and useful. It solves the fundamental problems of the production of goods and the provision of services. Admittedly, the method proposed by Kobayashi, unlike many others, guarantees the achievement of the desired results with less time and effort. The book not only combines world achievements in increasing productivity into a single whole, but also implements the interconnection of individual systems with each other.

Rob Rader "Benchmarking strategy as a means of increasing profitability".

After reading this book, you can easily understand the basic principles, methods and rules of internal and external benchmarking. It is easy to learn how to select samples and benchmarks for planned research, based on the study of the company's activities and analysis of the needs of all stakeholders. The book explores the methods by which you need to collect benchmarking data and implement the experience of other firms in your own organization. The author talks about the code of conduct for the participants in the process and the rules for reporting on the results of the analysis.

Rob Rader advises on how to properly use benchmarking as a tool for the development of the organization, as well as for formulating a strategy for taking advantage of the acquired benefits. By following the guidelines in this book, you can turn an ordinary well-performing firm into a world-class company.

Harrington H.J., Harrington J.S. "Benchmarking in in the best possible way! 20 Steps to Success ”.

This edition is practically a benchmarking of the benchmarking itself. Having studied all the recommendations offered in the book, you can improve both the work of any division of the company, and all its activities in general.

The authors review successful research methods, from purchasing products from a competing firm to analyzing the manufacturing process. With this guide you can choose the best way benchmarking.

The work used huge amounts of data from Ernst & Young. The language of the book is completely uncomplicated and free from professional jargon, which is very important in many cases. After reading this publication on benchmarking, you can find out how some companies using this methodology achieved 2000% growth in production in just eight months. Maybe you can do something similar?