Operational Engines Project

8/3/2019 Operational Engines Project

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BENCHMARKING

-BY GROUP 7


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INTRODUCTION

Benchmarking is the process of identifying "best practice" in

relation to both products (including) and the processes by which

those products are created and delivered. The search for "best

practice" can take place both inside a particular industry, and alsoin other industries (for example - are there lessons to be learned

from other industries?).

The objective of benchmarking is to understand and evaluate

thecurrentposition of a business or organization in relation to"best practice" and to identify areas and means of performance

improvement


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Application of benchmarking involves four key

steps:

(1) Understand in detail existing business processes

(2) Analyse the business processes of others

(3) Compare own business performance with that of

others analyzed

(4) Implement the steps necessary to close the

performance gap

Benchmarking should not be considered a one-off exercise.

To be effective, it must become an ongoing, integral part of

an ongoing improvement process with the goal of keeping

abreast of ever-improving best practice.


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Types ofBenchmarking

Strategic Benchmarking:Where businesses need toimprove overall performance by examining the long-term

strategies and general approaches that have enabled high-

performers to succeed. It involves considering high level aspects

such as core competencies, developing new products and servicesand improving capabilities for dealing with changes in the

external environment.

Performance or Competitive

Benchmarking:Assessing relative level of performance inkey areas or activities in comparison with others in the same

sector and finding ways of closing gaps in performance


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Process Benchmarking:Benchmarking partners

are drawn from the same sector. This type of analysis is often undertaken through trade

associations or third parties to protect

confidentiality.Focuses on improving specific critical

processes and operations.

Benchmarking partners are sought

from best practice organisations that

perform similar work or deliver similar

services.


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External Benchmarking:Businesses look tobenchmark with partners drawn from different

business sectors or areas of activity to find waysof improving similar functions or workprocesses. This sort of benchmarking can lead toinnovation and dramatic improvements.

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IMPROVINGPRODUCTDEVOLOPMENT

I


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IMPROVINGPRODUCTDEVOLOPMENT

The organization must start by understanding whatpractices should be adopted (what is possible). Next it

must consider its strategic direction (e.g., time-to-

market, being the low cost producer, the most innovative

producer, the highest quality/reliability producer,flexibility to respond to new products and markets)

given its market, its objectives, and its competitors.

Next, the organization must assess its strengths and

weaknesses. By focusing on the "gap" between where acompany is and where it needs to be, priorities can be set

for making improvements


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PRODUCT DEVOLOPMENT BEST

PRACTICES FRAMEWORK


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STRATEGIC ALIGNMENT

Undertake a new development project only

when resources are available. Overloading

projects stretches out projects, delaying time-

to-market.

Resources can be focused on higher

priority projects underway. The next highest

priority project can be undertaken when the

resources become available to support it asexpeditiously as possible.


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ANALYSIS AND IMPROVEMENT

In addition to the performance rating against each best

practice and for each higher level category, an overall

performance rating is developed by again assigning a

weighting factor to each category based on theirimportance given the nature of the business and the

product. This performance rating, when compared to

that of other companies, gives an indication of the

urgency of improving the development process.


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WhatisaBestPractice?

A best practice is the process of finding and

using ideas and strategies from outside yourcompany and industry to improve performance

in any given area.

Big business has used best practicebenchmarking over decades and realized billions

in savings and revenues in all areas of business

operations and sales. Small business can reap

even greater rewards from best practices.


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BenefitsofBestPracticesfor Small

Business

ReduceCosts: Small companies often do not have the deep

financial pockets of big business to "re-invent the wheel". By

learning what other companies have successfully done, a small

business can save money without testing new ideas.

Avoid Mistakes: Solving business problems on your own can

result in costly errors. Learning what others have done can keep

your business in business.

Find NewIdeas: Adopting the "Not-Invented-Here" attitude can

spell disaster for small business. Learn to borrow the best frombeyond your company.


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ImprovePerformance:When yourbusinesslooksforbest

practicesoutsideyourbusiness,awonderfulthing happens.

You raisethebarofperformanceand set newstandardsofexcellencetopropelyourcompanyforward.

HowtoBakeaBestPracticeCake?

Themethodologyforbestpracticestudyiscritical.Thisis

wheremostsmallbusinessesfail.Itislikebaking acake. You

need theexactingredientsand recipetocreatethesame

result.Thisalsoappliestobusiness.

Forexample,you learn ofanotherretailerrunning in-store

seminarsto drivetrafficand sales.Instead ofrushing outto

trythe newidea,you'll need therecipe.Whatresults did theretailerachieve?And how did theyachieveit?


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StepsforBestPractices

Identifyonebusinessprocessorservicetoimprove.(Product delivery)

Lookforonemetrictomeasure.(Late Shipment %)

Find competitorsand companieswithin yourindustryand outsideyourindustry.

(FedEx)

Collectinformation on thesuccessful,bestpracticesofothercompanies.(FedEx

spokeand hubsystem)

Modifythebestpracticeforyoursituation.(Haveoneretailstorepercityactas

centralhubforshipments.)

Implementtheprocessthen measuretheresults.

Remembertosurveycompaniesofallsizes.And thetimetocompleteabest

practicestudy doesn'thavetotakemonths.Afewweeksofliteratureresearchand

telephoneinterviewsareoften enoughforsmallbusiness.

Borrowing bestpracticesfromotherbusinessesand industriescan dramaticallyimproveyoursmallbusiness.Takethetimetolearn theingredientsofsuccessand

yourbusinesswillexcelin good timesand bad.


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SUCCESSFULBENCHMARKING

Thereareseveralkeystosuccessfulbenchmarking.Management

commitmentisonethatcompaniesfrequently name. Sincemanagement

fromtoptobottomisresponsibleforthecontinued operation andevaluation ofthecompany,itisimperativethatmanagementbe

committed asateamto using and implementing benchmarking strategies.

Astrong networkofpersonalcontactsaswellashaving an open mind to

ideasisotherkeys.In ordertoimplementbenchmarking atallstages,

theremustbeawell-trained teamofpeoplein orderfortheprocessto

workaccuratelyand efficiently.Based on theinformation gathered bya

well-trained team,theremustalsobean efforttoward continuous

improvement.Otherkeysincludeabenchmarking processthathas

historicalsuccess,sufficienttimeand staff,and complete understanding of

theprocessestobebenchmarked.


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Evaluating capital expenditure projects

whose cash flows are uncertain.

Determining the chance of meeting the

delivery date for a project.

Determining safety stock (A

llowing forSafety Stock).

Finding the chance of business not losing

money (or at least breaking even).


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THANK YOU

ASHWARYA VASHISTH

CHHAVI NANDA

MUSKAN AZAD

NAKUL GULATIPRATEEK SHARMA

SHIVEN GAUTAM

SWATI ANAND


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WISHINGALLOF YOU

HAPPY LOHRIFROMGROUP 7

Operational Engines Project

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