WorkshopOctober 2015

Stage 2

Research (research current state)

6. Obtain approval to start the next stage of TRADE

1. Understand area of focus to be benchmarked2. Define performance measures3. Identify current performance

5. Review project progress and TOR

Equipment errors

Information errors

Time taken

Focus on best practices in: •Equipment transfer •Information transfer(training, utilisation of space, speed, managing small teams, safety systems)

4. Prioritise and finalise the practices to be benchmarked

Step 1 – Understand area of focus to be benchmarked

Literature review Review of company documentation Process flow charts Brainstorming Questionnaires Structured interviews Focus groups Expert presentations

There is a variety of company documentation that may help you to have a better understanding of your project

Annual reports Financial ratio analysis Operational performance reports Minutes of meetings Patents Audits Operational and quality system manuals Business excellence assessments Questionnaire data Project files Previous benchmarking projects Process flow charts

Management

Cause

Cause

Cause

Man

Cause

Cause

Cause

Method

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Measurement Machine Material

Effect

The Fishbone Diagram is a good tool to use to aid in the understanding of a problem/issue

Example of a Fishbone Diagram applied to the airline industry

Drawing a process flow

chart will help team

members to better

understand the current process and

the main areas for

improvement

Terms - plan the project

Completed benchmarkingproject

Start benchmarking project

Act - undertake data collection &analysis

Evaluate stage complete?

Yes

Deploy - communicate & implementbest practices

Terms stage complete?

Research - research current state

Research stagecompleted?

Deploy stage complete?

Yes

No

Evaluate - evaluate the process &outcomes

No

Act stage completed?

Yes

No

Yes

No

No

Yes

Common process flow chart symbols

Definitions

Process:

Any activity or series of activities that takes an input, adds value to it, and provides an output to a customer.

System:

A group of processes that are related and may or may not be connected.

The Process Picture

Supplier

Process• Add Value• Prevent Errors• Identify Errors• Correct Errors

Customer

MeasurementSystem

Feedback

Requirements

Input

Feedback Feedback

Requirements

Output

Process Hierarchy

ProcessesProcesses ProcessesProcesses

Sub-ProcessesSub-Processes

ActivitiesActivities

TasksTasks

Processes

Each symbol on the flowchart provides an opportunity for

improvement

• Operation symbols • Decision symbols • Inspection symbols • Delay symbols • Documentation symbols • File symbols • Transportation symbols

Process loops or branches are opportunities for improvement/

streamlining

Branch

Main

Loop

Using a Rainbow Flowchart where colours illustrate different types of processes or opportunities for improvement can be very useful

Start

End

NoYes No

Yes Yes

NoNo

Yes

Yes

No

Yes

No

No

YesYes

Yes

Yes

Yes

Yes

NoNo No

NoNo

No

Bureaucracy

Business Value-Add

No Value-Add

Value-Add

When reviewing the area of focus you are likely to identify many opportunities for improvement and potential solutions

• High level of bureaucracy• Out-of date processes• Overly complicated

• Not used processes• Costly• Time consuming• Irritating

Record potential solutions as you proceed through the project

Step 2 – Define performance measures

Cost – for example, labour cost, material cost, product/service cost

Quality – for example, error rate, complaint levels, defect levels

Time – for example, production time, cycle time, value added time, changeover time, delivery time, response time

Value – for example, customer satisfaction, staff satisfaction, community satisfaction

Performance Measures Record Sheet

Measure

Type of measure

Purpose

Relates to

Benchmark

Target

Current performance

Formula

Frequency

Who measures?

Source of data

Who acts on the data?

What do they do?

Notes and comments

1. What gets measured gets done;2. If you don't measure results, you can't tell

success from failure; 3. If you cannot see success, you cannot reward

it; 4. If you cannot reward success, you are

probably rewarding failure; 5. If you can't see success, you can't learn from

it; 6. If you can't recognize failure, you can't

correct it; 7. If you can demonstrate results, you can win

public support.

7 reasons for measuring performance and recognising success

Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. Reading, MA: Addison-Wesley.

Step 3 – Identify current performance

What is your current performance? Historical trends?

Whatever you decide. Make sure you prioritise which processes are most

important to improve!

Step 4 – Prioritise and finalise the practices to be benchmarked

Review your findings from steps 1 to 3 and decide if you want to stick with your current Terms of Reference or make the project smaller or bigger…

Break the “area of focus” down into its component parts and

prioritise what is most important to improve

Practice/ process/ issue

Frequency of problems with process/issue (1 = Low, 5 = Moderate, 10 = High)

Importance of solving the problem/issue (1 = Low, 5= Moderate, 10 = High)

Feasibility of solving the problem/issue (1 = Low, 5= Moderate, 10 = High)

Total Score (FxIxF)

Training of staff 8 8 10 640

Recruitment of staff 5 5 8 200

Motivation of staff 6 8 8 384

Systems/procedures 9 8 6 432

Area of focus – inconsistent customer service levels

Examples of prioritisation criteria

– Does the process/practice/issue show a direct linkage to strategic direction and current objectives?

– Is the problem frequent/infrequent or critical/non-critical?

– Is the process owner behind the project and supportive of change?

– Can results be obtained within 6 months? – What is the likelihood of finding better practices? – What would be the likely cost of implementation?

Step 5 - Review project progress and TOR

Step 6 – Obtain approval to start the next stage of TRADE