Requirements for a successful benchmarking. Essay
Requirements for a successful benchmarking., 497 words essay example
Essay Topic: top, job, process, progress
Benchmarking is basically a process by which a company measures its products, services and practices against its competitors. One of the experts once said, benchmarking is an ongoing investigation and learning experience that ensures the best industry practices are uncovered, analyzed, adopted, and implemented. Xerox has applied benchmarking to billing, warehousing and automated manufacturing departments. There are lots of confusion about what all are required for a successful benchmarking. Garvin in his paper has mentioned that benchmarking is a way to gain an outside perspective and another is customers. Taking regular feedbacks from customers increase learning in a way, as they are the experts in what they work. Customers provide latest product information and feedbacks about the services and the usage patterns. Garvin has given an example of Motorola Company where the members of the Operating and Policy Committee with the involvement of the top managements meet personally on regular basis with customers. The second example is at Worthington Steel where all the mechanical operators make periodic visits to customers factories to figure out what they want. Few times, customers are not able to access what are their needs and sometimes are not able to find what issues they were facing with a product or service. Its the duty of managers to observe them in action if that is the case. Xerox has employed various anthropologists at its Palo Alto Research Center whose job is to observe users of new document products in their offices. Software engineers use an interactive process named contextual inquiry which is used to observe users of new technologies as they go about their work. This is the role benchmarking plays in the learning process.
To measure the amount of knowledge learnt, nowadays organizations use learning curves and manufacturing progress functions. It was during 1920s and 1930s, when the costs of airframe manufacturing had declined with the increase in the cumulative volume. This increase was due to increase in manufacturing knowledge. They later started comparing total manufacturing costs and the impact of experience in other industries which included shipbuilding, oil refining and consumer electronics. It was then learnt that by doubling the cumulative production, the costs had fallen to 80% to 85% with some variations. Learning and experience curves are still used in aerospace, defense and electronics industries. Boeing has implemented learning curves in its plants which are helpful in determining productivity, work flow and staffing levels, and also in setting prices and profit margins on the new aircrafts. Semiconductor and consumer electronic industries use experience curves to forecast the costs and prices.
The companies to change into learning organizations, these measures seem to be vague and incomplete. This measure has a single measure of output which is either cost or price and they ignore the other aspects like quality, delivery or new products which were introduced. To respond to these concerns, halflife curves were introduced by Analog Devices which was a semiconductor manufacturing company. This curve compared all the internal improvement rates