(Written by : N.R. Jayaraman)
There are no standard bench marking procedures or parameters meant for the industries. However the bench marking is done by the firms themselves to improve their working by comparing their activities with other units whose efficiency in several factors are considered as the best practice followed in their industry.
Benchmarking in the simplest term is the continuous process of comparing the business standards, processes and other in house activities with similar units to cause improvements wherever they find their activities lack in performance. It does not mean that a small industry may compare their activities with huge organization and draw conclusion. There are two basic issues involved. To compare the process flow for a specific product and secondly the quality of the same product produced.
Factors typically measured are quality of the end product produced, processing aspects, time and ultimate cost of the product with profit margin. In the process of best practice of benchmarking, the management identifies the best firms in their industry or in any other industry where similar processes exist, and then compare the working and processes with their own process activities. In this manner they learn the targets and the processes that explain why those firms with whom comparison is made are successful than the one under scrutiny.
What for the Bench marking is done? Not everyone does it. It is undertaken only by those units which desire to progress and be in the competition producing better product with competitive pricing. By benchmarking, each organization improve their performance in supply and sales.
Industry benchmarks can help one to:
(1) Compare the standards laid down for the production of a particular product.
Compare how the unit is performing against similar other units. How further improvement can be brought towards efficient working to enhance their production. One may note that the performance of a detergent manufacturing industry cannot however be compared to the spare part manufacturing unit of automobile industry to improve their efficiency.
(2) Assist to plan their activities for future expansion
(3) Work out strategy to review the practices and to amend working procedures to improve their process.
The general factors that determine the best working relates to the procedures followed by the most successful industry some of which are :
(1) Proper budgeting and accounting procedures to run the unit
(2) Planning the schedules much in advance and monitoring the results.
(3) Trimming the processes and procedures to be more responsive to customer demand and focus on superior customer service.
(4) Year by year reduction in expenditures and increase in efficiency by bringing continuous improvements in the working
(5) Modeling and optimization through development, integration and implementation to usage.
(6) The cost effectiveness in production by identifying the overlapping and repetitive exercises to cut down the expenditure to reduce the product cost
(7) Minimizing the manual work with mechanization and contracting in the areas possible.
(8) Integrating multiple locations together via a flexible Web interface for faster exchange of commands thereby reducing cycle times of the decisions from a couple of days to hours.
(9) Constant process measurement and report generation by a group to take corrective action on time.
(10) Standardizing and simplifying the work procedures
(11) Stream lining the Procurement procedures that reduce the cost
(12) Standardizing the products purchased.
(13) Spare parts management which reduces the cost
(14) Stricter Quality control measures that prevents wasteful inputs and rejections thereby reducing the cost
(15) Greater operational efficiency like deployment of minimum best workers and getting maximum outputs.
(16) Enhancing the efficiency of the workers by motivation and in-house trainings
(17) Remodeling the procedures to follow the best procedures noticed wherever it is possible to reduce wastage of time
(18) Safety measures including adhesion to the internationally accepted norms in environment safeguards by controlled discharge of wastes and effluents