"Best management practices refer to the processes, practices, and systems identified in public and private organizations that are performed exceptionally well and are widely recognized as improving an organization's performance and efficiency in specific areas." (General Accounting Office, 1995)
Input to Step 3: The input to Step 3 is the output from Step 2.
There are numerous resources available to help identify who is the best at a particular process. Many sources are free and within the public domain. The problem is not so much finding the sources, as quantifying and qualifying them to limit the scope to those most useful to your particular benchmarking effort. Some sources of primary and secondary information are: The American Productivity and Quality Center lists 12 basic information sources for benchmarking. Also check recent winners and finalists for the Malcolm Baldrige National Quality Award, the President's Quality Award, and the Best Manufacturing Practices Center of Excellence Award. The DON Best Manufacturing Practices (BMP) is an excellent resource for locating best practices from industry, government, and academia. See the Supporting Materials section, Part A for a more detailed description of its Center for Excellence.
There are many government and private World Wide Web sites available to assist any search. Many provide resources, information, and even software to find best practices, perform a benchmarking study, or tie your benchmarking effort to your strategic plan and performance measures. Here are some that are frequently used for benchmarking and best practices studies:
Industry leaders can be identified a number of ways. In 1995, The Quality Network, Inc. published a list of world-class organizations in specific process areas, which included:
Prepare a list of companies/organizations to possibly benchmark. Ideally, your list of potential partners will have between 5-15 entries. Those companies of special interest to ESC, QMB, or BMK Team members can be used; however, ensure that most potential partners come from your primary and secondary research.
After the research is completed, the possible number of partners needs to be narrowed. Investigate, and possibly contact, some potential partners to find out more about their suitability and interest in your effort. In Step 4, each benchmarking partner will be interviewed in more depth via mail, phone, other media, or in person.
The ranking process should be performed with blind company names. This means instead of calling a company or organization by its name (Xerox, Hughes, Bell Atlantic, etc.), use an anonymous heading (Company A, Company B, Company C, etc.). In this way, the final selection will be based solely on the data collected about each potential partner's best practices.
An example of 16 companies ranked in a benchmarking study by the Hughes Aircraft Company is included in the Supporting Materials section of this handbook, Part E. The highest scores represent the most desirable partners and are underlined. Recommendations are also noted at the bottom of each column to identify which companies rate a site visit, a phone call, a thank you letter, etc.
A less sophisticated matrix that could be used to evaluate the criteria for ranking partners follows.
Sample ranking matrix. Rank companies A through F with points from 1 (for the best) to 6 (for the worst) in each criteria. The lower the total number of points assigned, the better the company ranks.
After you have established your selection criteria and categorized the potential partners into those that are of high, medium, and low interest, identify one single benchmarking partner that is the best-in-class, or select a limited number of partners (usually 1 to 5) that posses significant improvements. Selecting the partner(s) to benchmark against is a critical decision. It establishes the level of success you hope to achieve in this benchmarking process. Here, you are setting the standard for comparison. The BMK Team should get approval from at least the QMB level for the final partner(s).
Because benchmarking requires openness and trust, there are specific principles used to guide the conduct and ethical behavior of all partners. Organizations such as the International Benchmarking Clearinghouse, KPMG Peat Marwick, the Strategic Planning Institute's Council, and Texas Instruments have identified their own principles, many of which are similar or overlap the Benchmarking Code of Conduct. Here is a summary of what the principles cover:
Of course, the common sense rules of good business manners also apply. Be realistic and considerate when scheduling an interview or a site visit. Don't waste your partner's time. Limit the size of your team and the number of contacts you make. Respect proprietary information and Don't misrepresent any part of the study.
Refer to the detailed principles of the Benchmarking Code of Conduct in the Supporting Materials section of the handbook, Part B. Using this is the mark of a true professional in benchmarking and will help establish credibility with potential partners. As world-class organizations, they will be quite familiar with the Code. We strongly encourage all DON organizations involved in a benchmarking study to learn and abide by every principle in the Code.
Output from Step 3: The output from Step 3 is the input for Step 4.
Quality Advisor's Checklist
Before moving to the next step, the Quality Advisor should review the following checklist:
Source: USN Benchmarking Handbook
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