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| What is Benchmarking? |
| Benchmarking is a powerful method for breakthrough thinking, innovation, improvement and for delivering improved bottom-line results. Benchmarking is “comparing the performance levels of organisations for a specific process or activity and capturing, analysing, and implementing best practices”. |
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| Benefits of Benchmarking |
| There are many case studies focusing on the success gained through benchmarking. The best known of these are the experiences at Xerox and Chrysler. In the late 70’s and early 80’s where, faced with ruin due to more efficient Japanese competitors, benchmarking turned the giant Xerox organisation around and put it back at the top of the market. At Chrysler Corporation the benchmarking of Japanese new product development techniques prior to the development of the Viper sports car is credited with saving three billion dollars from development costs and one year of development time. |
| One study of Fortune 500 companies, found some compelling figures relating to first year payback from benchmarking projects. Within organisations of 'average' benchmarking experience an average of $76 million payback was reported by more than 30 of these companies for their most successful benchmarking project, and from 'more experienced' organisations this figure was a staggering $189.4 million. Even among developing organisations this study found average first year payback levels at $370,000. |
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| “TRADE” BENCHMARKING FOR EXCELLENCE METHODOLOGY |
| The TRADE benchmarking methodology is focused on the exchange (or “trade”) of information and best practices to improve the performance of processes, goods and services. |
| TRADE is a five stage benchmarking methodology: |
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T erms of Reference (plan the project) |
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R esearch (research current state) |
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A ct (undertake data collection & analysis) |
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D eploy (communicate & implement best practices) |
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E valuate (evaluate the benchmarking process & outcomes) |
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| The TRADE methodology offers these advantages: |
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It offers a proven approach. It is endorsed by the Global Benchmarking Network and has been used by private and public sector organisations of all sizes (for example, it is the approved methodology for Singapore’s Public Service and is actively promoted and used in countries such as NZ, Taiwan, the UAE, and the UK). |
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It is flexible and can be used for exploratory (1-12 week) or in-depth (13-36 week) projects. |
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It is easy to explain and communicate, as it only consists of 5 stages and has a memorable name! |
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It provides a step-by-step approach. Within the 5 stages, there are simple steps to be followed. |
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It provides a rigorous approach to planning, which ensures that the project will only proceed after a cost /benefit analysis has been undertaken. |
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There is a strong likelihood of success, as projects are supported through a TRADE project management spreadsheet, a TRADE training manual (consisting of a comprehensive set of benchmarking resources and template forms), and a benchmarking certification scheme. |
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It saves time and money. Fifteen years’ of benchmarking experience, working with hundreds of organisations, has been invested into the development and refinement of TRADE materials and template forms. TRADE licence holders will have full access to these (and future updates), and so will not need to develop their own materials at considerable expense. |
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It delivers results. After each stage of TRADE, the project is reviewed to ensure it is on-track. If it is not on-track, the project can be stopped or the direction of the project changed. Therefore, all projects should deliver the expected results and major benefits (potentially saving or generating millions of dollars for large projects). |
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