Pm301 Total Quality Management : Assessment Answers
Answer:
Introduction:
Benchmarking is a way of evaluating what is the best performance being achieved by a certain company or competitor in the market and then implement it as core working strategies of a company. This evaluation process could be used to identify the pertaining gaps in an organization and resolve them to attain a great competitive advantage over the rivals in the market. This process is used by almost all the companies in myriads of industries so as to gauge their success and pinpoint the shortcomings. When the company’s officials begin to compare the firm’s performances and processes with the industry’s best practices from other companies, then it becomes easy to unveil the loopholes and adopt better strategies for enhancing success rates (Government, 2012).
The following report has been precisely written to evaluate the actual need of Benchmarking in an organization and what sort of problems a company can face in the absence of Benchmarking practices. The report also discusses the crucial steps that are to be taken while implementing the prevailing Benchmarking practices in a company. As this process is tedious hence the challenges associated with the implementation process will also be discussed. In the final section of the reports, a number of recommendations would be suggested so as to mitigate the risks associated with the Benchmarking process (Knipe, 2002).
Reasons for the need of Benchmarking
Benchmarking is not just concerned with making inquiries to other companies but it also requires a firm to adopt these strategies in their core business practices. There are numerous reasons for which a firm could adopt Benchmarking practices. Some of them are described below: -
- Evaluation of performance and comparing it with the competitors: The benchmarking elements give a chance to the firm to compare its core practices with the best services and practices available in the markets and then adopt the ones that are feasible (Stroud, 2017). This eventually increases the customer base alongwith increasing the profit rates.
- Comparison of performance of product lines and business units: Benchmarking helps a company to compare its current performance of product lines and business units with the best services present in the market. The prime motive is to serve the customers with newer experiences each time they purchase any product or service (Schlect, 2010).
- Development of standardized set of performances: The leaders in the market set standards of performances for the ones who are new to the markets. The fresher companies observe these ongoing trends and then develop its core strategies to match the quality of services of the leaders.
- Prevention of companies’ business monopoly: As the developing firms grow while observing the leading players in the market, hence a business monopoly is avoided as a number of companies begin to offer similar services with improved qualities. A customer does not to rely on a single firm to satiate its needs (Rothberg, 2013).
- Setting up real objectives and goals to achieve: The Benchmarking procedure allows a firm to develop real objectives and goals instead of the vague ones. These objectives are created while analyzing the available resources of the company and even fixed deadlines are decided for the same. The goals are candid and the employees are encouraged to achieve them in the given timeframe (Broderick, 2010).
- Lowering labor costs: The developing companies could observe the labor automation practices in large enterprises and adopt them through benchmarking practices in their own core business strategies. This not only lowers the labor costs but also allows the company to execute the tasks at rapid rates.
- Increasing sales and profits: It is believed that the companies often incorporate benchmarking practices to improve the functions, operations, products and services. This eventually increases the sales and profits for the firm. Companies that operate on benchmarking practices can drastically lower their expenses and such savings could lead to great profits (Scott, 2011).
- Improvement of the product quality: This is the prime reason for which a leading firm adopts benchmarking practices. A firm usually observes the products and practices of strong competitors in the market and subsequent improvement are made in the firm’s own product lines. While improving the quality, the manufacturers also try to align the product specifications parallel to the changing perceptions of the customers.
Steps to implement Benchmarking practices
The prime aim of a successful leader is not restricted to learn about the crucial elements of Benchmarking rather it is simultaneously required that they must develop specific, organized approach to implement the precise practices of Benchmarking in alignment to the existing core working strategies of the company. Following are the steps that a firm could adopt to keep on track in its benchmarking endeavors:
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Steps |
Description |
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1. Determination of the process to be benchmarked |
It is the cornerstone of the entire benchmarking process and any incorrect identification at this stage leads to wastage of resources at the later stages.
This stage evaluates the pivotal areas where benchmarking is required according to the nature of the organization.
The process is selected by evaluating the available resources of the company and the strengths and opportunities of the company (Berk, 2001). |
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2. Determination of the organizations to be benchmarked |
This step determines the organizations whose best practices are to be adopted. An incorrect choice at this step may lead to electing partners that are not true bench markers, are uncooperative and whose practices are irrelevant to the needs of the company. A good source to look for successful organizations is the annual reports of the organizations or the articles and journals on the best practices of the leading firm. |
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3. Gathering the relevant data |
This step involves creating plan for collecting data from myriads of sources or by simply conducting site visits to the bench markers (Burke, 1995).
The correct implementation of this step ensures collection of such sets of data that can be employed directly to enhance the performance of the organization.
Incorrect implementation of this step may result in collection of irrelevant or inadequate data that is incapable of yielding the precise results for the company.
The data could be collected at the primary level by simply conducting surveys and interviews or at the secondary level by evaluating the research works of the scholars. |
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4. Gap analysis |
This step analyzes the collected data and discovers the areas where the company lags in comparison to the best practices of the successful organizations.
If correctly implemented, then this step sets the clear picture of the process to be followed in order to match with best practices in an industry (Kelessidis, 2000).
On contrary, the incorrect implementation may lead to vague and invalid collection of information that would ultimately of no use for the firm. |
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5.Determination of the future trends |
This step is adopted to examine the firm’s past performance in comparison to the existing competitors.
Also at this step the company effectively forecasts potential changes in the respective industry and then project the future performance of the company on adoption of the benchmarking practices.
This step unveils the other available options in the market and also evaluates the realistic conception of potential benefits of adopting the potential benefits.
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6. Revealing the results and selling the process |
This step involves a proper communication of the results of benchmarking to the significant audiences in the company and motivate them to carry out the require changes for the implementation of the selected benchmarking practices.
This step allows the audiences to understand actual purpose behind the benchmarking process and readily gather resources required for the process (Provost, 2011).
Any sort of incorrect implementation of this step leads to confusion and mismanagement among the employees and the mangers and hence reduces the capacity of each of them to carry out the change process. |
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7. Achievement of consensus on the revised goals |
This step creates an entirely new set of goals for the firm after the implementation of the benchmarking practices.
This step is taken to reduce the performance gap between the leading and following companies.
The correct implementation of this step ensures creation of realistic and unambiguous new standards for the involved process and incorrect implementation yields poorly understood and unrealistic standards. |
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8. Establishment of the Action Plans |
This step establishes the step by step plan to implement the benchmarking practices and even revise the goals for the company in accordance to the new benchmarking principles (Ireland, 2008).
If this step is incorrectly implemented then it would definitely result in vague procedures and in the long term would be rejected by the management
The inappropriate implementation of this step could also prove unworkable if approved. |
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9. Implementation of the plans and monitoring results |
In this step all the approved best practices are implemented and the managers monitor it on periodic basis to search for the loopholes.
If this step is effectively executed then the executives are benefitted as they could closely watch the ongoing process.
The incorrect implementation of this step could result inaccurate measurements which further lead to poor control of the process. |
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10. Recalibration of the benchmarks |
This step encourages the organization to continuously evaluate the established benchmarking practices and implement changes and transformations wherever necessary.
The effective implementation of this step allows the executives to improve the practices and align them with the ongoing transformations in the market (Knipe, 2002).
The inappropriate implementation of this step fosters an illusion that such benchmarking practices are permanent and the executives need not to change them after implementing it once. |
Challenges associated with Implementation
Organizations all over the world have recognized the value of comparing themselves to other capable organizations. This process of benchmarking yields a number of valuable information about the processes and services within an organization that needs continuous improvements. However, there are a number of challenges associated with the implementation process and some of the peculiar ones are listed below:
- The organizations often fail to analyze its internal practices and processes prior to comparing it with the best practices of the other leading firms in the markets. The self evaluation process may unveil a number of surprising and useful information for the company. Also, when a company fails to recognize its own internal strengths and weaknesses then it unfortunately ends up in directing the firm’s useful resources in unplanned manner (Salem, 2013).
- A company implements a certain practice on the basis of its potential and requirements. In benchmarking the other weak companies simply copies the best practices of the other leading firms without analyzing its own resources and potential. In such a case either the firm fails to continue with the practices or simply incorporate all its resources to successfully launch the practices (Littlefield, 2012).
- The management of time is quite crucial for benchmarking practices. If not managed well then these practices could be quite time consuming. A company can spend a lot of time in being like other successful organization and in this process it may fail to achieve its own set of objectives. The goals and deadlines makes the implementation process a bit tiresome due to which some employees feel reluctant in becoming a part of this benchmarking process.
- The employees, customers and the other stakeholders sometimes may not readily accept the change that should result from the benchmarking process (Nayab, 2010). Changes are thought as threat by some of the stakeholders as its results are not defined and sometimes risky. Due to this the benchmarking practices could not be effectively implemented in the organization and not even the feedbacks could be gathered over the process.
- The data gathering step in the implementation process is also a risky one as a number of company’s resources is to be implemented in the process. As the company employs its resources so a number of risks are associated with it. The company needs to hire a number of experts to deal with the change process and this entire process requires enormous financial input.
Recommendations for mitigation of risks
The above risks have to be mitigated timely in order to implement the benchmarking practices in an improved manner. There are a large number of recommendations that could be suggested and the most common among them are:
- Before comparing the firm’s activities with the best activities of the leading companies in any industry, an organization should evaluate its core business practices and only reform those areas where the actual change is requires. This will not only save the time and resources of a company but also help it in analyzing its strengths and possible opportunities in future (Camargo & Portella, 2007).
- The company is also advised to form a team in order to monitor the ongoing implementation of the benchmarking practices. The monitoring process allows the executives to observe the entire process closely so as to point out the loopholes at the time of their occurrence. The documentation process could also accompany this so as to keep a record of ongoing activities in the implementation plan alongwith the resources been employed (Society, 2015).
- The benefits of the benchmarking practices should be effectively communicated among different stakeholders so that they know where their talents, skills and time are being implemented. When the employees and customers are involved in various activities of the process then they feel attached to the company and are retained for a longer duration.
- In order to gather precise set of data, the company could set a team for this purpose. This team would analyze the data as soon as it is gathered and will inform the managers that which specific data is required for the next step of the implementation process (Puri, 2010).
Conclusion:
Benchmarking is a pivotal function for a company as it forms a strong backbone for the firms that are capable of installing the best practices in its core working strategies. An emerging firm preaches those practices that are firmly followed by the leaders in the markets. The best practices of leading companies create high standards for the emerging companies to follow. The benchmarking practices are to be learnt and implemented in an effective manner to yield the desired results. To improve the performance of a firm, the managers are required to evaluate the associated risks of the entire implementation process of the selected benchmarking practices. The company could gather human resources to meet the challenges and combat the related risks. To successfully implement the benchmarking practices, the executives could easily convey the prime benefits and the potential results of the entire process to all the stakeholders involved.
References:
Berk, J., 2001. The Six Benchmarking Steps You Need, Available at: https://www.workforce.com/2001/03/11/the-six-benchmarking-steps-you-need/
Broderick, 2010. Benchmarking - CIPS Procurement Topic: CIPS, Available at: https://www.cips.org/documents/knowledge/procurement-topics-and-skills/11-continuous-improvement/benchmarking/benchmarking.pdf
Burke, C., 1995. 10 Steps to Best-Practices Benchmarking, Available at: https://www.qualitydigest.com/feb/bench.html
Camargo, A. & Portella, E., 2007. Best practice benchmarking: risk management and clinical governance reorganisation policies in the hospital setting, Available at: https://www.msc.es/organizacion/sns/planCalidadSNS/docs/SummaryBestPracticeBenchmarking.pdf
Government, A., 2012. Benchmarking: Learning from Others’ Success, Available at: https://www.stat.auckland.ac.nz/~mullins/quality/Benchmark.pdf
Ireland, F., 2008. Process Benchmarking: A guide to help you adopt a more structured approach to Process Benchmarking in your business, Available at: https://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/2_Develop_Your_Business/1_StartGrow_Your_Business/Process-Benchmarking-Guide.pdf
Kelessidis, V., 2000. Benchmarking: dissemination of innovation management and knowledge techniques, Available at: https://www.adi.pt/docs/innoregio_benchmarking-en.pdf
Knipe, A., 2002. Benchmarking for competitive advantage – striving for world class project management practices, Available at: https://c.ymcdn.com/sites/www.projectmanagement.org.za/resource/resmgr/conference_proceedings_2002/11.pdf
Littlefield, M., 2012. Top 3 Challenges in Benchmarking Research for Industrial Operations, Available at: https://blog.lnsresearch.com/bid/118628/Top-3-Challenges-in-Benchmarking-Research-for-Industrial-Operations
Nayab, N., 2010. Pros and Cons of Benchmarking, Available at: https://www.brighthub.com/office/entrepreneurs/articles/82292.aspx
Provost, 2011. Benchmarking Procedure, Available at: https://www.utas.edu.au/__data/assets/pdf_file/0020/214553/Draft-Benchmarking-Proc.pdf
Puri, S., 2010. Recommendations for Performance Benchmarking, Available at: https://hosteddocs.ittoolbox.com/sp101907.pdf
Rothberg, A., 2013. What is Benchmarking — and Why Is It Important?: CFO Edge, LLC 1-2, Available at: https://www.cfoedge.com/resources/articles/cfo-edge-benchmarking-and-why-its-important.pdf
Salem, M., 2013. A Review of Benchmarking Implementation Problems: The Case of UAE Industrial Companies. The Journal of International Management Studies, August, 8(2), pp. 134-153.
Schlect, D., 2010. Benchmarking energy performance, Available at: https://www.aeecenter.org/files/newsletters/ESMS/Spring2010/benchmarking.pdf
Scott, R., 2011. Benchmarking: A Literature Review: ECU, Available at: https://intranet.ecu.edu.au/__data/assets/pdf_file/0010/357193/Benchmarking-Literature-Review.pdf
Society, G. C., 2015. Achieving Migration and Development Goals: Movement together on global solutions and local action, Available at: https://ngomigration.files.wordpress.com/2016/01/2015-gfmd-csd-recommendations-booklet-final-1.pdf
Stroud, J., 2017. Understanding the Purpose and Use of Benchmarking, Available at: https://www.isixsigma.com/methodology/benchmarking/understanding-purpose-and-use-benchmarking/
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