21-01-2013, 03:53 PM
Re engineering and Benchmarking
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Benchmarking
Measuring the performance against that of best in class companies, determining how the best in class achieve those performance levels and using the information as a basis for the company’s targets, strategies and implementation
Search of industry best practices that lead to superior performance
Benchmark is a point of reference against which things are measured
Evolution
In early 1800’s Francis Lowell from England
Henry Ford created assembly line
Toyota Just in time
Modern benchmarking was initiated by Xerox
It studied its competitors and discovered that:
Their unit manufacturing cost equalled the japanese selling price in the US
The number of production suppliers was nine times that of the best companies
Assembly line rejects were 10 times higher
Product lead times were twice as long
Defects per hundred machines were seven times higher
Results of Benchmarking:
Suppliers were reduced from 5000 to 300
Concurrent engineering was practiced
Commonality of parts increased from about 20% to 60-70%
Hierarchical organization structure was reduced and the use of cross functional teams were established
Advantages
It promotes a through understanding of company’s own process
It involves adaptation and limitation of practices of superior practices
Identifies non value added activities and plans for improvement
It enables comparison of performance measures in different dimensions
It focusses on performance measures and processes and not on products
It helps organizations to set realistic, new performance targets
It helps to define specific gaps in performance
Re-engineering
The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed
It does not revamp the existing process
It is focused on breakthrough improvement to dramatically improve the quality and speed of work and to reduce its cost by fundamentally changing the processes by which work gets done