1. UNIT-4
Bench marking. Need, Advantages, Limitations, Levels
and Types of Benchmarking and process of
benchmarking . Quality Function Deployment.
Definition, Benefits and Process of QFD. Failure
Mode and Effect Analysis. Explanation Examples and
Steps in FMEA. ISO 900, ISO 14000 .

2. Benchmarking
Benchmarking is defined as” measuring our
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 our own company ‘s
targets, strategies and implementation.”

3. Evolution of Benchmarking
Benchmarking is not a new concept. The practice of
benchmarking can be seen in early 1800s when a New
England industrialist, Francis Lowell travelled to
England to study manufacturing at the best British
factories.

4. Reasons for Benchmarking
 To develop strengths and reduce weakness
 To achieve business and competitive objectives.
 It is a powerful and effective tool when used for right
reasons.

5. Advantages of bench marking
 It promotes a thorough understanding of the
company’s own process.
 It involves adaption of the practices of superior
competitions.
 It helps in identifying non value added activities.
 It enables comparison of performance measures in
different dimensions.
 It focuses on performance measures and not on
products.
 It helps organizations to set realistic goals

6.  It allows organization to define specific gaps in
performance.
 It provides a basis for training human resources.

7. Limitations
 Best in class performance is a moving target.
 Benchmarking is not a panacea
 It is not instant

8. Why benchmarking fails?
 If employees fail to get involved
 If process improvement is not related to competitive
positioning
 Gathering data before clearly understanding the firm’s
process.
 If assumed benchmarking as just one time process
 If the scope of companies studied is narrow.
 If the set goals do not bridge the gap between what is
and what can be
 If they do not empower employees to achieve
improvements
 If benchmarking is not perceived to process
improvement.

9. Levels of Benchmarking
 Internal benchmarking
 Competitive benchmarking
 Non-competitive benchmarking
-related process in the industry with a firm
-a related process in a different industry
-an unrelated process in a different industry
 World-class benchmarking

10. Types of benchmarking
1. Performance benchmarking or operational
benchmarking.
2. Process benchmarking or functional benchmarking.
3. Strategic benchmarking.

11. Key Success Factor Matrix
Competitive Analysis- Industry- Segment
Performance Rating
KSF Weight Our co. Competitor Comp B Comp C
A
Sales force
Distribution
Suppliers
R &D
Service
Cost
structure

12. Areas to benchmark
1. Customer service levels
2. Inventory management
3. Inventory control
4. Purchasing
5. Billing and collection
6. Purchasing practices
7. Quality process
8. Warehousing and distribution
9. transportation

13. Guidelines to benchmarking
 Do not go on a fishing expedition
 Use company people
 Exchange information
 Legal concerns
 Confidentiality

14. Four Phases of Benchmarking
 Planning
 Analysis
 Integration
 Action