This paper, published by the LMJ desrcribes the benefits on Benchmarking with comments from those who have used Lean Benchmarking sucessfully

1. How well are you
A
s turbulence in the economic and business
environments continues, organisations
Mark Knowlton is the director of across many industry sectors are faced
KPS Ltd., a specialist in providing with fierce competition, shrinking operational
support to companies undertaking budgets and reduced profit margins. The public
improvement programmes through sector too has been tasked to deliver greater
the deployment of lean principles, value for tax payers, with the governments
spending review in October 2010 stating that
and the founder of online business
departmental budgets will be cut by an average of
improvement tool LeanBenchmark™. 19 per cent over four years.
In this article, in which he reports
on the experience of several The pressure on leaders and their teams to find
organisations, he explains the more innovative ways to improve performance
importance of lean benchmarking continues - no surprises there, but how are the
more enlightened organisations facing up to this
and the great impact it can have on a
challenge? And, more importantly, where do they
company’s plan to achieve excellence. start from?
Benchmarking is widely recognised as a
systematic process for identifying and
implementing best practice, or in simple terms it
is about learning from the experiences of others.
Comparing performance with organisations
in either similar or dissimilar sectors enables
individuals and teams to develop improvement
plans and adapt specific best practices, usually
with the aim of increasing some aspects
of performance.
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2. H ow w e ll ar e y ou p e rformi n g ?
M ark K nowlton
Lean benchmark takes this tried and performance benchmarking and best
tested method and applies it to a Lean practice benchmarking.
Competencies framework covering
leadership, customers, empowerment, Performance benchmarking compares
communication, processes, plant, the performance level of a specific
equipment and supply chain. process to identify opportunities
for improvement.
Benchmarking may be a one-off event,
but is often treated as a continuous Best practice benchmarking, which is
process in which organisations considered the most powerful type of
continually seek to improve their benchmarking, is searching for the best way
practices. Many of us are regularly or solution by studying other organisations
benchmarking on an informal basis that are high performers in a particular
during normal day to day life. We do this area of interest (lean, for example).
unconsciously at work or at home where Benchmarking establishes the performance
we learn by comparing our behaviour and gap and opportunities for improvement.
practices with colleagues, peers, and
experts within our network. Improvement teams can compare
performance either by visiting an
Formal benchmarking takes a more exemplar organisation or through
structured approach. There are two online web based tools such as
main types of formal benchmarking: www.leanbenchmark.org
P
purpose
rinciples
Figure 1: Example of results compared to a specific sector and all sectors.
and
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3. Global Benchmarking
Origins of benchmarking A recent study conducted by the Global
Benchmarking Network highlighted
It has been around for over 20 years and
current and future trends for 20 popular
is recognised by experts and leading
business improvement tools. The
organisations all over the world as a vital
research covered 450 responses across
ingredient for sustainable, long term
44 countries.
business success.
Over 60 per cent of respondents stated
Xerox Corporation is credited with
that the main reason for benchmarking
originating the practice of benchmarking.
was to improve performance. Other
The chief executive, David Kerns, defined
drivers included the need to address
benchmarking as “the continuous
specific strategic challenges, improve
process of measuring products, services,
financial performance or to learn how
and practices against the toughest
other organisations have developed
competitors or those recognised as
new products or gained a shift in
industry leaders.” Robert Camp, the
organisational culture.
logistics engineer who initiated Xerox’s
benchmarking programme and who is
Interestingly, lean was one of the
generally regarded as the guru of the
improvement tools that was analysed
benchmarking movement, offered an even
within research study and, whilst
simpler definition. “Benchmarking,”
identified as “above average” for
says Camp, “is the search for
effectiveness, it was ranked within
industry best practices that lead to
the bottom five in terms of future
superior performance.”
adoption. Respondents considered
performance benchmarking, best
Camp developed a very structured
practice benchmarking and informal
and thorough 12-stage approach to
benchmarking as the most desirable
benchmarking which can be summarised
improvement tools for future adoption
as follows:
(you can access the full report at www.
globalbenchmarkingnetwork.org).
1. Select the subject of focus
2. Define the process Lean benchmarking in action
3. Identify potential partners Essentially, lean benchmarking provides
4. Identify data sources a ‘snapshot’ of current performance
5. Collect data and select partners compared to other organisations. The
6. Determine the gap resulting gap analysis clearly
7. Establish process differences highlights the future potential and
8. Target future performance the most appropriate focus for
9. Communicate improvements to increase performance
10. Adjust goal and operational productivity.
11. Implement
12. Review and recalibrate. Philipp Schuell, a lean specialist at Trumpf
GmBH, used lean benchmarking at SPI
lasers, a UK company the group acquired
in 2008, and claimed it highlighted a
number of benefits to their organisation.
He says: “The benchmarking exercise gave
us independent feedback on the status of
our lean implementation, it also allowed
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4. H ow w e ll ar e y ou p e rformi n g ?
M ark K nowlton
us to compare and highlight strengths and
weaknesses with others in the lean community
and analyse our current status.” Schuell went
on to describe what was learned from the lean
benchmark report: “The gap analysis offered
useful suggestions for improvement projects.
The assessment also focused on cultural and
organisational transformation rather than just
the individual uses of lean tools.”
Ailsa Kaye, managing director at Onsite
Insights, which has been delivering best
practice visit programmes for over 10
years, says: “Benchmarking and sharing best
practices between companies has proven
highly successful in improving productivity
and performance. An independent survey
undertaken by the DTI on Inside UK Enterprise
showed that each year the visit programme
delivered £135m in improved productivity.”
Genzyme, one of the world’s leading
biotechnology companies, used lean
benchmarking at its UK facility as part of
its lean transformation programme. Lesley
Coombes, lean transformation manager,
explains: “The benchmarking process has
enabled us to consider how well we are doing
and where we need to focus next. It wasn’t just
about seeing how well our score compared
Lean benchmarking
P
provides a ‘snapshot’ of
current performance
compared to other
organisations
purpose
rinciples
and
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5. to others (although obviously this was
very interesting). The recommendations
within the report meant we could
identify what we needed to do next. We
have now started to build our lean road
map with lean objectives linked directly
to the business’ goals.”
Whilst lean has its origins within the
manufacturing industry, it is now being
applied successfully across many service-
based sectors including healthcare.
Progressive NHS hospital trusts have
lean transformation programmes
covering clinical activity, support
functions and back office administration.
Dr. John Coleman, director of
Alturos Ltd, a specialist in providing
support to companies going through
transformational change, has used lean
benchmarking as part of the framework
with which the company develops lean
projects with clients. Dr. Coleman notes
that there are two, immediate benefits
of lean benchmarking: the first is the
strategic view of ‘where to start in lean’
(in this sense a benchmark helps the
senior management team assess the
organisation’s readiness and highlights
key areas for development, particularly
the vital areas such as leadership and
organisational culture for lean 5), the
second is represented by operational
and tactical views. A lean benchmark will
help operational staff create specific
measures for Plan-Do-Study-Act cycles,
and so gauge the degree of success of
improvement projects. In particular,
Alturos often applies benchmarking
during its initial Change Agent training
programme with clients. Dr. Coleman
concludes: “It is important to understand
the different perspectives people have
as to where the organisation is on its
lean journey. This helps us adapt our
approach accordingly. We encourage
teams to develop their views until they
have reached conclusions, based on data
such as benchmark results and having
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6. H ow w e ll ar e y ou p e rformi n g ?
M ark K nowlton
understood how well lean principles are recognise that every organisation has its
embedded across the organisation.” own unique set of cultural and operational
challenges. Whilst lean benchmarking is
Susan Whitaker, who heads up a lean not the panacea for achieving world class
improvement programme for the Bedford performance it can be an effective approach
Hospital NHS trust, describes how lean to kick-start a new lean programme,
benchmarking has contributed to their lean reinvigorate a stalled lean journey or inspire
transformation programme: “When starting well motivated improvement teams to strive
on a lean journey it is difficult to know for even greater performance.
how far you have come as an organisation,
especially in terms of measuring the impact
of lean on the organisational culture, the
mind-set and empowerment of staff. A
A FREE Advanced
few successful projects do not necessarily LeanBenchmark™ account
mean that lean is embedded throughout and personalised benchmark
the organisation - it may be that we are report valued at £99 is being
successfully delivering results on projects
but in reality we are only tinkering around
offered to the first five LMJ
the edges with a selected few. Lean readers to apply.
benchmarking provides a useful tool for
monitoring how far you have travelled on Email info@leanbenchmark.org
your lean journey. It provides a snapshot
at a given moment in time and helps to
for a unique online
identify gaps, open up dialogue and refocus voucher code.
on your organisation’s lean or change
management strategy and priorities. It is
also useful to compare your organisation
with others - not that it’s a competition!” For further information about either
individual company of multi site
Those of us who have been involved in benchmarking contact
lean transformation for a number of years mark@knowlton.org.uk E N D P
References for further reading
Robert C. Camp, Benchmarking: The Search for Industry Best Practice that Lead to
Superior Performance (Milwaukee, WI; Quality Press, 1989).
Various authors, Global Survey on Business Improvement and Benchmarking (Global
purpose
Benchmarking Network, www.globalbenchmarkingnetwork.org).
rinciples
Mark Knowlton, J. R. Coleman, T.W. Franklin and others, A Mountain Top View of
Lean (Conference Paper presented at the 5th Annual International Benchmarking
Conference in December 2010 in Kuwait).
and
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