Benchmarking and Its Types

What is a Benchmark?

A benchmark is a point of reference against which things are measured.

• Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice.Benchmarking is a systematic method by which organizations can measure themselves against the best industry practice.

• Benchmarking is the process of measuring an organization's internal processes then identifying, understanding, and adapting outstanding practices from other organizations considered to be best-in-class.

Most business processes are common throughout industries. For example; NASA has the same basic Human Resources requirements for hiring and developing employees as does American Express. British Telecom has the same Customer Satisfaction Survey process as Brooklyn Union Gas. These processes, albeit from different industries, are all common and can be benchmarked very effectively. It's called "getting out of the box".

 Levels of Benchmarking

•  Internal Benchmarking
• Competitive Benchmarking
• Non – Competitive Benchmarking
• World – Class Benchmarking

Types of Benchmarking 

• Process benchmarking: billing, order etc
• Performance benchmarking : features, quality
• Product benchmarking: dimensions
• Strategic benchmarking competitive adv

Ishikawa Diagrams or Cause & Effect Diagrams

Ishikawa Diagrams Definition

Ishikawa diagrams (also called fishbone diagrams, cause-and-effect diagrams orFishikawa) are diagrams that show the causes of a certain event -- created by Kaoru Ishikawa (1990). Common uses of the Ishikawa diagram are product design and quality defect prevention, to identify potential factors causing an overall effect. Each cause or reason for imperfection is a source of variation. Causes are usually grouped into major categories to identify these sources of variation. The categories typically include:

• People: Anyone involved with the process
• Methods: How the process is performed and the specific requirements for doing it, such as policies, procedures, rules, regulations and laws
• Machines: Any equipment, computers, tools etc. required to accomplish the job
• Materials: Raw materials, parts, pens, paper, etc. used to produce the final product
• Measurements: Data generated from the process that are used to evaluate its quality
• Environment: The conditions, such as location, time, temperature, and culture in which the process operates

Fig:-Fishbone Diagram

Cause & Effect Diagrams Definition

•  The Cause & Effect (CE) diagram, also sometimes called the ‘fishbone’ diagram, is a tool for discovering all the possible causes for a particular effect. The effect being examined is normally some troublesome aspect of product or service quality, such as ‘a machined part not to specification’, ‘delivery times varying too widely’, ‘excessive number of bugs in software under development’, and so on, but the effect may also relate to internal processes such as ‘high rate of team failures’.

• The major purpose of the CE Diagram is to act as a first step in problem solving by generating a comprehensive list of possible causes. It can lead to immediate identification of major causes and point to the potential remedial actions or, failing this, it may indicate the best potential areas for further exploration and analysis. At a minimum, preparing a CE Diagram will lead to greater understanding of the problem.

• The CE Diagram was invented by Professor Kaoru Ishikawa of Tokyo University, a highly regarded Japanese expert in quality management. He first used it in 1943 to help explain to a group of engineers at Kawasaki Steel Works how a complex set of factors could be related to help understand a problem. CE Diagrams have since become a standard tool of analysis in Japan and in the West in conjunction with other analytical and problem-solving tools and techniques.CE Diagrams are also often called Ishikawa Diagrams, after their inventor, or Fishbone Diagrams because the diagram itself can look like the skeleton of a fish.

Fig:-Cause and Effect Diagram

Run Charts

Run Charts Definition

• A run chart is a line graph of data plotted over time. By collecting and charting data over time, you can find trends or patterns in the process. Because they do not use control limits, run charts cannot tell you if a process is stable. However, they can show you how the process is running. The run chart can be a valuable tool at the beginning of a project, as it reveals important information about a process before you have collected enough data to create reliable control limits.

Fig:-Run Charts

• Run charts (often known as line graphs outside the quality management field) display process performance over time. Upward and downward trends, cycles, and large aberrations may be spotted and investigated further. In a run chart, events, shown on the y axis, are graphed against a time period on the x axis. For example, a run chart in a hospital might plot the number of patient transfer delays against the time of day or day of the week. The results might show that there are more delays at noon than at 3 p.m. Investigating this phenomenon could unearth potential for improvement. Run charts can also be used to track improvements that have been put into place, checking to determine their success. Also, an average line can be added to a run chart to clarify movement of the data away from the average.

Alternatives with run charts:

1. An average line, representing the average of all the y values recorded, can easily be added to a run chart to clarify movement of the data away from the average. An average line runs parallel to the x axis.
2. Several variables may be tracked on a single chart, with each variable having its own line. The chart is then called a multiple run chart.
3. Run charts can also be used to track improvements that have been put into place, checking their success.