Guidebook on

for Best Practices

Benchmarking

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Malaysia Productivity Corporation ( MPC), Lorong Produktiviti, Off Jalan Sultan, 46200 Petaling Jaya, Selangor Darul Ehsan. Malaysia Tel : 603 - 7955 7266 | Fax : 603 - 7957 8068 e-mail : marketing@mpc.gov.my www.mpc.gov.my

Copyright2013 by MPC: Malaysia Productivity Corporation, Malaysia May not be reproduced without written permission from MPC. For further information, please contact the Malaysia Productivity Corporation (MPC) at:

All rights reserved. No part of this publication may be transmitted in any form or by any means, including photocopying and recording, or bay any information storage and retrieval system. Nor may any part of this publication be included as a reference in any other work without authorization.

1.0 An Overview of Benchmarking

Definition of Benchmarking, Benchmarks and Best Practices 1

Critical Success Factors For Benchmarking 5

Benchmarking Code of Conduct 8

2.0 Internal Preparation Prior to Embarking on a Benchmarking Project

The Importance of Leadership Commitment 11

Benchmarking Resource 13

Benchmarking Team Development 14

Benchmarking Model 18

3.0 Phase One of the MPC Benchmarking Model (Benchmarks)

Start 20

Agree on Benchmarking Topic 23

Finalise on Scope, Measures and Definitions 24

Data Collection : Survey 26

Share Strengths 33

4.0 Phase Two of the MPC Benchmarking Model (Best Practices)

Site Visit Preparation 34

Data Collection : Site Visit 40

Recommend Improvement 47

Share Findings 47

5.0 Phase Three of the MPC Benchmarking Model (Implementation)

Planning for Adapting Best Practices 54

Implementation of Best Practices 55

Monitoring the Result 56

Standardisation 57

Daily Control 58

6.0 Conclusion 59

7.0 Glossary 60

Table of Contents

Figure 1 : Benchmarking Overview 2

Figure 2: Examples of Benchmarks 3

Figure 3: Examples of Best Practices 4

Figure 4: Business Process Classification Framework 7

Figure 5: Benchmarking Process 11

Figure 6: A Typical Benchmarking Team Structure 16

Figure 7: MPC Benchmarking Model 19

Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by the Textiles CoP 25

Figure 9: Operational Structure: Interactive e-Benchmark 29

Figure 10 : Competitive Scores Report 31

Figure 11 : Ranking Report of e-Benchmark 32

Figure 12 : Human Resource Dashboard for Direct Labor in 1st Half of 2002. 33

Table of Contents

Checklist 1 : To Establish Priorities of Benchmarking 6

Checklist 2 : To Assess an Organisations Readiness for Benchmarking 10

Checklist 3 : Resources and Personal Involvement 12

Checklist 4 : Leadership Commitment 13

Checklist 5 : Managing the Resources 13

Checklist 6 : Team Preparation 17

Checklist 7: On-Site Interview 35

Checklist 8 : Before the Site Visit 37

Checklist 9 : During the Site Visit 39

Checklist 10 : Planning for Adapting Best Practices 55

Checklist 11 : Implementation of Best Practices 56

Checklist 12 : Monitoring the result 56

Checklist 13 : Standardisation 57

Checklist 14 : Daily Control 58

List of Checklist

Checklist 1 : To Establish Priorities of Benchmarking 6

Checklist 2 : To Assess an Organisations Readiness for Benchmarking 10

Checklist 3 : Resources and Personal Involvement 12

Checklist 4 : Leadership Commitment 13

Checklist 5 : Managing the Resources 13

Checklist 6 : Team Preparation 17

Checklist 7: On-Site Interview 35

Checklist 8 : Before the Site Visit 37

Checklist 9 : During the Site Visit 39

Checklist 10 : Planning for Adapting Best Practices 55

Checklist 11 : Implementation of Best Practices 56

Checklist 12 : Monitoring the result 56

Checklist 13 : Standardisation 57

Checklist 14 : Daily Control 58

List of Checklist

Box 1 : Textile and Apparel Benchmarking Questionnaire 28

Box 2 : Briefing Package 40

Box 3 : Example of Questionnaire Development Part 1 : Introduction 41

Box 4 : Rule of Thumb in Choosing the Type of Questionnaire 43

Box 5 : Example of Questionnaire Development Part 2 : Question on Process 46

Box 6 : Best Practices in Managing Municipal Solid Waste 49

Box 7 : Best Practices in Human Resource Management 50

Box 8 : MPCs Best Practices Sharing Tools 52

Box 9 : MPCs Best Practices Sharing Tool (continued) 53

List of Box

Table 1 : Human Resource Benchmarks for 1st of 2002 32

List of Table

1.0 An Overview of Benchmarking

Benchmarking is a systematic and continuous process of searching, learning, adapting and implementing the best practices from within your organisation or from other organisations towards attaining superior performance.

Malaysia Productivity Corporation

Benchmarking is defined as the practice of being humble enough to admit that someone else is better at something and being wise enough to try to learn how to match and even surpass them at it."

Quality Digest, July, 1992

1.1.1 What is Benchmarking?

Know Yourself The purpose of benchmarking is to improve our own performance. We must first understand our customers, processes, organisational structure and culture. It is with this knowledge that we are ready to learn how others perform better.

Learning to Learn In a sense, it is the ultimate reality check. How can we know how well we do something unless we have a basis from which to compare ourselves with others? We can adapt what we have learned by continuously improving our performance.

Not Mere Copying

Benchmarking is not simply copying what works for others nor adopting similar systems or processes in a follow-the-leader attitude. An organisation could not emerge as the best-in-class by merely copying the other best practices of leaders in industry. This is because the mere adoption of teefficientchniques and best practices would not make that particular organisation most , instead it just becomes only as good as the other organisations.

Benchmarking as a Knowledge Management Tool In simple terms, benchmarking is an analytical tool used to measure and compare business operations, functions or processes against best-in-class performers. Benchmarking in itself does not result in improvement. Instead, it identifies shortcomings, or inefficiencies, in the product, process, system, or organisation. The real challenge and opportunity, therefore, is to leverage the knowledge gained from benchmarking processes into competitive advantage for the organisations.

1.1 Definition of Benchmarking, Benchmarks and Best Practices

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BENCHMARKING

is is not

To know your position/operation

To know the industry leaders and competitors

To incorporate the best

To gain superiority

A continuous process

A methodical method

A source of breakthrough

A learning opportunity

An objective analysis

A process-based analysis

A management commitment

Only competitive analysis

A cost-cutting exercise

A cost-cutting exercise

Number-crunching

Site briefings and industrial tourism

Just copying or catch-up

A management fad

Reinventing the wheel

A free ride

A panacea

Just a numbers game

A benchmark is a measured best-in-class achievement, recognised as the standard of excellence for a particular process. The term benchmark originated from the geographic survey, the process of taking a measurement against a specific reference point. Some researchers maintained that "benchmarking" could be traced back to the Guilds of the Middle Ages, where cobblers used their work benches to measure the shoe sizes of key customers. These cobblers would then display their best products and other guild members and apprentices would seek out the best cobblers to understand the best practices and techniques so as to improve their own product. As benchmarking implies quantitative measurement, the best results become the benchmark reference against which you assess your own companys performance. Measurement is critical to help you measure and monitor how big the gap is between your current operations/performance and that of the best practice organisations.

1.1.2 What is Benchmark?

Figure 1 : Benchmarking Overview

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Best practice is a relative term indicating outstanding business practices which have been identified as contributing to improved performance significantly in leading companies.

1.1.3 What is Best Practices ?

Best practices as those which have shown to produce superior results; selected by systematic process and judged as exemplary good and successfully demonstrated. It is a best practice:

When it leads to superior results or performance

When it involves new or innovative use of resources such as manpower or technology

When it is organised by a reputable individual or organisation

Figure 2: Examples of Benchmarks

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MAS Electronic Ticketing (MASET)

Calling MAS Reservation to make a booking

Effecting payment at any Maybank or Mayban Finance ATM

Presenting the transaction Slip for check-in before boarding the flight

The sample process saves time, energy and effort

Deliver Products

Establish, track and evaluate quality and productivity measures for internal and external delivery services

Design efficient routing schedules to maximize use of transportation asset

Integrate delivery process with other functions (marketing and manufacturing) to increase efficiency and to reduce overall cycle time

Advance warehousing techniques which can optimize space & utilization and to minimize warehousing & inventory costs

Incentive systems for employees to motivate efficiency and accuracy

There are four types of benchmarking studies which can be applied in an organisation. Internal Benchmarking

A comparison of one specific process within your own organisation or across different department. Advantages: Accessibility to sensitive data and information is easier Standardised data is often readily available Less time and resources are needed Relatively easy to transfer across the same organisation as few barriers are

expected Example : comparing the Human Resource practices such as absenteeism, training and medical cost among various branches/subsidiaries of the company

Competitive Benchmarking A comparison of a specific process with that of a direct competitor. Advantage: Makes you more aware of what your competitors are doing and how well

they are doing it. Disadvantage: More difficult as information can be used to gain a competitive advantage

over ones competitors. However, in the commercial world, where information confidentiality is emphasised, it is usual for companies to undertake this type of benchmarking through trade associations or third parties.

Example : Public Hospital studied frontline customer service from Private Hospital

1.1.4 Types of Benchmarking

Figure 3: Examples of Best Practices

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Functional Benchmarking Focuses on comparison of a specific process externally with a similar one within a broad range of your industry and business line. Advantage: Your organisation will gain information on best-in-class practices which will

assist to identify, understand and close gap in your organisation. Example : A telecommunication company studied the application of balanced Scorecard from an electronic manufacturing company to help them improve their performance.

Generic Benchmarking

A comparison of specific processes from unrelated industries or business lines towards identifying innovation. Advantages: Most informative and can result in changed paradigms in the current

operations of an organisation. Can lead to innovation and dramatic improvements. Example : A Municipal council learning and adapting the best practices of managing industrial waste from an established chemical company.

Benchmarking provides a methodology for learning best practices. Benchmarking is a methodical process involving careful research and an understanding of our own processes, products and services. This methodical process helps us to gain management support for improvement, identify those who perform well, determine what needs to be improved, and incorporate what we have learned to change our performances for the better. The desired end result of

benchmarking is change. Benchmarking involves seeing a need for change, discovering what to change, learning how to change it, and developing a vision of the future state. To change, we must be willing to change and adapt, share information with others, be open to ideas from the "outside", and focus "how to change." To increase the chances of achieving change based upon the benchmarking recommendations, we should tie our benchmarking efforts to our organisation's strategic planning

organisations performance nor achieve their vision of a future state and goals. This also will gain leadership is commitment which is vital implementation. A successfully conducted study without implementation will not improve the

1.2 Critical Success Factors For Benchmarking

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1.2.1 Barriers to Successful Benchmarking

Lack of clear, visible and consistent management support Failure to fully understand and document own processes Selecting too many processes to benchmark No adequate staff and resources Not implementing the best practices learnt

1.2.2 What to Benchmark

Measurement is critical to help the organisation to measure and monitor how big the gap is between current operations/performance and the best practices leant from the best-in-class organisation. However, the organisation itself must identify which operations are crucial to be improved in the short-term or long-term planning. Checklist 1 shows several important issues for identifying what to benchmark in the organisation.

Checklist 1 : To Establish Priorities of Benchmarking

No. Action Check

Q1 What is the potential impact on the critical success areas of the organisation in terms of cost, timeliness and quality?

Q2 How do customers rank the importance of these processes?

Q3 What specific problems have been identified?

Q4 What are the major costs in the organisation?

Q5 Which functions represent the highest percentage of cost?

Q6 Which functions have the greatest room for improvement?

Q7 Which functions have the greatest effect or potential effect for differentiating our organisation from our competitors?

Q8 Is the organisation ready to implement these process changes?

Q9 Does the organisation have the structural and organisational capacity to change?

1.2.3 How to Identify Critical Process to Benchmark?

Too often, we become bogged down by the fear of making mistakes in apples to oranges benchmark comparisons. We are concerned with how to compare our processes meaningfully with those of other organisations. We try to comprehend

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the vocabularies that obscure the underlying commonality of our business processes. As a result, we fail to make out of the box comparisons and thus cannot search for insights and best practices not found within typical intra-industry paradigms. Organisations can use the Process Classification Framework which was developed by The American Productivity and Quality Centre (APQC) International Benchmarking Clearinghouse together with Arthur Andersen & Co. This Framework serves as a generic enterprise model for businesses and other organisations to view their activities from a cross-industry process viewpoint instead of from a narrow functional viewpoint (see Figure 8). A total of 13 processes have been identified which classified in the framework as follows :

1. Understand Market & Customer 2. Develop Vision & Strategy 3. Design Products & Services 4. Market & Sell 5. Produce & Deliver for Manufacturing Organisation 6. Produce & Deliver for Services Organisation 7. Invoice & Service Customers 8. Develop & Manage Human Resources 9. Manage Information 10. Manage Financial & Physical Resources 11. Execute Environmental Management Resources 12. Manage External Relationships 13. Manage Improvement & Change

Figure 4: Business Process Classification Framework

Source : American Productivity & Quality Center (APQC)

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Most organisations follow a set of ethical and legal guidelines for benchmarking exchange known as the Benchmarking Code of Conduct. These guidelines establish the ground rules to follow when asking for, exchanging, or providing information. The following guidelines are adapted from the American Productivity and Quality Center (APQC).

1. Conduct yourself within legal bounds 2. Participate by exchanging information 3. Respect confidentiality of information 4. Use of information only for the intended purpose 5. Initiate contacts with designated individuals 6. Obtain permission before providing contacts 7. Be prepared for each benchmarking event 8. Follow through with commitment to partners 9. Treat information from others as they desire

Principle of Legality

If there is any potential question on the legality of an activity, don't do it. Avoid discussions or actions that could lead to or imply an interest in restraint

of trade, market and/or customer allocation schemes, price fixing, dealing arrangements, bid rigging, or bribery.

Refrain from the acquisition of trade secrets from any means that could be interpreted as improper, including the breach or inducement of a breach of any duty to maintain secrecy. Do not disclose or use any trade secret that may have been obtained through improper means or that was disclosed by another in violation of a duty to maintain its secrecy or limit its use.

Do not, as a consultant or client, extend ones benchmarking study's findings to another company without first obtaining permission from the parties of the first study.

Principle of Exchange Be willing to provide the same level of information that you request in any

benchmarking exchange. Communicate fully and early in the relationship to clarify expectations, avoid

misunderstanding and establish mutual interest in the benchmarking exchange.

Be honest and complete on all requested information that will be exchanged with other benchmarking partners.

Principle of Confidentiality

Treat benchmarking interchanges as confidential to the individuals and companies involved. Information must not be communicated outside the partnering organisation without the prior consent of the benchmarking partner who shares the information.

A company's participation in a study is confidential and should not be communicated externally without its prior permission.

1.3 Benchmarking Code of Conduct

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Principle of Use Use information obtained through benchmarking partnering only for the

purpose of improvement of operations within the partnering companies themselves.

The use or communication of a benchmarking partner's name with the data obtained or practices observed requires the prior permission of that partner.

Do not use benchmarking as a means to market or sell. Principle of First Party Contact

Initiate benchmarking contacts, whenever possible, through a benchmarking contact designated by the partner company.

Respect the corporate culture of partner companies and work within mutually agreed upon procedures.

Obtain mutual agreement with the designated benchmarking contact on any hand-off communication to other parties.

Principle of Third Party Contact

Obtain an individual's permission before providing their name in response to a contact request.

Avoid communicating a contact's name in an open forum without the contact's permission.

Principle of Preparation Demonstrate commitment to the efficiency and effectiveness of

benchmarking by being prepared prior to making an initial benchmarking contact.

Make the most of your benchmarking partners time by being fully prepared for each exchange. Help your benchmarking partners prepare by providing them with an interview guide or questionnaire and agenda prior to benchmarking visits.

Principle of Completion Follow through with each commitment made to your benchmarking partner in

a timely manner. Complete each benchmarking study to the satisfaction of all benchmarking

partners as mutually agreed. Principle of Understanding and Action

Understand how your benchmarking partner would like to have the information they provide be handled and used, then handle and use the information as intended.

Understand how your benchmarking partner would like to be treated. Treat your benchmarking partner in the way that each benchmarking partner

would like to be treated.

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1.3.1 Is Your Organisation Ready for Benchmarking?

As the pace of change accelerates in the 21st Century due to technological opportunities, liberalisation of world markets, demand for innovation, quality and speed, organisations have to readjust and realign their operations to counter all these challenges. The pace of change has increasingly forced organisations to be more outward looking, marketoriented and knowledgedriven. Benchmarking is a useful tool that can assist businesses built strong capabilities, ensure an inward flow of ideas and establish true competitive gaps. In addition, benchmarking also enables organisations to establish their position in an industry and learn from competitors to achieve greater success in all aspects of their business. Although benchmarking is currently emerging as a buzzword among all industries around the world, organisation needs to identify the readiness of their own organisation to implement the benchmarking project in any area of interest. This will ensure the success of the benchmarking project. Checklist 2 can be used to assess the readiness of an organisation.

Checklist 2 : To Assess an Organisations Readiness for Benchmarking

No. Action Check

Q1 How does the top management define benchmarking?

Q2 Is there a common understanding between the benchmarking team and your management on the definition of benchmarking?

Q3 Will your team able to obtain the resources you need time, personnel, equipment and funds?

Q4 Is the proposed study linked to your organisations strategic plan?

Q5 Will the proposed study bring about the desired need for change?

Q6 Is your leadership committed to both the benchmarking process and to implement changes?

Q7 What benchmarking process does your team intend to follow?

Q8 If your team is benchmarking a process, will the process owner be involved?

Q9 If you are benchmarking a process, is the process clearly defined?

Q10 If you are benchmarking a process, do you have the measures for this process?

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2.0 Overview of Benchmarking Process

2.1 The Importance of Leadership Commitment

There are various approaches to the benchmarking process. The benchmarking process usually incorporates four phases:

Figure 5: Benchmarking Process

Senior managements support is vital to ensure the success of any benchmarking project. Visible commitment and action will reflect the seriousness and importance of the benchmarking initiatives. Leaders must back-up their advocacy with the resources and personal involvement in the projects. Support, resource and direction from respective organisations leader are the three important elements before starting a benchmarking project. Checklist 3 and 4 can be utilised to identify the involvement of resources and Personal and leadership commitment respectively.

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Checklist 3 : Resources and Personal Involvement

Check No. Action

Q1 Obtain and advertise the managements endorsement of benchmarking as a principal strategy for organisational success

Q2 Encourage managements involvement in the identification and design of benchmarking opportunities

Q3 Identify the sponsors and stakeholders and identify a benchmarking "Champion"

Q4 Brief senior executives on the objectives and benefits expected from the benchmarking project to obtain management "buy-in" for the project

Q5 Determine the level of involvement, support and direction needed from the management and obtain their commitment to provide it.

Q6 Identify the resources needed and obtain managements declaration of support

Q7 Establish a benchmarking training program

Q8 Create recognition and rewards for benchmarking excellence

Q9 Brief senior management at regular intervals during the benchmarking project to ensure continuous support

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Checklist 4 : Leadership Commitment

Check Responsibilities

Supporting the benchmarking study

Actively committed to benchmarking.

Willing to change and adapt new practices based on benchmarking findings.

Have reached agreement on the objectives of the changes sought by the benchmarking study.

Committed to empower the team the time and the budget needed to carry out the study.

Agreed on the urgency and scheduling of the team's work load.

Approve the major milestones set by the team

Providing Resource support for the benchmarking study

Has allocated sufficient resources to support the benchmarking process itself (time, funding, process support, etc.).

Has identified and approved the necessary resources for the benchmarking study.

Providing direction

Has clearly identified the sponsor/process owner for this benchmarking study.

Has provided the team with a mission and charter.

Has determined and conveyed to the team the desired reporting procedures

2.2 Benchmarking Resource

Resources are the number of people, time, dollars, systems, equipment and other support required in the benchmarking study. Effective and efficient management of benchmarking will reduce the requirement for such resources. Checklist 5 is to manage the resources.

Checklist 5 : Managing the Resources

No. Action Check

1. A quality approach is in place

2. The scope is limited and manageable

3. Few organisations or processes are affected

4. Only relevant people are involved

5. More economical to use secondary research and telephone interviews

6. Benchmarking is established in the organisation

7. The team has experience in benchmarking

8. The team is dedicated solely to this project

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At the planning stage itself, a benchmarking team needs to be formed. Members of the benchmarking team in an ideally should comprise individuals who know the process to be benchmarked. A well-balanced and diverse team will increase the possibility of team creativity and innovation.

2.3.1 Selecting the Benchmarking Team

There are many ways to form a benchmarking team. The teams composition should be carefully determined based on the scope of the effort, the available resources and the overall objectives. When selecting team members, it is important to include someone who has the influence to make changes in the process being studied. It is ideal to have the process owner on the team as well as key players when implementing change.

2.3.2 Selecting the Benchmarking Team

Contact potential team members; discuss the scope of the study and the justification for change.

Form the benchmarking team. Make sure the individuals and groups that are critical to implementation are represented. Include a member of the leadership on the team. If benchmarking a process, the process owner is preferred. (see Team Checklist (Checklist 6)).

Determine roles and responsibilities of the team members.

If necessary, conduct training for the team.

Ensure that the team will adhere to the Benchmarking Code of Conduct (see Benchmarking Code of Conduct (2.7)).

Develop a project plan.

Assess leadership commitment (see Leadership Commitment (Checklist 4)).

Understand your current performance, which involves examining your process and organisational structure, using flowcharts, fishbone diagrams and other tools.

Develop an understanding of the relationships that exist between your process and others.

2.3.3 Type of Benchmarking Team

(1) Intact Work Group

Usually in single location with all the members reporting to the same manager.

Manager may or may not be the Team Leader.

2.3 Benchmarking Team Development

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Intact Work Groups are normally the customers to their own benchmarking processes.

Advantages:

Team does not need outside approval in order to proceed with the process.

Adjustments can be made according to requirements.

The benchmarking project can be a continuous process.

(2) Cross-functional, Interdepartmental and Inter-organisational Teams

Structured as a Task team or Taskforce, with specific charters and defined sets of customers.

Individuals selected for this Team are choose based on either their specific knowledge, skill level or representation for departments or organisations.

The team is brought together on a specific issue or problem and will disband itself once benchmarking is completed.

Team often produces recommendations or reports, and presents findings to the top management.

(3) Ad Hoc Team

Team is flexible.

Number of members vary according to their share of common interests or responsibilities.

Team applies benchmarking processes to any situations that warrant investigation.

Ad Hoc Team can be decided by an individual or formed as a result of a team decision.

Normally practised by matured organisations with high overall process awareness, process support and actual hands-on experience in benchmarking.

A core Benchmarking Team structure consists of employees who perform the majority of benchmarking tasks. Other employees and benchmarking specialists may provide services as and when needed.

2.3.4Roles and Responsibilities of a Benchmarking Team

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Figure 6: A Typical Benchmarking Team Structure

A typical benchmarking structure is as in Figure 5 above. A benchmarking project can be an extension of the work of a quality improvement team, consists of:

2.3.5 Benchmarking Champion/Sponsor

Quality Council of an organisation shall assign someone as the champion/sponsor. The sponsor should be at senior organisation level (Head of Quality or Benchmarking, or a Senior Line Manager). The sponsor is most often not a team member.

2.3.6 Project Manager

He/she can be a resource person, assigned ownership at the project to ensure credibility and acts as a buffer between the Quality Council and the benchmarking team. The project manager shall ensure the overall objectives of the benchmarking project are met. He/she shall guide and ensure project remains focused. He/she needs to ensure completion of tasks and keep Quality Council informed.

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2.3.7 Project/Process Support

The project support team play a crucial role to assist the benchmarking team in terms of provide training, IT development, administrative work and others.

2.3.8 Facilitator

Facilitator needs to review project objectives and tasks. This will assist benchmarking team to complete each step in the benchmarking process.

2.3.9 Benchmarking Team

The benchmarking team to complete each step in the benchmarking process. Overall the benchmarking teams responsibilities are to collect data, analyse data and make recommendations based upon the findings from the benchmarking project. Checklist 6 is use for team preparation before initiate any benchmarking project

No. Action Check

Assessing Team Composition

1. Include appropriate people in the team to ensure proper team expertise and maturity, and to help implement changes resulting from benchmarking recommendations

2. Select team members based on their abilities and motivation

3. Team members should be creative, innovative and open to new ideas

4. Team should be adequately represented by process owners

5. Team leader to serve as effective liaison between the team and senior organisational leadership

6. The process is within the teams sphere of influence

Checklist 6 : Team Preparation

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No. Action Check

Include a Team Facilitator

1. The team should have a trained facilitator

Training Assessment

1.

Appropriate benchmarking information and education acquired through classes, reading, or consultation to assure an effective benchmarking experience and to maximize the probability of an appropriate return on investment of the organisation's benchmarking

2. Project planning tools are available to assist the benchmarking team. Team members need to be trained on know how to use effective project management techniques

Assessing Individual Responsibility

1. Each team member needs to personally review and update his/her understanding of the process, product or service to be benchmarked

2.

Each team member is aware of what organisational information must be protected, such as Classified Information. For Official Use Only, contracting information and other organisational intellectual p roperty

2.4 Benchmarking Model

Before embarking on a benchmarking project, it is a vital element to have an appropriate benchmarking model. The benchmarking model can be used as a guide and framework before implementation.

2.4.1 MPC Benchmarking Model

This model was developed by Malaysia Productivity Corporation (MPC), Malaysia in 1998. The MPC Benchmarking Model is a synthesis of various models and consistent with various definitions on benchmarking. It incorporates many steps, that have been found to characterise successful benchmarking programmes in leading organisations. This model provides an adequate framework for successful planning and execution for any benchmarking exercise. Variations in approaches

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are made possible within the framework, enabling benchmarking approach to be tailored to fit specific requirements of the industries.

Phase I of the Model emphasises on the selection of performance indicators, data processing, benchmark comparison and sharing of strengths. Phase 2 focuses on the performance analyses, identifying best practices and sharing of knowledge and experiences. Phase 3 is the adaptation, implementation and standardisation of best practices into ones organisation for continuous improvement. The desired end result of benchmarking is higher productivity and better service quality level.

Chapter 4, 5 and 6 of this book shall explain in more detail on each phase of this MPC Benchmarking Model.

Figure 7: MPC Benchmarking Model

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3.0 Phase One of the MPC Benchmarking Model (Benchmarks)

3.1 Start

3.1.1 Creating Benchmarking Community of Practices (CoP)

Creating a Community of Practice (CoP) is an essential step before initiating on any benchmarking project. CoP is a network of individuals or organisations within similar or dissimilar industries who share some common areas of interest. Members of a CoP are grouped together on a voluntary basis to initiate some form of benchmarking activities, where MPC serves as the facilitator.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

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3.1.2 Guidelines for Selection of CoP Members

Who is "best-in-class" or "How do we determine who to benchmark?" are some of the questions most often asked. Overall, do not spend too much time and energy looking for the "best". Anything which offers a major improvement over our current performance is worth learning about.

Collect information on potential members

Collect information and ideas on potential CoP partners through research, brainstorming and talking to process owners in terms of area, organisation and rationale

Area of Study Organisation Rationale

Product Testing Consumer Goods Manufacturers

Its credibility is based largely on its ability to test products rigorously

Physical Security Successful Casinos

The volume of exposed cash flow on a daily basis

New Product Development Cycle time

Toy Company The ability to constantly introduce the latest toys and games to the market speedier than others

Selecting your CoP members

Select CoP members based on collected information. Keep in mind that probably no one company will be the "best." Companies will have different strengths and weaknesses, as well as different structures and culture.

Follow-up with CoP members

Determine willingness of sharing information.

Contact appropriate personnel.

If any suppliers or customers are selected, contact the appropriate internal contracting personnel or customer representatives as a matter of courtesy and to ensure that no major problems exist between the organisations.

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3.1.3 Criteria for Selecting CoP Members

Comparability

You need to have some level of comparability with your partner. To assess comparability, ask the following questions in terms of:

Is the potential partner comparable financially (revenues, sales, profits)?

Does the potential partner engage in comparable functions (similar work process, methods, practice)?

Does the partner have comparable requirements (similar customer expectations)?

Does the partner have comparable logistics (similar set-up and work flows)?

Is the potential partner part of a comparable industry (similar products and markets)?

Is the potential partner comparably sized (similar number of employees and market share)?

Does the potential partner have comparable organisational and divsional structures?

Is the potential partner part of a comparable market sector (public, private, governmental)?

Types of organisation

Potential partners come from three types of organisations:

Internal organisations with similar processes:

You can benchmark similar functions within a large organisation to identify and incorporate in-house best practices.

Those within our own industry or direct competitors:

Any direct competitors within own industry who exhibit outstanding performance in the selected areas to be studied. A third-party source may have to be used to obtain such data if necessary. For this, there maybe a need for lead considerations. Keep in mind that benchmarking exclusively within one's own industry limits out-of-the box thinking and the finding of best practices.

External functional leaders outside our industry

Concentrate on studying companies that are external functional leaders to obtain the most innovative practices. It is also easier to collect data since non-competitors are more willing to share information with each other.

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Look for a mix of candidates, each of which might yield an element of superior performance

Consider the following issues:

Be sure you have considered going outside your industry Don't pick a partner solely because they are known for doing one thing

particularly well Limit the number of partners Select accessible partners Assess your partner's culture. All processes exist within an organisational

system.

Document your process of finding partners. Document your sources, criteria and selections. The purpose of this documentation is to avoid second guessing later in the process, and to save time.

3.2 Agree on Benchmarking Topic

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

Once the CoP is formed, members need to decide what to benchmark. Among some considerations are:

What is the need and where does it exist in your organisation ?

What do other people think of your performance?

Know your own self ! Survey your operations.

If you do not know what area needs to be to benchmarked, use the benchmark survey method to explore.

Identify and learn the factors that are critical to performance and the units in which they can be measured.

Decide on the appropriate level of resolution for the study.

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3.3 Finalise on Scope, Measures and Definitions

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

The collection of data and information is vital. Success depends on how thoroughly the organisation has planned and analysed the scope of work, method of measuring results and the definition of terms to be understood by all parties involved. Process documentation is critical as it helps shape the scope of the study. Based on a process profile, the scope of process should be manageable.

The key measures should be critical to the success of your process. These critical success measures should be well balanced, include both leading and lagging measures. Evaluate both your current and any proposed measurements using these questions:

What are the measures?

How are they calculated?

What are both the historical and current level of performance?

Where are the largest gaps in performance vs. requirements?

Are these measures based on our understanding and knowledge?

Are these measures based on other organisations measure of related processes?

After members of a CoP have identified the scope and the appropriate measurements, the definition of each selected Key Performance Indicators (KPIs) need to be discussed. A common understanding and consensus on the definition is important, otherwise the resulting benchmarks would not provide a meaningful comparison.

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Scope Key Performance Measures

Unit Definition

Safety Accident/1000 persons per yer

Number Number of accidents occurred

Environment

BOC or COD ppm

BOC is Biochemical Oxygen demand of water while COD is amount of oxygen to oxidise both organic and inorganic compounds

Claim (customer satisfaction)

Rate / Sales Amount

Percentage The ration of total number of claim against total sales amount

Production Quantity

Actual and Converted

Yards

Actual is the actual production quantity (A grade) produced in production while converted is actual production quantity converted based on a standard product (ST444 SW) by cloth weight

Quality

Total B grade and by spinning

Percentage

Total grade B is the ratio of total defective fabric caused by spinners against the total issued quantity

By Weaving Percentage Is the ratio of defective fabric caused by weavers against the total issued quantity

By Dyeing Percentage The ratio of defective fabric caused by Dyes against the issuedquantity

Efficiency

Reworking Percentage

The ration of total topping and color change quantity against the total quantity for normal dyeing and color change (pad steam base)

Replacement Percentage

The ratio of total additional gray issue quantity to make up insufficiency from minimum shipment quantity against the total issued gray issued quantity

Rate of Keeping Delivery Date

Percentage The ratio number of orders compliance to EMD against the total orders issued

Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by the Textiles CoP

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1 2 3

Scope Key Performance Measures

Unit Definition

Unit Consumption

Electricity KWH/100 yd Total consumption against converted quantity by electricity

Steam (Fuel Oil) L/100 yd Total consumption against converted quantity by fuel

Water Ton/100 yd Total consumption against converted quantity by water

Dyestuff Kg/100 yd Total dyestuff consumption against converted quantity by DCA

Chemical Kg/100 yd Total chemical consumption against converted quantity by OCA

Auxiliaries Kg/100 yd Total auxiliaries consumption against converted quantity by OCA

Labour P/100 yd per day

Manpower against converted quantity per day per 100 yd

3.4 Data Collection : Survey

4 5 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

The data gathering phase involves a period of hard, purposeful work, requiring frequent contacts and working sessions with the participating organisations. Data sources and people for benchmarking may be found at various levels in an organisation.

Data collection can be conducted through a survey questionnaire or using an on-line system such as MPCs e-Benchmark.

3.4.1 Types of Data Collection

Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by the Textiles CoP (Continued)

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3.4.2 Survey Questionnaire

Data collection involves the following:

Draw up questionnaires, including definitions and explanations where necessary.

Collect information and compile data on business or organisations.

Collect data and information from other sources.

Validate data and information collected by cross-checking with the respondents.

Document the data and information by computing into the computer.

Advantages of using the questionnaire in gathering data and information:

Provides an automatic framework for all documentation to be compiled, sorted and organised

Presents a systematic and clear method of collecting data and information that can be understood and accepted by all parties concerned.

Avoid vague or over precise wording, double negative and embedded questions, hypothetical questions, questions that imply biasness, overlapping categories, abbreviations and questions that are too personal or too demanding.

Questionnaire is the measuring instrument of the Benchmark Survey. It must measure what it intends to measure, and not something else Validity. It must also give accurate readings Reliability.

In designing the questionnaire, CoP members must consider the kind of data and information to be collected in fulfilling the objectives of the benchmark survey. CoP members need to spend time in writing clear, simple definitions of the information content to be surveyed in order to avoid misunderstanding and enhance comparability for purposes of analysis. Experience

showed that questionnaire design requires several testing, revisions and clarification before it can be accepted as reliable.

Questions in the questionnaire can comprise one or a combination of the following: Open questions Yes-or-No questions Multiple choice questions Scoring/Ranking questions Data points

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Box 1: Textile and Apparel Benchmarking Questionnaire

1.0 (a) Name of Company: (b) Contact Persons: Tel No: Fax No:. 2.0 Please state the number of paid employees as follows: 3.0 Please state the following with respect to only completed customers orders for period

January to December 2012:

EMPLOYEE Total No. at 31 Jan 2012

Total No. at 31 Dec 2012

Total No. resigned/retired in

Jan-Dec 2012

Total No. recruited in

Jan-Dec 2012

2.1 Total No. of paid employees

2.2 Total No. of Management Staff

CODE

FOR APPAREL ONLY Quantity (in pieces)

Quantity in equivalent Units (please state in Sq. Meter or Kg)

3.1.1 Total Quantity of Customer Order (excluding work-in-progress)

3.1.2 Total quantity of fabric ordered

3.1.3 Additional/Replacement of fabrics, if any

3.1.4 Actual total quantity shipped to customers

FOR SPINNING ONLY Quantity (in pieces)

3.2.1 Total Quantity of Fibres Ordered for the production of yarns

3.2.2 Total quantity of yarn produced

3.2.3 Total wastage of fibre

FOR WEAVING ONLY Quantity (in Kg)

3.3.1 Total Quality of Yarn Ordered for the production of fabrics

3.3.2 Total quantity of unfinished (greige goods) fabric produced

3.3.3 Total quantity of finished (dyed/printed/other finish) fabric produced

3.4.3 Total wastage of yarns

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3.4.3 On-line e-Benchmark

In 2001, MPC developed an on-line and interactive e-benchmark system to speed-up the data collection and computation of benchmarks. This system allows industries to conveniently key-in data, compute indicators, rank performance and benchmark comparisons, all within a submission using Internet. Confidentiality of industrys data is secured through the use of a password. This real time e-benchmark system had encouraged many industries to measure performance and benchmark comparison in Malaysia as well as in other countries.

Real-time data processing takes place in the e-benchmark Hub

Password issued to each member

Member key in data

Real-time benchmark report generated

Ranking against benchmark for self-evaluation and continuous

improvement

Community agrees on scope, measures and definitions to

benchmark and manager gets data form ready

1 2 3

4

5

6

Figure 9: Operational Structure: Interactive e-Benchmark

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The operational structure of an interactive e-benchmark system as shown above comprises six simple steps:

Step 1 : Agreement on Benchmarking by Community of Practice (CoP)

The CoP members agree on the scope, measures and definitions for the indicators to be measured. Common understanding and acceptance are necessary to ensure accurate provision of data into the system. The CoP manager will then prepare the format to facilitate data entry process.

Step 2 : Password to CoP members

Each CoP member will be issued a password to access their own data entry format. Confidentiality is ensured by the password and personalised record, which cannot be accessed by anyone else.

Step 3 : Data Entry

Members will key-in data for all the Key Performance Indicators agreed by the CoP into the e-benchmark system. They are responsible to check, verify and validate their data before submission.

Step 4 : Real-Time Data Processing

Upon submission, data is transferred to the hub and is instantly processed . A database is then established for the CoP.

Step 5 : Real-Time Benchmark Report Generated

A real-time benchmark report is then generated for each indicator and period selected. CoP members would be able to analyse their own performance indicators, trends, competitive scores and performance ranking as compared to others in the CoP.

Step 6 : Self-Evaluation For Continuous Improvement

CoP members can refer to the benchmark report on-line or they can print them out for discussion. The benchmark report given serves as useful inputs for members to identify benchmarks and performance gaps for their strategic planning and improvement.

3.4.4 Identifying the Performance Gap

Identifying and quantifying the performance gap to the benchmarked performance is only half of the analysis. What makes benchmarking a powerful tool for improvement is that it also requires you to identify and understand the underlying operatives content and work processes to explain why the performance gap arises. One of the most essential steps in benchmarking therefore would be to get to the bottom of things in order to understand why performance differs.

To gain a clearer understanding of what you need to do to achieve your goals, perform a gap analysis. In a gap analysis you evaluate the level of your current performance and compare it to where you want to be or to another organisation's performance. The difference between the two is the gap.

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A gap analysis commonly indicates that your performance is below the desired level. However, a gap analysis can reveal that your performance is high for example, if you are ahead of your competitor in which case you would want to maintain or increase the gap even further.

To be effective, a gap analysis has to address two areas: the magnitude of the gap and the reasons for the gap. Understanding the magnitude of the gap gives you perspective on the effort necessary to close or maintain it, while understanding the reasons for the gap points out the areas where you should focus your efforts.

3.4.5 Process for Performing a Gap Analysis

Graphically present your performance measure, showing both your current performance and the goals you have projected.

Identify the magnitude of the gap in terms of the unit of measure.

Using data collected from appropriate sources, determine the reasons for the gap. Sharing information and ideas in a team setting is extremely powerful.

Prioritise the reasons for the gap.

Summarise your conclusions. You will use these to determine what actions you should take to reduce, maintain, or increase the gap.

3.4.6 Types of Real-Time e-Benchmark Reports

The CoP members can use the real-time e-Benchmark Reports generated by the e-benchmark to identify the performance gap. There are two reports in e-Benchmark : Competitive Score and Ranking Report. The competitive scores report presents in terms of minimum, medium and maximum of the communitys performance against the organisations own performance while the ranking report highlighted the organisations position against CoP members. Figure 14 and Figure 15 show the samples of the competitive scores respectively.

Figure 10 : Competitive Scores Report

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Figure 11 : Ranking Report of e-Benchmark

Benchmarking output can also be presented in the form of dashboard. Table 2 and Figure 16 show the Human Resource Benchmarks and Dashboard for first half of 2002 respectively.

3.4.7 Development of Dashboard

Key Performance Indicators Direct Labour

Indirect Labour (non-exempt)

Indirect Labour (exempt)

Weighted Average

Time to fill an open position (Day) 0.49 14 20.33 -

Cost per hire (RM) 4.48 158.33 242.00 -

Medical cost per employee (RM) 2.78 11.12 16.89 -

MC rate (%) 0.24 0.44 0.05 0.26

Employee turnover (%) 2.22 0.15 0.00 1.81

Employee turnover for equal or less that 1 month (%)

9.36 1.45 0 0

Absenteeism Rate (%) 0.32 0 0 0.19

Table 1 : Human Resource Benchmarks for 1st of 2002

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Upon completion and analysis of the benchmarking report, a seminar to share the e-Benchmark findings will be conducted. During the seminar, there will be an exchange and more in-depth discussion on the findings. The exemplary performers or best practice company/companies will share their strengths on how they have achieved the benchmark performance. No individual company is excellent in all areas, hence benchmarking encourages a win win sharing and learning culture. All participating members could exchange experiences and share their strengths and opportunities in this seminar.

Subsequently members would be interested to know more about the best practices of these benchmark companies. Benchmarking is not merely number-crunching. It goes beyond number. Benchmarking is for Best Practices. This takes the CoP to Phase 2 of the MPC model for learning best practices.

Figure 12 : Human Resource Dashboard for Direct Labor in 1st Half of 2002.

3.5 Share Strengths

1 2 3 4 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

5

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4.0 Phase Two of the MPC Benchmarking Model (Best Practices)

4.1 Site Visit Preparation

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

1

The most effective method of acquiring information in benchmarking is to visit the best-in-class company at its site and conduct face-to-face interview. This step provides you the chance to get acquainted with the atmosphere, environment and culture in which the company is operating. You can tour the premise and see with your own eyes what kind of methods and processes are being used. You can witness the demonstration of support systems and administrative aids, learn more about the goods and services the company products and services, and take the opportunity to discuss pros and cons with the people on site.

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However, the usefulness and success of the site visit will depend on the thoroughness with which it is prepared and planned. Please be aware that you are taking up their busy working time, therefore come well prepared! Please remember too that this method of gathering information is costly.

First, check with the contact person in the other company to ensure that you will be meeting and interviewing the right list of people. Prepare a set of questions for a face-to-face interview as an interview guide during the companys site visit. Send an initial agenda outlining or defining the purpose of the benchmarking visit and send it a few days earlier to the company. The agenda to include :

An opening statement Introduction Purpose of the interview Why the individual was selected for the interview Prepare a list of questions to askbe prepared to explain the relevance of a

questions Prepare your own set of answers to the questions to share with the

respondents

No. Check Action

1 It is essential to start off on the right footing. Begin by introducing yourself and your company and briefly explain your mission. Try to strike a friendly but businesslike note.

Make sure that you meet the right person, i.e., the one best qualified to inform you about the excellent performance under study

2

Confirm the time and place of meeting (including the time it is scheduled to end) in writing to avoid any misunderstanding

3

Send the interviewee a letter or fax message containing a brief rundown on yourself, your company and your mission, as well as the questions, questionnaire and the Individual Benchmark report you plan to discuss

4

Do not expect one meeting to supply all the information and data you needed. You may follow up with telephone, fax or e-mail.

5

Do your homework thoroughly as possible by reading reports etc 6

7

Be ready for counter-questions of the type: Why do you ask that question ?. Be prepared to explain your motives. How do your lot do this, how is this managed in your company ?.

Reserve time immediately after the meeting to follow up, document and discuss the information and data emerged from the meeting. What questions still remain unanswered? What supplementary information do we need?

8

Checklist 7: On-Site Interview

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During the interview, LISTEN actively to probe for more information to explain the performance:

Look interested Inquire with questions Stay on target Test for understanding Evaluate the message Neutralise your emotions

4.4.1 Guidelines for Site Visits Site visits are expensive for all concerned. For those visiting, there are travel costs and preparation. For the host, there is the time invested in both the preparation and the hosting of the visit. However, it can be the best means of sharing information. Given both the expense and the potential benefits, prepare carefully and thoroughly for the site visit. Although these guidelines are lengthy, it is best to be thoroughly prepared. Members of CoP need to finalise two types of checklist before and during the site visit (Checklist 8 and 9) towards gathering best practices information.

Useful tips: You can use these phrases to encourage people to respond to you I see. Youre right. Interesting that you should say that. I dont quite follow you, could you elaborate on that a little bit.

That sounds interesting, what exactly do you mean ?

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No. Action Check

1 Provide information on your organisation to your partner

2 Consider scheduling a pre-visit to handle logistics and clarify the purpose of the study with all participants

3 Review all available information about your partner. You should know the size of their business, the industry in which they operate, the type of ownership, the organisational structure, the style of manufacture and your estimation of their core competencies

4 If possible, evaluate your partner's culture--how formal is their culture, what sort of participation is common in their decision making process, and what is their communication style

5 Determine what, if any, audiovisual equipment will be needed and make sure the partner will have it available

6 Offer several choices of dates on which to visit

7 Develop an agenda for the meeting. Discuss this with your partner. Once finalised, give it to your partner at least two weeks prior to the meeting. Include type of meeting you want, length of visit, and what you want to accomplish.

8 Develop a list of attendees for the meeting and give this to your partner at least two weeks prior to the meeting

9 Develop a list of questions (see 5.2) and give those to your partner at least two weeks prior to the meeting. Ask only for information which we are willing to share ourselves. Be prepared to give your own answers to the same questions.

10 Determine the roles of team members:

Who will be the team leader?

Who will be the discussion moderator?

Who will be the recorder?

Who will be the timekeeper?

Plan to have members ask questions relating to their respective areas of expertise since it will be their responsibility to understand and effectively evaluate the data gathered and apply it in the analysis. If these people have not conducted an interview before, train them

Checklist 8 : Before the Site Visit

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No. Action Check

11. Have team members review all questions and know their organization's answers to the questions

12. If this is an initial meeting, consider giving the Agency overview briefing to your partners if time allows and your partners are interested

13. If we are a customer of this partner, invite the local sales representative or account manager to attend

14. Determine if any information to be requested or shared is proprietary or classified information. If so, establish how confidentiality will be maintained

15. Plan to exchange business cards

16. Develop a briefing package (see Box 2)

17. Does the internal organisation have any problem in understanding the questions?

18. Review and critique your input. If necessary, make appropriate changes to the questions

19. If the internal organisation is interested in participating, define their roles and responsibilities

20. Send a letter to confirm the visit, The letter should include:

Introduction Thank you Who will be attending Logistics Name and phone number of hotel Arrival and departure times Appropriate airline information Questions for the meeting Confirmation of where you will first meet, such as "We will meet

you in the lobby at 8:15 on Tuesday morning."

Checklist 8 : Before the Site Visit (continued)

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No. Action Check

1. Introduce team members. Each member should explain their functional role, responsibilities and their objectives in the benchmarking effort. Asking the benchmarking partner to do the same will ensure the correct people are in attendance before starting the session.

2. Identify team roles within the interview team

3. When appropriate, spend some time socially to develop a rapport. Food is excellent for facilitating social rapport

4. State the objectives of the visit and the process to be followed

5. Reconfirm the agenda and make sure everyone has copies

6. Review benchmarking project description

7. Communicate why the company was selected

8. Follow the list of questions submitted, asking only one question at a time. Begin with open-ended questions on general areas of interest before proceeding to specifics. As questions are introduced, defining specific operations or processes will eliminate any confusion between company-specific terminology and clarify who should be responding with the required information

9. Use the questions to drive the meeting. Make sure everyone has copies

10. Don't ask for information you would not be willing to share ourselves

11. Caucus and regroup at breaks

12. Travel in pairs or small groups during any site tours. This offers several advantages: one person can take notes while another talks; the team can split up to observe different operations; team members can validate important points and observation

13. Before closing with a review, have the team meet to ensure that all questions have been answered thoroughly and to develop any additional questions which should be addressed before the session

14. Close with a review. List any follow up issues to be completed / clarified

15. Thank them for their time, effort and cooperation

16. Offer a reciprocal visit.

Checklist 9 : During the Site Visit

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Before going on a site visit, a briefing package should be prepared and given to all benchmarking team members and the CoP members.

The briefing package should contain the following: Logistics

Schedule Location of meeting Purpose of meeting

Overview of your organisation Meeting materials

Agenda Questions, if not already sent Attendees, to include biographies Examples of any flowcharts and/or diagrams that you will be

asking for or referring to

Box 2 : Briefing Package

Site visit preparation is essential as benchmarking is not industrial tourism. You need to establish focus questions. You need to know and chart your own process/flow chart of the process you are going to study, so as to grasp better during the site visit on how others are doing, and why they are doing better. Keep in mind that the questions you ask will determine what information you receive; what you ask for is what you get. Consequently, your questions drive your data collection and analysis. Also, a well-written and easily understood questionnaire can increase the willingness of a partner to participate. In designing the questionnaire, organisation must consider clearly:

What kind of data and information to be collected in fulfilling the objectives of the benchmark survey

Clear, simple definitions of the information to avoid misunderstanding and enhance comparability for purposes of analysis

Pilot testing of questionnaire may be desirable

4.2.1 Questionnaire Development

It is a must to develop proper questions during the site visit. This will allows benchmarking members to focus on the area of interest. Two main types of questionnaire development can be recognised : Introduction of the benchmarking project and questions on process.

4.2 Data Collection : Site Visit

1 2 3 5 6 8 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

5 7

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4.2.2 Part 1 : Introduction Components of the introduction may include:

1. Criteria for instructions : Tell how to answer

Indicate where to answer Provide the estimated time to complete

Indicate the desired date by which the questionnaire should be completed.

2. An indication that the Benchmarking Code of Conduct will be observed, and, if necessary, a discussion on the Code of Conduct.

3. A definition (boundaries, goal, outputs, etc.) of the issue/process being benchmarked. You may want to include process maps. 4. Definitions of "technical" process terminology to be used in the questionnaire. Try to use generic wording if possible, but where it is not possible, define terms.

Profile of Organisation

(a) Name of organisation : .. (b) Address : .. .. (c) Name of Contact Person : .. (d) Designation : .. (e) Telephone Number : .. (f) Email : .. (g) Year in establishment : ..

Box 3 : Example of Questionnaire Development Part 1 : Introduction

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4.2.3 Part 2 : Designing Questions on Process Components of the questions may include:

What we want to know to be able to use the information we gather to make improvements, questions should focus on the following issues:

1. What results do 'best-in-class" companies produce that we don't? 2. How efficient and cost effective are "best-in-class" companies compared to

ours? 3. How are "best-in-class" companies work processes and methods different

from ours? 4. How do "best-in-class" companies support these processes? 5. How does the organisation of "best-in-class" companies differ from ours? 6. How are the philosophies or strategies of "best-in-class" companies

different from ours?

Types of information

To answer the questions above, we need the following types of information:

a. How well is the process performed (performance measures)? What are the measures?

What dimensions are measured? What is the current performance? What are the historical trends? How are the measures defined? How are the measures calculated? How is the data collected (how taken, frequency, etc.)? How reliable is the data? How is the data reported?

b. How is the process performed? What are the work processes and methods? What are the roles of those involved? What knowledge and skills are required? What resources are involved? Where is the process performed? When is the process performed?

c. What structures enable the performance of the process? What training is required? What is the compensation? What recognition is there? What is the organisational structure? What are the supporting communications? What are the interrelationships?

d. What is the underlying culture? What are the organisational values? What are the organisational strategies? What is the management style?

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Types of questions There are two types of questions:

a. Open-ended: Open-ended questions require people to answer in their own words. Open-ended questions do NOT have any pre-developed answers, unlike multiple choice. An essay question is an example of an open-ended question.

To maximise the potential of open-ended questions, avoid verbs like do, and is/ are. Such verbs elicit straight yes/no responses. Focus on how, what and why to elicit detailed answers.

b. Closed-ended: The person chooses an answer from the ones you have

provided. Multiple choice questions are an example of a closed-ended question. Others are yes/no questions and scales.

Use open-ended questions when:

You are in an exploratory and discovery mode You want to uncover new information and new issues you did not know

previously. The information you need is descriptive in nature, such as how a process is

performed You need input for developing closed-ended questions You are conducting a face-to-face or phone interview.

The strength of an interview is the ability to ask open-ended questions and to follow up on the answers. Asking closed-ended questions during an interview minimises the strength of the interview format. Closed-ended questions can be sent before the interview. If there are any answers to closed-ended questions which need to be discussed or clarified, they then can be discussed during the interview.

Use closed-ended questions when:

You have a good idea of what information you need The desired responses can be answered quickly

Box 4 : Rule of Thumb in Choosing the Type of Questionnaire

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Process for developing questions

Brainstorm questions.

Do a group affinity diagram.

Develop a list of goals based upon the groupings of the questions.

Develop a matrix of the goals and the questions. Down the left hand side of the matrix list your goals. Then determine which goal each question addresses and put the number of the question beside each goal.

Check that you have enough questions for each goal. Develop additional questions, if necessary.

If you are benchmarking a process, check to see that you have a balance of questions.

If you are benchmarking a process, check to see that all questions are related to a process map or a map of an organisational system.

Decide which questions are essential and which are non-essential. Delete the non-essential questions. Be ruthless. There is no room for nice-to-know information.

Redo the matrix to ensure all goals have an adequate number of questions. If benchmarking a process, check again that you have a good mix of process and process enabler questions and also that all questions are related to a process or organisational system map.

Put the questions into a logical sequence; categorise into meaningful subsections where appropriate. Begin with easy questions. Place the more important questions in the middle of the survey and the demographic questions at the end. At this point you also may identify redundancies to be deleted.

Critique the questions themselves, using the guidelines for common pitfalls in writing questions. Also check that all of your questions are impartial and non-leading.

Pilot the questions. Depending upon the outcome, you may need to rework the questions--rewriting some, adding some new ones, and perhaps deleting some. Also ask yourself, "Will my partner be capable of answering these questions?" and "Are there any reasons why a partner would not answer a question?"

Using either data from the pilot or fake data, analyse the answers to the questions. At this point you may need to rework the questions--rewriting some, adding some new ones, and perhaps deleting some. Ask yourself, "Do these questions get us the information we need?"

If necessary, tailor the question set for a specific partner. Remain open to changing the questions as you collect data. However, keep in mind that if you have already collected data from a partner, you may need to revisit them to ask any additional questions you develop later.

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Pitfalls to avoid when asking questions

Did you use words which could mean different things to different people?

In a customer survey, for example, "timeliness" can mean either that you got the product or service when the supplier promised delivery or when you actually wanted it. Such words make it impossible to interpret the results because you don't know how your partner interpreted the question.

Does the question actually ask more than one thing? Example: Did you receive your order on time and was it accurate?

Is the question too vague? Example: Is life treating you well?

Is the question too precise? Example: How much did you spend in the cafeteria five years ago?

Is the question biased? Example: Which group of idiots is responsible for the incredibly high rate of infla tion?

Is the question too demanding? Example: Below are 35 factors relating to customer satisfaction. Rank them in order of importance to yourself, your organisation, and national security.

Would you be comfortable answering this question yourself? Example: The last time you murdered someone, what type of weapon did you use?

Does the question contain abbreviations, jargon, or unconventional phrases? Example: How do you rate the effectiveness of the BAD transmogrifier?

Is the question too long? Example: How do you feel about the United States' current and complex foreign policy regarding the varied rates of tariffs on foreign goods and services coming into this country?

Are there any double negatives, which confuse people, in the question? Example: Would you not buy the lawn mower if it was not cheap enough?

Have you defined all key terms? Example: What procedures should you follow to ensure TEMPEST requirements are met?

Have you used simple and direct wording? Example: How many people on your current payroll do you pay?

Have you used moderate rather than extreme phrasing?

Example: Is the response time from your vendor all you could expect?

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What is your process?

What is the purpose/application of this process in your

organisation?

How would you describe this process?

What works/worked well?

What is/was not working well?

What major improvements are planned in this area?

Is there a flow chart for this process?

How was this process deployed throughout your organisation?

How well does this process perform over time and at multiple locations?

How do you measure process performance? What are the key

measurements?

What are your organisational values?

How much and what type of training do you provide for this process?

Box 5 : Example of Questionnaire Development Part 2 : Question on Process

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After the site visit, several critical steps should be implemented immediately :

IMMEDIATELY following the meeting, review notes and write up initial findings. This should take 1-2 hours. Ask the following questions:

What new things were learned? What differences are there between our practices and theirs? Why is this organisation successful? Did everyone come away with the same understanding? What are potential practices for implementation? What follow-up activities are needed? Do we need any additional information? Who will perform them?

Write a trip report summarising the site visit findings. The trip report might include:

Contacts within the partner company Process flows and supporting documentation Measurements related to the process Enablers and disablers which were observed and documented,

such as organisational culture, appropriate support structures and employee attitudes, etc.

Applicable practices for potential implementation Lessons learned during organisational change, if applicable

Confirm the accuracy of the trip report with the partner Send a letter of appreciation for the visit Follow up on any requests or promises to provide information

4.3 Recommend Improvement

4.4 Share Findings

1 2 3 5 6 7 9 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

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1 2 3 5 6 7 10 11 12 13 14 15 16

The 16 Steps in the MPC Benchmarking Model

5 9

The final stage of the second phase of benchmarking project is to share the best practices implemented by the best-in-class organisation. Members in the

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community will present the best practices that they have learnt during the site visit activity. A seminar can be organised to facilitate the discussion and knowledge sharing in selected areas among the members.

Subsequently, the benchmarking teams need to make recommendations to their respective organisations and implement the learning accordingly. Benchmarking process is only complete when learning and implementation have taken place. The following is an example of the best practices learnt from a site visit to an exemplary local authority and Electronic Manufacturing Services Organisations.

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Box 6 : Best Practices in Managing Municipal Solid Waste

Best Practices in Solid Waste Management Enforcement Policy and Structure

Establish and publish widely the vision for a clean city Establish legal framework for the city to exercise proper authority to

enforce regulations within the citys boundaries Establish clean and relevant local ordinance (by-laws or local laws)

for the control of Solid Waste by the city

Best Practices in Solid Waste Management Enforcement Public Awareness and Education

Make the public aware of local ordinance for the control of Solid Waste through the mass media

Use a variety of media for public awareness of regulation and of enforcement actions, for example newspaper notices, stickers, billboards, warning signs, leaflets, and radio

Provide enforcement officers with official uniforms, and prominently marked vehicles to facilitate public visibility.

Best Practices in Solid Waste Management Enforcement Resources and Proper Training

Ensure all city department involved co-operate in a coordinated program of enforcement

Provide a stable budget for the enforcement activity Provide standard operating procedures and documentation Train enforcement officers with special enforcement skills, for

example knowledge of the law, managing difficult cases, obtaining evidence, negotiations skills, persecution procedures

Best Practices in Solid Waste Management Enforcement Process Create an environment which would make littering objectionable, for

example by beautifying or rehabilitating an area first, the enforcing regulations

Ensure renewed enforcement, for example when new bins are installed in an area

Obtain defensible evidence of infringement to support legal action if required. For example photographs, witness statements, written acknowledgement by infringer

Best Practices in Solid Waste Management Enforcement Monitoring

Provide monthly reporting on inspection activity, infringements detected, fines issues, fines paid and prosecutions

Survey residents on their satisfaction with the enforcement process Survey community based organizations and residents groups on

their satisfaction with the enforcement process Monitor newspaper letters and articles, and city residents calls to

radio stations concerning Solid Waste Management Enforcement

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Box 7 : Best Practices in Human Resource Management

Box 5.9 (continued) : Best Practices in Human Resource Management

Best Practices for Administering MC Rate

Attendance bonus for staffs who have 100% full attendance (not taken any MC, NPL or AL). For full attendance, RM50.00 is paid as attendance bonus.

Medical record book to track MC seeking cases. Medical benefits for dependents are extended to Managers Company sponsors recreational activities and provide healthy food in the

cafeteria. Insurance for hospitalisation Medical charges limited to RM15.00 per visitation. If employees are kept busy, MC rate goes down Normal attendance bonus : RM120.00 per month (if no MCs or Absent cases).

A 2 weeks bracket given, where employees will get RM30 or a full RM120 or no bonus at all per month. Most of them strive to achieve the extra RM120 by being present at work.

Attendance Incentive Program is linked to overtime support and productivity numbers. Points are accumulated where employees can redeem these points for goods monthly or annually.

MCs are not recognised if medical treatments are sought for the day after more than 4 hours at work. Should such MCs arise, then only will be considered.

Panel clinics are appointed only in areas where there are at least 10 employees residing in the area.

Best Practices for Monitoring Medical Cost Provision of in-plant clinic Provision of group hospital and surgical insurance The setting of a maximum medical consultation/treatment fee. This is to avoid

clinics which takes advantage of situations. Monitor medical records of frequent MC employees.

- theres KPI to be compiled, top medical cost listing/frequent visits, if employees to frequently visiting doctors, will call up clinic for clarifications

- to avoid malingering cases, frequently sick employees are sent for medical check ups.

- Request employees to go for 2nd opinion prior to surgical. Conduct health talks by medical practitioners on health awareness. Trace medical chits, (those without chit, claims can only be forwarded with an

explanation letter). Non-panel claims, must write in explanation. Visiting doctors are Monday Friday ( 1 hour per day) No industrial nurse. No ceiling imposed and employees enjoy specialist treatment with no

limitations. Dental RM200 yearly per employee. Able to identify employees who hop from one clinic to another. Provides real-

time information. Doctors key in to system. Minimise administration works.

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Box 7 : Best Practices in Human Resource Management (continued)

Best Practices for Reducing Absenteeism Rate

HR Department tracks the employees absenteeism daily from their TMS system.

Employee absenteeism detailed report published by department weekly. Employee absenteeism rate is one of the KPIs that will be presented in the

Management Meeting. Department Heads are responsible to answer for any high absenteeism rate in his/her Department.

The supervisor will issue verbal, followed by written warning to those employees who are frequently absent from work without proper reason. If such behavior continues, this may lead to suspension or termination.

The attendance bonus will be reduced by half for direct labor or non-exempt employees who are absent from work for 1 day. No attendance bonus will be paid to those who are absent for more than 1 day.

The low head count in the company creates rapport/close relation between supervisors and subordinates. The employees are comfortable to highlight their problems to their supervisor and the supervisors are willing to provide advice as well as counseling to the subordinates.

Absenteeism Rate for Indirect Labor (