Six Sigma Black Belt Study Guides

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1 Six Sigma Black Belt Study Guides 1 Powered by POeT Solvers Limited.

2 Introduction to Six Sigma Benchmarking 2 Powered by POeT Solvers Limited.

3 Index Introduction Different types of Benchmarking Competitive, Collaborative, Internal, Functional Benchmarking. Steps in Benchmarking 3 Powered by POeT Solvers Limited.

4 Introduction Benchmarking is the technique used to measure an organization s performance by comparing its performance with the performance of the best-in-class organization. An organization can also carry out internal benchmarking, where the performance of a division is measured against the performance of the best division in the organization. Benchmarking helps an organization to identify, understand, and adopt the ways to improve its performance. And helps the organization to conduct an objective assessment of its business. 4 Powered by POeT Solvers Limited.

5 The information for benchmarking can be got from various sources like research papers, organizational meetings, customer feedback, analysis of competitors performances, etc. The information from benchmarking is required to outline an organization s strategies, requirements, and implementation plans and improve overall quality. Benchmarking provides inputs to an organization regarding their current process levels and where they stand in relation to the best industry practices. It enables an organization to decide on the areas of improvement and the rate of improvement required to match the performance of the best in class organization. 5 Powered by POeT Solvers Limited.

6 Types of Benchmarking Different types of benchmarking are as follows: Performance or Competitive Benchmarking It deals with examining a company s competitive position in relation to competitors on the basis of quality, credibility, speed, and other features of essential products and services. It gives an organization an external perspective on the current and expected performance levels. Functional Benchmarking It compares a similar function or functions of an organization with the similar functions of organizations across different industries in order to improve the functions. It provides an opportunity for an organization to assemble partners from diverse industries for benchmarking similar functions. 6 Powered by POeT Solvers Limited.

7 Internal benchmarking It compares the performance of a department of an organization with that of the best performing department in the same organization. Though internal benchmarking provides some new insights on how to improve the performance, the scope for improvement it can provide is limited because of factors like rules, customs, tradition, etc. of the company. Collaborative benchmarking It refers to collaboration of different functions of an organization or different functions of different organizations of an industry with the aim achieving benchmarking results. It provides scope for collaborating with various benchmarking partners that other forms of benchmarking do not provide. 7 Powered by POeT Solvers Limited.

8 Steps in Benchmarking Benchmarking employs a structured and systematic methodology for the Benchmarking employs a structured and systematic methodology for the successful achievement of comprehensive investigations. Robert C. Camp (an expert in benchmarking) divides the process of benchmarking into the following steps: Planning, Analysis, Integration, and Action. Planning Determine the essential business, products, and outputs to be benchmarked. (Please note that business metrics can be benchmarked against corresponding business metrics. Similarly products should be benchmarked against corresponding products etc.) Choose the best-in-class organizations (the organizations having the greatest degree of customer satisfaction at the lowest cost) for comparison. Choose appropriate data collection techniques to gather data. 8 Powered by POeT Solvers Limited.

9 Analysis Identify the existing performance gap between the organization and the best-in-class organizations. Develop the future level of performance on the basis of benchmarking results. Integration Communicate the findings of the early stages and gain recognition. Establish functional objectives associated with the organization s overall vision. 9 Powered by POeT Solvers Limited.

10 Action Develop an accurate plan of action with all the elements involved such as the time line, accountable owners, and targets. Implement those programs and actions. Develop a process to monitor the progress of the plans. Review and update knowledge on existing work practices. Recalibrate measurements in future benchmarking studies Powered by POeT Solvers Limited.

11 In this chapter, we have learned about: The concept of Benchmarking Different types of Benchmarking Competitive, Collaborative, Internal, Functional Benchmarking. Steps in Benchmarking 11 Powered by POeT Solvers Limited.