APPLYING BENCHMARKING METHOD IN COMPANY AD ALPRO,VLASENICA

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1 I International Symposium Engineering Management And Competitiveness 2011 (EMC2011) June 24-25, 2011, Zrenjanin, Serbia APPLYING BENCHMARKING METHOD IN COMPANY AD ALPRO,VLASENICA Jelenka Vitomir, Msc * AD ALPRO, ALUMIL Group, Bosna and Hercegovina j.vitomir@alpro-vl.com Vladan Nastic, Msc BH Aluminium, ALUMIL Group, Bosna and Hercegovina v.nastic@alumil.com ABSTRACT: Any organization that has the vision and desire for improvement can be achieved directly benefit from benchmarking. He can run changes in the system and help company in different segments. Benchmarking is a method, discipline and a tool that helps us to be involved in competition game with a realistic basis and then systemic build a better position. In this papers described the use of external benchmarking in company ALPRO AD. External benchmarking is a comparison with competitors in the same industry, or the techniques of comparative analysis of their own business operations with the best organization. The main goal of benchmarking was to significantly increase sales by improving the architectural system of aluminium profiles, elements of the marketing mix, as well as repeater Alumil brand in the market of Bosnia and Herzegovina. Based on analysis of past activities of the company AD ALPRO and activities of the competition was proposed activities that are necessary to realize, with an explanation of the effects of each of these activities. Key words: benchmarking, market researching, aluminium extrusion, aluminium profiles. INTRODUCTION Aluminium is now utilised for a host of application in building and construction and it is the material of choice for curtain wall, window frames and others glazed structures. It is used for rolling blinds, doors, external cladding and roofing, suspended ceilings, wall panels, partitions, solar shading devices, etc. Aluminium profiles are obtained through the extrusion process, which consist of pushing a hot cylindrical billet of aluminium through a shaped die. Aluminium building products are made from alloys that are weatherproof, corrosion- resistant and resistant to harmful effects of UV rays. Figure1: Aluminium building products ( 75

2 Aluminum provides a high degree of prefabrication, which significantly reduces the work on the site. Aluminum structures are extremely stable, durable and thermally efficient. During 2009.year, work on drafting new laws, regulations and standards for construction and building products, with the aim of creating a united European market, is intensified. Introduced the CE marking for building products requires from manufacturers of aluminum windows, doors and curtain walling to use the certificated systems of architectural profiles. Aluminium system companies design and test complete window and curtain wall solutions in accordance with European and International Standards. Today's market situation is characterized by strong competition and the numerous changes in the environment. What is the fact in the modern business environment is that it will succeed only those companies that have learned how to quickly and successfully adapt and change to new situations dictated by the market. EXTERNAL BENCHMARKING When you know yourself and others, you will never be in danger; when you know yourself but not others, you have a half chances for victory, and when you do not know yourself or others you are in danger in every battle. Sun Tzu, The Art of War Benchmarking is a continuous process of identifying, understanding and adaptation of products, services, equipment and procedures of companies with best practices to improve their own business (Adamovic & Sajfert, 2009). The objective of benchmarking is to understand and evaluate the current position of a business or organisation in relation to "best practice" and to identify areas and means of performance improvement. Benchmarking provides many benefits and substantially helps in the design business goals and management. Basic principle of this process is to see what market leaders are working to improve their business and try out collected data from their business processes and to integrate everything that can to improving their business. Benchmarking is not a substitute for a strategy, it is no improvement of business, but it is the most effective way of achieving a personal goal - business success. Benchmarking process consists of: - Comparison of the organization and its parts with the best; - Comparison of production and other activities of the organization with competitors; - Comparison of products with products of competitors; - Comparison of technical solutions in order to select the best equipment; - Implementation of best business processes; - Planning and actively adapting to new trends. The essence of benchmarking is to gain knowledge, to adapt them to their own needs, to upgrade, improve and put into operation a successful business in their own organization. There are several types of benchmarking processes, each defined goals and objectives to be investigated. According Besic, HC, (2006), they can be divided into the following processes: - Internal benchmarking; - External benchmarking; - Competitive benchmarking; - Functional benchmarking; - Generic benchmarking. 76

3 External benchmarking involves analyzing of other organisation that are known to be best in class. External benchmarking provides opportunities of learning from those who are at the "leading edge". This type of benchmarking can take up significant time and resource to ensure the comparability of data and information, the credibility of the findings and the development of sound recommendations. External benchmarking, also, can be: - Competitive compare their own business with direct competitor in the sector, preferably the best in the sector; - Functional - compare their own operations with the operations of companies from different types of industries that have the best functional operations, the goal is to determine the ideal behavior; - Generic - the emphasis is on fundamental business processes, and the partners are from different economic sectors related willingness to introduce changes, the goal is to discover innovative processes; - Strategic-focus on the adoption of strategies of top companies and refers to general social objectives. Application of benchmarking involves four key steps (Adamovic, Z., Sajfert, Z., 2009): 1. Planning - indicates the direction of movement, destination and how to arrive there. The essential steps are those of any plan development: what, who and how. 2. Analysis in this step is important to provide support for strategic management.the analysis phase must involve a careful understanding of your current process and practices, as well as those of the organizations being benchmarked. What is desired is an understanding of internal performance on which to assess strengths and weaknesses. 3. Data collection (visits, observations and interviews and secondary data); 4. Data processing and determination of the gap that exists between their own process and the best process, making the action plan, implementation of action plan and monitoring process. Benchmarking is not expensive method for the implementation in the company. Some of the basic costs that can be expected are the following: * Travel costs already is noted that the most effective way of benchmarking to send teams to study the production processes or services of other company. Learning new ways, certainly, is not possible in a few days so the cost of accommodation, travel and other travel expenses must be counted as part of the preparation phase of implementation of benchmarking in the company. * Spent time - teams consist of people who will be able to acquire new knowledge and technology easy. Depending on the industries in which it carries out benchmarking, it is evident that the company will send an experienced training managers, analysts, engineers, who will be able to transfer news to others employees in the company. Use the creative talents of the people who actually perform work tasks to determine how the findings can be incorporated into the work processes.these people in mean time should be replaced by people who are mature enough for their tasks in the company. * Database - a company that introduced benchmarking usually create a database that serves as the theoretical support of good practice from companies that are observed. APPLYING EXTERNAL BENCHMARKING METHOD IN THE AD ALPRO Vlasenica Decrease in sales in year compared to sales achieved in 2006.by 9%, was the main indication that has come time for change. The main aims of the application of benchmarking were to significantly increase sales of architectural series of profiles by improving elements of the marketing mix, creation and promotion of Alumil brand in Bosnia and Herzegovina. In addition, the aim was to improve relationships with 77

4 clients to achieve success of company and clients. Benchmarking team was formed. Team consisted of six members: - Project Management-Marketing Director - Preparation and Analysis- Technical Support Manager - Organization of visits- Sales Manager - The team on-site- Regional Sales Managers (Sarajevo, Vlasenica and Banja Luka area). According to the benchmarking plan, products, distribution and promotional activities are subjected to the benchmarking process. Information about products, distribution and promotional activities are collected from customers who work with competing companies, followed by visits to project offices, architectural and engineering colleges, the review of specialist magazines for the construction and architecture, through internet visiting web pages of competitors, from interviews with consultants and distributors of windows and doors accessories. Analysis of environment identified the needs of existing costumers and needs of potential customers of aluminium profiles on Bosnia and Herzegovina market. Comparison of the distribution was done with The Alukönigstahl Company. The KÖNIG Group is an international trading concern dealing in construction sections, hollow steel sections, shaped and oval tubes. The main focus of their business operations is on the expanding markets of eastern and southeastern Europe. It offers to partners a comprehensive range of products and services at all stages of their construction projects. The spectrum ranges from advising on the choice of materials to planning, design, applications engineering and assistance with implementing each construction project. This approach - taking the visions of both architects and owners into account whilst at the same time working in close cooperation with processing companies - enables them to realize constructions that are both futuristic and economical. The products were compared with the products of the company SCHUCO. SCHUCO is a company that is not owned production facilities for aluminum extrusion, but it is the world's largest company that develops and sells aluminum extrusion profile obtained. Production program includes products for the entire facade of the building, whether it be on residential construction or large industrial and commercial building. SHUECO all activities focused on continuous product development. The company is able to create customer needs. Customers are offered by an attractive solution for saving energy and using renewable energy sources, combining them, with emphasis on automation, with safety and good design. The company works closely with architects and developers. All products have the necessary certificates of authorized institutes. In addition, these products meet also, noncommercial purposes, such as status, comfort and style. SHUECO technological level of products is above average and is associated with constant innovation, which allows relatively high sale price. The company is focused on controlling and developing key products, and uses his position to shape the needs of clients. Technological strategy of the company is always associate products and architecture. Long-term investment strategy of the company is to improve the architecture. By analysing the gathered information, company identified the deficiencies in the existing production program, which affect on the functional and aesthetic characteristics of the product. Deficiencies are classified into several groups, bearing in mind the place and cause of their occurrence: Production process- appearance of the profile surface, irregularities in the profiles, poor quality of anodized profiles, inadequate geometry of the profiles; Packaging- uneven packaging of profiles, inadequate packaging of accessories that produced in company; 78

5 Incomplete offers of accessories and supporting materials and tools. Proposed activities are directed towards finding solutions for better packaging of profiles and accessories. In this activity, special attention was on the design and functionality of packaging. Products - the development of new architectural system, the elimination of deficiencies in existing systems and their partial redesign and innovation, finding new use of existing systems and profiles; Analysis of customers' demands and competitors' offer, in the product range have been introduced following system profiles from Alumil production: - Lightweight system without thermal break for doors and windows, - Lightweight system for doors and windows with thermal break, - Sliding system with thermal break, - Accordion system without thermal break and - Accordion system with a thermal break. The introduction of these systems filled the market segment that prefers a cheaper solution than to allow existing systems (systems with lightweight profiles for doors and windows with or without thermal break), and in addition they offered to the market systems that have a new application. Following the trend of constructing energy efficient buildings in the product range introduced new high isolated architectural systems with thermal break. This approach would have a significant tool in the conduct of a very strong strategy of introducing new products on the market that give results. The concept itself provides that the minimum cost (costs are reduced mainly to the cost of tools) get a whole range of new systems that with adequate promotion, bring very positive effects. Distribution-Taking into account the action of competition, the experience in distribution and efforts to expand markets, Alpro was suggested to proceed with the development of distributive networks. Promotion-Promotional activities would be significantly strengthened. The concept of promotional activities was on highlighting the changes and new features in offer and promotion of ALUMIL brand. Promotional activities implemented in four fields: - Promotion activities aimed at manufacturers of doors and windows, - Promotion activities aimed at consulting company, - Promotion activities aimed at the larger construction companies and - Promotion activities aimed at strengthening the Alumil brand Promotion was carried through: fairs, printed product brochures, printed promotional materials, special issue of publications, advertising in specialized magazines, creating specific campaigns and presentations. It is necessary to develop a strategy of appearances in the case of large projects. In addition, it is necessary to develop a strategy and approach to architectural project offices as well as for larger construction companies CONCLUSION Proposed activities have led to changes in the organization itself. Company established a trading enterprise BH Aluminium, with logistic services, sales and technical support. Warehousing service, operational activities in sales are separate from creative works of sales, thus avoiding hiring sales staff on operational matters. Warehouses and operational jobs are in logistics service. Sales team became carrier of animating customers activity, establishing contacts, negotiating, customer information, conducting research. Department for technical support through training of clients, providing technical assistance in the design, preparation and execution of works, providing certificates, tender documents, technical documentation and instructions provided a complete service to customers. Technical support has become a source of information and the department responsible for upgrading of existing systems as well as the source of information for the development of new systems. New forms of cooperation which enabled the development of 79

6 information technology, enabling react in a very short period of time and perfect fulfill the needs of final users of goods and services - at the same time keeping in mind their personal involvement in creating the product, and the interaction of business partners to create products at the moment when need for them appear. The results were increased sales in 2008 compared to the sales achieved in 2007 by 61%. The trend of sales growth continued in There has been an increase of 29% compared to 2009.year. In relationship between the old architecture system to the new systems was 1:2.73 kg, in, 2010, the relationship was 1:5,37 kg. Benchmarking is a method to support management and decision making that is based on a strategy to improve quality, only permanent (PR) evaluation and improvement of their activity, a means of learning and development. Therefore, the benchmark continues to apply. REFERENCES Adamovic, Z., Sajfert, Z., (2009), Reenginering, Technical Faculty Mihajlo Pupin, Zrenjanin Besic,H.C.,(2006), Benchmarking-The way to business exellece, Zadužbina Andrejević, Belgarde. 80