Why some industrial organizations find benchmarking difficult

Benchmarking, in the simplest terms, involves comparing performance to peers, understanding gaps in operations, and taking steps to close those gaps and improve performance. Unfortunately, it is not as simple as it sounds.

03/06/2013


The concepts behind benchmarking research for industrial operations have been applied successfully by many leading organization in the world. However, many companies still struggle with the basics. Benchmarking, in the simplest terms, involves comparing performance to peers, understanding gaps in operations, and taking steps to close those gaps and improve performance.

 

 Unfortunately, it is not as simple as it sounds. Below are the top three challenges I’ve seen industrial organizations face while benchmarking operations.

 

 

 

Granularity: Benchmarking research is too general or too specific

 

Often the topic that needs to be benchmarked is too general or too high level, which makes it difficult to take specific steps for improvement. A good example of this is benchmarking “operational excellence.” This means many things to many different companies and it’s difficult to garner real, actionable steps for improvement when companies look to benchmark such a topic.

 

On the other extreme, there’s a similar issue if the business process that needs to be benchmarked is very specific. For any benchmarking process to be successful, it’s critical to understand how the outcome of the process impacts the key goals of the division or plant or even the overall organization. This, in turn, means specific is good, but that can make the quest for data very challenging.

 

A good example of this would be trying to benchmark the throughput and mean time to failure metrics for a very specialized piece of machinery in a specialized industry. All I can say is good luck getting a statistically relevant sample in such a case.

 

 

 

Data: Availability, quality, statistical relevance, and more.

 

The second key challenge with benchmarking industrial operations is data. If all data had the following characteristics, benchmarking projects would almost always run smoothly:

 

  • Easily available

  • In one central location

  • Using common definitions

  • Having a statistically relevant sample size

Unfortunately, this is not the case and it takes a lot of hard work to get there.

 

For example, if you’re planning to benchmark the quality processes of five plants in North America, and there is no consistency in the way data is collected across these plants or how metrics are defined, it will be an uphill battle. In such a case, it becomes very challenging to effectively execute the benchmarking process internally and even harder to do it externally.

 

Getting value from the results

 

The final challenge has two parts and focuses on the way the results of the benchmarking process are utilized. This stage is often more important than the benchmarking process itself.  If what you learn from the results of the benchmarking process isn’t applied to the business, the entire exercise may have been done in futility.

 

The first challenge is in understanding which actions need to be taken based on the results and also how to execute these actions. To accomplish this effectively there needs to be buy-in from all levels of the organization as well as the right culture in place to accept the change due to the new actions.

 

The second part of this challenge lies in answering the question, “What happens next?” Organizations that think about the benchmarking process as a one-time exercise are likely to fail. The key to the success of any benchmarking process is in setting up a culture and process of continuous improvement.

 

The real value of a benchmarking exercise is delivered when you learn from the results of the program, apply those recommendations, track the success of the actions, and continuously improve based on the results of those actions.

 

Matthew Littlefield is principle for LNS Research will be holding the first meeting for the Global Quality Advisory Counci in March. For more informnation, click this link.



Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
How to use IPD; 2017 Commissioning Giants; CFDs and harmonic mitigation; Eight steps to determine plumbing system requirements
2017 MEP Giants; Mergers and acquisitions report; ASHRAE 62.1; LEED v4 updates and tips; Understanding overcurrent protection
Integrating electrical and HVAC for energy efficiency; Mixed-use buildings; ASHRAE 90.4; Wireless fire alarms assessment and challenges
Power system design for high-performance buildings; mitigating arc flash hazards
Transformers; Electrical system design; Selecting and sizing transformers; Grounded and ungrounded system design, Paralleling generator systems
Commissioning electrical systems; Designing emergency and standby generator systems; VFDs in high-performance buildings
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me