Benchmarking’s main value may lie in convincing organisations that they need to change, says Assetivity managing director Sandy Dunn
Benchmarking was a hot topic in the early 1990s. It was seen as the next “big thing” in business improvement. Benchmarking offered the opportunity for large-scale, step improvements in performance. And it was supposed to provide these gains with relatively little effort, as it involved learning from the best organisations, and copying what they did.
Everyone was “doing” benchmarking, or talking about doing it. Governments were even assisting private enterprises to do it.
Like most over-hyped techniques, the bubble soon burst, and benchmarking was in serious danger of becoming viewed as yet another of those “flavour of the month” management consulting-driven fads that would quickly sink into oblivion.
With the passage of time, however, benchmarking has not disappeared into the realms of folklore. Most organisations that I have worked with over the last 25 years still, from time to time, ask for benchmarks against which they can assess their performance.
So why would a maintenance organisation or department want to benchmark the activity? What are the potential benefits? Before answering those questions, let’s be clear about what benchmarking is.
What is benchmarking?
There are a number of different definitions of benchmarking, which all have a similar flavour but a slightly different emphasis. The definition that I prefer is as follows:
“The process of comparing performance with other organisations, identifying comparatively high-performance organisations, and learning what it is they do that allows them to achieve that high level of performance.”
The key aspects of this definition are that:
- Performance is measured – this implies the existence of quantitative, identically defined performance measures
- High performance organisations must be identified – this requires some knowledge of those organisations, as well as a willingness on their part to be prepared to share their data and practices with others
- It recognises that it is not sufficient merely to compare performance – to be truly effective, benchmarking involves gaining an understanding of why those organisations do well, and, as a result, what you need to do to achieve similar performance.
The last point is particularly important. It is easy to get hung up on the quantitative comparison of performance to the exclusion of gaining a true understanding of how high-performance organisations achieve the results they do, whether the measures they use are defined in the same way as yours, and whether those practices could be introduced in your own organisation.
So why benchmark?
In theory, benchmarking provides benefits in the following areas:
- Improved understanding of business processes
- New ideas leading to improved business performance
- The ability to fast-track improvement initiatives by using knowledge already held by “best-practice” organisations.
In practice, in my view (and there may be many that disagree), the benefits in these areas are frequently oversold, the difficulties of conducting effective benchmarking hard to overcome, and implementing the identified improvements often more challenging, expensive and time-consuming than imagined. However, one benefit of benchmarking, which, in most organisations, is sufficient in itself to warrant undertaking some form of the activity, is to generate broader recognition of the need for any improvement at all.
In many organisations, there is a general perception that “things are OK as they are”, and therefore “if it ain’t broke, don’t fix it”. The feeling is that, if there are improvement opportunities, they are comparatively small. Benchmarking often shatters that illusion.
For example, John Campbell’s book Uptime: Strategies for Excellence in Maintenance Management (Productivity Press, 2015), quotes the case of a European microchip manufacturer which had set itself what it thought to be a daunting goal – to double a production line’s mean time between failures from 24 to 48 hours. However, when it did some comparisons with similar production lines in Japan, it discovered that reliability on those lines averaged 200 hours. Instantly, the goal of 48 hours became obsolete – the production line could not possibly hope to be competitive, let alone a world leader, if it achieved such a low level of performance.
The change process is often described as consisting of three phases – unfreezing, changing and refreezing. In order to “unfreeze” an organisation there needs to be a common recognition that it needs to change. Benchmarking has a vital role to play in this area.
Benchmarking can be used to provide the basis for an “imperative for improvement” within the organisation. This, in my view, is often its major value. But the challenges of obtaining relevant benchmarks still remain.
Sandy Dunn is the founder and managing director of Assetivity, one of Australia’s most respected maintenance and asset management consultancies. He has over 35 years’ experience in helping organisations improve their productivity through more effective maintenance and asset management. He has extensive experience in the mining and mineral processing, oil & gas, utilities, transport and heavy manufacturing sectors.