How benchmarking accelerates continuous lean manufacturing improvement

The point persons essentially sort out the details before the benchmark teams meet. Who shares process information first? Will you do the benchmark meeting by conference or video call or site visit? Or will you simply share data about each other’s processes via email? Any of these ways and more are acceptable as long as it meets everyone’s needs. Getty Images

One thing you can say about a successful lean journey, you never stop learning. Another truism: You must exhibit humility, both as an individual and as an organization. Sometimes you run into a roadblock. You stop learning and you cease to be humble. What are the signs this might be happening? Perhaps you cease to be curious. The passion to improve has plateaued. Everything is just business as usual. Perhaps everybody is just too comfortable.

Benchmarking can help break through the plateau and coziness. If done right, benchmarking can be a tremendous source of new ideas, a confirmation of current practices, and an exciting catalyst to take performance to much higher levels. If done haphazardly, benchmarking is simply a scenic journey that wastes most people’s time. Let’s explore how to do benchmarking right.

What Is Benchmarking?

Benchmarking is a structured way to compare products, strategies, programs, and processes. To focus the discussion on the lean journey, we will zero in on process benchmarking. This involves identifying which processes need improving, understanding how other organizations perform their processes to achieve targeted performance, and converting this newfound knowledge into action. The goals are to harvest improvement ideas that will make a difference to your business and develop actionable ideas for process improvement.

There are three types of benchmarking, each with its own focus and nuances. Internal benchmarking looks within your own plant or perhaps sister plants; competitive benchmarking looks at direct competitors within your industry; and functional benchmarking compares similar processes (welding, cutting, etc.) at a noncompeting company in another sector.

Each type of benchmarking also has a benchmarking partner. For internal benchmarking, the partner could be another production line in the plant; for functional benchmarking, it’s a company outside your competitive playing field; and for competitive benchmarking, it’s a direct competitor.

For competitive benchmarking, partner collaboration might be limited or nonexistent, depending on the nature of the competitive relationship and the metrics being benchmarked. But for internal and functional benchmarking, the partner will almost certainly benefit from the benchmark initiative you launched. This win-win proposition is essential for both parties to stay engaged and interested.

How to Structure Benchmarking

Before launching a benchmarking initiative, you need a reason to do so. It could be a process weakness or a catalyst to jump-start to the next level of performance. Whatever the reason for benchmarking, you and your management team should know it and be aligned around it.

A solid starting point for formal benchmarking is to create a project charter that clarifies the purpose of and expectations for the initiative. It defines the project background, scope, approach, timing, and outcomes. And it instills discipline and structure into the project right up front.

Next, identify your potential benchmark partner. In most cases, the partner will not be a direct competitor. Instead, the partner will probably come from a different industry but has a process similar to the one you’re targeting. The partner might even have similar business challenges. Once you’ve identified your benchmark partner, develop a joint project charter that clearly defines how the two parties will work together.

Next, identify the people involved, including a benchmarking team and point person. People have other jobs, of course, so these are part-time roles. That’s why structure is so important; you don’t want to waste anyone’s time.

Each benchmarking partner has a point person. As the benchmarking process owner, the point person is the focal point for communicating, scheduling, and coordination. The person makes sure the right people are involved throughout the process and documents outcomes and lessons learned. The benchmarking team should be cross-functional. Its players should come from a variety of organizational levels and have a vested interest in the target process.

To effectively benchmark, you must have a firm grip on the current-state performance of the target process. Develop a process map; define and measure the process performance; use cause-and-effect diagrams to analyze issues; define the process weaknesses; and develop the future state. In short, you must understand your process thoroughly before you look at someone else’s process.

Next, the two benchmark point persons start coordinating interactions. They develop an agenda and jointly decide what and how to share information. They might even do a virtual or a physical gemba walk.

The point persons essentially sort out the details before the benchmark teams meet. Who shares process information first? Will you do the benchmark meeting by conference or video call or site visit? Or will you simply share data about each other’s processes via email? Any of these ways and more are acceptable as long as it meets everyone’s needs.

When the teams meet, they should follow an agenda to learn about each company’s perspectives, challenges, and best practices. The teams ask questions and really dig into the process topic. This might involve detailed discussion about a process flow, method for performing a certain task, or the exact resources those tasks require. A designee should take thorough notes to document key points and lessons learned.

As the benchmark meeting draws to a close, one point person provides a recap. He or she then asks for next steps, thanks everyone, and brings the meeting to a crisp adjournment.

In some cases, benchmarking partners have only one or a few meetings or interactions. That’s perfectly acceptable if it meets the objectives set forth in the charter, and everyone got what they sought, be it technical insight, technical or process knowledge, or anything else. In other cases, benchmarking partners meet indefinitely as they dig deep into targeted processes, or as they jointly analyze the end-to-end process. Wherever you fall on that spectrum, expect benchmarking to be a catalyst to accelerate improvement.

Benchmarking Done Right

Suppose your company is a heavy fabricator of complex weldments and you are not satisfying a major OEM customer. Confusion between engineering and production has resulted in missed shipments and defects caught at the OEM’s assembly line. Among the many alternatives for tackling the problem, you think benchmarking could be the most effective.

You have a benchmark partner in mind. Producing different products, it’s not a competitor, but it does perform heavy fabrication of complex weldments. Further, the company serves a different industry and has very different customers, so there is little risk of poaching each other’s business.

Your CEO knows their CEO. With that high-level connection, you reach out to determine interest in benchmarking the engineering-to-production process. Turns out they have some of the same issues and are very willing to establish a benchmarking partnership.

Point people collaborate on the project charter and get organized. Both companies document the current state and objectively evaluate the performance of the target process. Your benchmarking team includes the production manager, the production supervisor, a manufacturing engineer, a product engineer, a final assembly welder, and a customer service rep—plus, of course, the benchmarking point person.

Your benchmark team travels to the partner’s plant on the other side of town. Everyone knows the agenda, which was sent ahead of time. It spells out the meeting’s focused topic: how to handle tolerances that appear to be overly restrictive. All players are on the same page.

The visit starts with a quick gemba walk through engineering and production. In the conference room, both parties give process overviews and describe the challenges they face regarding the meeting’s focused topic—which again is on restrictive tolerances. The conversation begins, and the questions commence. How early do you recognize a tolerance is too tight? How do you engage the customer in the tight-tolerance discussion? What process engineering approaches do you use in the tight-tolerance situations? How do you handle the costs of those tight tolerances?

Turns out your benchmark partner has some creative solutions that your team hasn’t identified, while your team has insights that benefit your benchmarking partner. Everyone comes away with ideas that can be implemented—and everybody wins. Both teams recognize there is more territory to cover, so they decide to continue with a visit to your company in two weeks.

During the meeting, the point persons documented the knowledge gained. Soon enough, those documented ideas turn into actionable improvement plans, accelerating improvement.

You Don’t Have All the Answers

Most companies will hit a plateau at some point on the lean journey. There comes a time for an infusion of new ideas or the need for a catalyst. Benchmarking just might be an economical and effective way to make that happen.

If you are determined to never stop learning and have the humility to recognize that you do not have all the answers, then you might want to give benchmarking a try.