Guidebook Benchmarking PDF

Guidebook on
Benchmarking
for Best Practices
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Copyright2013 by MPC:
Malaysia Productivity Corporation, Malaysia
May not be reproduced without written permission from MPC.
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Table of Contents
1.0 An Overview of Benchmarking
Definition of Benchmarking, Benchmarks and Best Practices
Critical Success Factors For Benchmarking
Benchmarking Code of Conduct
1
5
8
2.0 Internal Preparation Prior to Embarking on a Benchmarking Project

The Importance of Leadership Commitment
Benchmarking Resource
Benchmarking Team Development
Benchmarking Model
11
13
14
18
3.0 Phase One of the MPC Benchmarking Model (Benchmarks)

Start
Agree on Benchmarking Topic
Finalise on Scope, Measures and Definitions
Data Collection : Survey
Share Strengths
20
23
24
26
33
4.0 Phase Two of the MPC Benchmarking Model

Site Visit Preparation
Data Collection : Site Visit
Recommend Improvement
Share Findings
34
40
47
47
(Best Practices)
5.0 Phase Three of the MPC Benchmarking Model (Implementation)

Planning for Adapting Best Practices
Implementation of Best Practices
Monitoring the Result
Standardisation
Daily Control
54
55
56
57
58
6.0 Conclusion
7.0 Glossary
59
60
Table of Contents
Figure 1 : Benchmarking Overview
Figure 2: Examples of Benchmarks
Figure 3: Examples of Best Practices
Figure 4: Business Process Classification Framework
Figure 5: Benchmarking Process
11
Figure 6: A Typical Benchmarking Team Structure
16
Figure 7: MPC Benchmarking Model

Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by
the Textiles CoP
Figure 9: Operational Structure: Interactive e-Benchmark
19
Figure 10 : Competitive Scores Report
31
Figure 11 : Ranking Report of e-Benchmark
25
29
32
st
Figure 12 : Human Resource Dashboard for Direct Labor in 1 Half of 2002.
33
List of Checklist
Checklist 1 : To Establish Priorities of Benchmarking
Checklist 2 : To Assess an Organisations Readiness for Benchmarking
10
Checklist 3 : Resources and Personal Involvement
12
Checklist 4 : Leadership Commitment
13
Checklist 5 : Managing the Resources
13
Checklist 6 : Team Preparation
17
Checklist 7: On-Site Interview
35
Checklist 8 : Before the Site Visit
37
Checklist 9 : During the Site Visit
39
Checklist 10 : Planning for Adapting Best Practices
55
Checklist 11 : Implementation of Best Practices
56
Checklist 12 : Monitoring the result
56
Checklist 13 : Standardisation
57
Checklist 14 : Daily Control
58
List of Checklist
10
12
13
13
17
35
37
39
55
56
56
57
58
List of Box
Box 1 : Textile and Apparel Benchmarking Questionnaire
28
Box 2 : Briefing Package
40
Box 3 : Example of Questionnaire Development Part 1 : Introduction
41
Box 4 : Rule of Thumb in Choosing the Type of Questionnaire
43
Box 5 : Example of Questionnaire Development Part 2 : Question on Process
46
Box 6 : Best Practices in Managing Municipal Solid Waste
49
Box 7 : Best Practices in Human Resource Management
50
Box 8 : MPCs Best Practices Sharing Tools
52
Box 9 : MPCs Best Practices Sharing Tool (continued)
53
List of Table
Table 1 : Human Resource Benchmarks for 1st of 2002
32
1.0 An Overview of Benchmarking

1.1 Definition of Benchmarking, Benchmarks and Best Practices
1.1.1 What is Benchmarking?

Benchmarking is a systematic and continuous process of searching,
learning, adapting and implementing the best practices from within your
organisation or from other organisations towards attaining superior performance.
Malaysia Productivity Corporation
Benchmarking is defined as the practice of being humble enough to admit that

someone else is better at something and being wise enough to try to learn how to
match and even surpass them at it."
Quality Digest, July, 1992
Know Yourself
The purpose of benchmarking is to improve our own performance. We must first
understand our customers, processes, organisational structure and culture. It is with
this knowledge that we are ready to learn how others perform better.
Learning to Learn
In a sense, it is the ultimate reality check. How can we know how well we do
something unless we have a basis from which to compare ourselves with others?
We can adapt what we have learned by continuously improving our performance.
Not Mere Copying
Benchmarking is not simply copying what works for others nor adopting similar
systems or processes in a follow-the-leader attitude. An organisation could not
emerge as the best-in-class by merely copying the other best practices of leaders in
industry. This is because the mere adoption of teefficientchniques and best
practices would not make that particular organisation most , instead it just becomes
only as good as the other organisations.
Benchmarking as a Knowledge Management Tool
In simple terms, benchmarking is an analytical tool used to measure and compare
business operations, functions or processes against best-in-class performers.
Benchmarking in itself does not result in improvement. Instead, it identifies
shortcomings, or inefficiencies, in the product, process, system, or organisation.
The real challenge and opportunity, therefore, is to leverage the knowledge gained
from benchmarking processes into competitive advantage for the organisations.
Figure 1 : Benchmarking Overview
BENCHMARKING
is
To know your position/operation

To know the industry leaders and
competitors
To incorporate the best
To gain superiority
A continuous process
A methodical method
A source of breakthrough
A learning opportunity
An objective analysis
A process-based analysis
A management commitment
is not
Only competitive analysis

A cost-cutting exercise
A cost-cutting exercise
Number-crunching
Site briefings and industrial
tourism
Just copying or catch-up
A management fad
Reinventing the wheel
A free ride
A panacea
Just a numbers game
1.1.2 What is Benchmark?

A benchmark is a measured best-in-class achievement, recognised as the
standard of excellence for a particular process. The term benchmark originated
from the geographic survey, the process of taking a measurement against a specific
reference point. Some researchers maintained that "benchmarking" could be traced
back to the Guilds of the Middle Ages, where cobblers used their work benches to
measure the shoe sizes of key customers. These cobblers would then display their
best products and other guild members and apprentices would seek out the best
cobblers to understand the best practices and techniques so as to improve their
own product.
As benchmarking implies quantitative measurement, the best results become the
benchmark reference against which you assess your own companys performance.
Measurement is critical to help you measure and monitor how big the gap is
between your current operations/performance and that of the best practice
organisations.
Figure 2: Examples of Benchmarks
1.1.3 What is Best Practices ?

Best practice is a relative term indicating outstanding business practices which
have been identified as contributing to improved performance significantly in
leading companies.
Best practices as those which have shown to produce superior results; selected by
systematic process and judged as exemplary good and successfully demonstrated. It is a
best practice:
When it leads to superior results or performance
When it involves new or innovative use of resources such as manpower or technology
When it is organised by a reputable individual or organisation
Figure 3: Examples of Best Practices

MAS Electronic Ticketing (MASET)
Calling MAS Reservation to make a booking

Effecting payment at any Maybank or Mayban Finance ATM
Presenting the transaction Slip for check-in before boarding the flight
The sample process saves time, energy and effort
Deliver Products
Establish, track and evaluate quality and productivity measures for

internal and external delivery services
Design efficient routing schedules to maximize use of transportation
asset
Integrate delivery process with other functions (marketing and
manufacturing) to increase efficiency and to reduce overall cycle time
Advance warehousing techniques which can optimize space & utilization
and to minimize warehousing & inventory costs
Incentive systems for employees to motivate efficiency and accuracy
1.1.4 Types of Benchmarking

There are four types of benchmarking studies which can be applied in an
organisation.
Internal Benchmarking
A comparison of one specific process within your own organisation or across
different department.
Advantages:
Accessibility to sensitive data and information is easier
Standardised data is often readily available
Less time and resources are needed
Relatively easy to transfer across the same organisation as few barriers are
expected
Example : comparing the Human Resource practices such as absenteeism,
training and medical cost among various branches/subsidiaries of the company
Competitive Benchmarking
A comparison of a specific process with that of a direct competitor.
Advantage:
Makes you more aware of what your competitors are doing and how well
they are doing it.
Disadvantage:
More difficult as information can be used to gain a competitive advantage
over ones competitors. However, in the commercial world, where
information confidentiality is emphasised, it is usual for companies to
undertake this type of benchmarking through trade associations or third
parties.
Example : Public Hospital studied frontline customer service from Private
Hospital
Functional Benchmarking
Focuses on comparison of a specific process externally with a similar one within
a broad range of your industry and business line.
Advantage:
Your organisation will gain information on best-in-class practices which will
assist to identify, understand and close gap in your organisation.
Example : A telecommunication company studied the application of balanced
Scorecard from an electronic manufacturing company to help them improve
their performance.
Generic Benchmarking
A comparison of specific processes from unrelated industries or business lines
towards identifying innovation.
Advantages:
Most informative and can result in changed paradigms in the
current
operations of an organisation.
Can lead to innovation and dramatic improvements.
Example : A Municipal council learning and adapting the best practices of
managing industrial waste from an established chemical company.
1.2 Critical Success Factors For Benchmarking

Benchmarking provides a methodology for learning best practices.
Benchmarking is a methodical process involving careful research and an
understanding of our own processes, products and services. This methodical
process helps us to gain management support for improvement, identify those
who perform well, determine what needs to be improved, and incorporate
what we have learned to change our performances for the better.
The
desired
end
result
of
benchmarking
is
change.
Benchmarking involves seeing a
need for change, discovering what to
change, learning how to change it,
and developing a vision of the future
state. To change, we must be willing
to change and adapt, share
information with others, be open to
ideas from the "outside", and focus
"how to change."
To increase the chances of achieving
change
based
upon
the
benchmarking recommendations, we
should tie our benchmarking efforts to
our organisation's strategic planning
organisations performance nor achieve their vision of a future state and goals.
This also will gain leadership is commitment which is vital implementation. A
successfully conducted study without implementation will not improve the
1.2.1 Barriers to Successful Benchmarking
Lack of clear, visible and consistent management support

Failure to fully understand and document own processes
Selecting too many processes to benchmark
No adequate staff and resources
Not implementing the best practices learnt
1.2.2 What to Benchmark

Measurement is critical to help the organisation to measure and monitor how big
the gap is between current operations/performance and the best practices leant
from the best-in-class organisation. However, the organisation itself must identify
which operations are crucial to be improved in the short-term or long-term planning.
Checklist 1 shows several important issues for identifying what to benchmark in the
organisation.

No.
Action
Q1
What is the potential impact on the critical success areas of

the organisation in terms of cost, timeliness and quality?
Q2
How do customers rank the importance of these

processes?
Q3
What specific problems have been identified?
Q4
What are the major costs in the organisation?
Q5
Which functions represent the highest percentage of cost?
Q6
Which functions have the greatest room for improvement?
Q7
Which functions have the greatest effect or potential effect

for differentiating our organisation from our competitors?
Q8
Is the organisation ready to implement these process

changes?
Q9
Does the organisation have the structural and

organisational capacity to change?
Check
1.2.3 How to Identify Critical Process to Benchmark?

Too often, we become bogged down by the fear of making mistakes in apples to
oranges benchmark comparisons. We are concerned with how to compare our
processes meaningfully with those of other organisations. We try to comprehend
6
the vocabularies that obscure the underlying commonality of our business

processes. As a result, we fail to make out of the box comparisons and thus
cannot search for insights and best practices not found within typical intra-industry
paradigms.
Organisations can use the Process Classification Framework which was developed
by The American Productivity and Quality Centre (APQC) International
Benchmarking Clearinghouse together with Arthur Andersen & Co.
This
Framework serves as a generic enterprise model for businesses and other
organisations to view their activities from a cross-industry process viewpoint instead
of from a narrow functional viewpoint (see Figure 8).
A total of 13 processes have been identified which classified in the framework as
follows :
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Understand Market & Customer

Develop Vision & Strategy
Design Products & Services
Market & Sell
Produce & Deliver for Manufacturing Organisation
Produce & Deliver for Services Organisation
Invoice & Service Customers
Develop & Manage Human Resources
Manage Information
Manage Financial & Physical Resources
Execute Environmental Management Resources
Manage External Relationships
Manage Improvement & Change
Figure 4: Business Process Classification Framework
Source : American Productivity & Quality Center (APQC)
1.3 Benchmarking Code of Conduct

Most organisations follow a set of ethical and legal guidelines for benchmarking
exchange known as the Benchmarking Code of Conduct. These guidelines
establish the ground rules to follow when asking for, exchanging, or providing
information. The following guidelines are adapted from the American Productivity
and Quality Center (APQC).
1.
2.
3.
4.
5.
6.
7.
8.
9.
Conduct yourself within legal bounds

Participate by exchanging information
Respect confidentiality of information
Use of information only for the intended purpose
Initiate contacts with designated individuals
Obtain permission before providing contacts
Be prepared for each benchmarking event
Follow through with commitment to partners
Treat information from others as they desire
Principle of Legality
If there is any potential question on the legality of an activity, don't do it.
Avoid discussions or actions that could lead to or imply an interest in restraint
of trade, market and/or customer allocation schemes, price fixing, dealing
arrangements, bid rigging, or bribery.
Refrain from the acquisition of trade secrets from any means that could be
interpreted as improper, including the breach or inducement of a breach of
any duty to maintain secrecy. Do not disclose or use any trade secret that
may have been obtained through improper means or that was disclosed by
another in violation of a duty to maintain its secrecy or limit its use.
Do not, as a consultant or client, extend ones benchmarking study's findings
to another company without first obtaining permission from the parties of the
first study.
Principle of Exchange
Be willing to provide the same level of information that you request in any
benchmarking exchange.
Communicate fully and early in the relationship to clarify expectations, avoid
misunderstanding and establish mutual interest in the benchmarking
exchange.
Be honest and complete on all requested information that will be exchanged
with other benchmarking partners.
Principle of Confidentiality
Treat benchmarking interchanges as confidential to the individuals and
companies involved. Information must not be communicated outside the
partnering organisation without the prior consent of the benchmarking partner
who shares the information.
A company's participation in a study is confidential and should not be

communicated externally without its prior permission.
8
Principle of Use
Use information obtained through benchmarking partnering only for the
purpose of improvement of operations within the partnering companies
themselves.
The use or communication of a benchmarking partner's name with the data
obtained or practices observed requires the prior permission of that partner.
Do not use benchmarking as a means to market or sell.
Principle of First Party Contact
Initiate benchmarking contacts, whenever possible, through a benchmarking
contact designated by the partner company.
Respect the corporate culture of partner companies and work within mutually
agreed upon procedures.
Obtain mutual agreement with the designated benchmarking contact on any
hand-off communication to other parties.
Principle of Third Party Contact
Obtain an individual's permission before providing their name in response to
a contact request.
Avoid communicating a contact's name in an open forum without the
contact's permission.
Principle of Preparation
Demonstrate commitment to the efficiency and effectiveness of
benchmarking by being prepared prior to making an initial benchmarking
contact.
Make the most of your benchmarking partners time by being fully prepared
for each exchange. Help your benchmarking partners prepare by providing
them with an interview guide or questionnaire and agenda prior to
benchmarking visits.
Principle of Completion
Follow through with each commitment made to your benchmarking partner in
a timely manner.
Complete each benchmarking study to the satisfaction of all benchmarking
partners as mutually agreed.
Principle of Understanding and Action
Understand how your benchmarking partner would like to have the
information they provide be handled and used, then handle and use the
information as intended.
Understand how your benchmarking partner would like to be treated.
Treat your benchmarking partner in the way that each benchmarking partner
would like to be treated.
1.3.1 Is Your Organisation Ready for Benchmarking?

As the pace of change accelerates in the 21st Century due to technological
opportunities, liberalisation of world markets, demand for innovation, quality and
speed, organisations have to readjust and realign their operations to counter all
these challenges. The pace of change has increasingly forced organisations to be
more outward looking, marketoriented and knowledgedriven. Benchmarking is a
useful tool that can assist businesses built strong capabilities, ensure an inward
flow of ideas and establish true competitive gaps. In addition, benchmarking also
enables organisations to establish their position in an industry and learn from
competitors to achieve greater success in all aspects of their business.
Although benchmarking is currently emerging as a buzzword among all industries
around the world, organisation needs to identify the readiness of their own
organisation to implement the benchmarking project in any area of interest. This will
ensure the success of the benchmarking project. Checklist 2 can be used to assess
the readiness of an organisation.

No.
Action
Q1
How does the top management define benchmarking?
Q2
Is there a common understanding between the

benchmarking team and your management on the definition
of benchmarking?
Q3
Will your team able to obtain the resources you need

time, personnel, equipment and funds?
Q4
Is the proposed study linked to your organisations strategic

plan?
Q5
Will the proposed study bring about the desired need for
change?
Q6
Is your leadership committed to both the benchmarking

process and to implement changes?
Q7
What benchmarking process does your team intend to

follow?
Q8
If your team is benchmarking a process, will the process

owner be involved?
Q9
If you are benchmarking a process, is the process clearly

defined?
Q10
If you are benchmarking a process, do you have the

measures for this process?
Check
10
2.0 Overview of Benchmarking

Process
There are various approaches to the benchmarking process. The benchmarking
process usually incorporates four phases:
Figure 5: Benchmarking Process
2.1 The Importance of Leadership Commitment

Senior managements support is vital to ensure the success of any benchmarking
project. Visible commitment and action will reflect the seriousness and importance
of the benchmarking initiatives. Leaders must back-up their advocacy with the
resources and personal involvement in the projects. Support, resource and
direction from respective organisations leader are the three important elements
before starting a benchmarking project. Checklist 3 and 4 can be utilised to identify
the involvement of resources and Personal and leadership commitment
respectively.
11

No.
Action
Check
Q1
Obtain and advertise the managements endorsement of

benchmarking as a principal strategy for organisational
success
Q2
Encourage managements involvement in the identification

and design of benchmarking opportunities
Q3
Identify the sponsors and stakeholders and identify a

benchmarking "Champion"
Q4
Brief senior executives on the objectives and benefits

expected from the benchmarking project to obtain
management "buy-in" for the project
Q5
Determine the level of involvement, support and direction

needed from the management and obtain their commitment
to provide it.
Q6
Identify the resources needed and obtain managements

declaration of support
Q7
Establish a benchmarking training program
Q8
Create recognition
excellence
Q9
Brief senior management at regular intervals during the

benchmarking project to ensure continuous support
and
rewards
for
benchmarking
12

Responsibilities
Check
Actively committed to benchmarking.
Supporting the
benchmarking
study
Willing to change and adapt new practices based

on benchmarking findings.
Have reached agreement on the objectives of the
changes sought by the benchmarking study.
Committed to empower the team the time and the
budget needed to carry out the study.
Agreed on the urgency and scheduling of the
team's work load.
Approve the major milestones set by the team
Providing
Resource
support for the
benchmarking
study
Providing
direction
Has allocated sufficient resources to support the

benchmarking process itself (time, funding, process
support, etc.).
Has identified and approved the necessary
resources for the benchmarking study.
Has clearly identified the sponsor/process owner
for this benchmarking study.
Has provided the team with a mission and
charter.
Has determined and conveyed to the team the
desired reporting procedures
2.2 Benchmarking Resource

Resources are the number of people, time, dollars, systems, equipment and other
support required in the benchmarking study. Effective and efficient management of
benchmarking will reduce the requirement for such resources. Checklist 5 is to
manage the resources.
No.
Action
1.
A quality approach is in place
2.
3.
4.
The scope is limited and manageable

Few organisations or processes are affected
Only relevant people are involved
5.
More economical to use secondary research and telephone interviews
6.
Benchmarking is established in the organisation
7.
The team has experience in benchmarking
8.
The team is dedicated solely to this project
Check
13
2.3 Benchmarking Team Development

At the planning stage itself, a benchmarking team needs to be formed. Members of
the benchmarking team in an ideally should comprise individuals who know the
process to be benchmarked. A well-balanced and diverse team will increase the
possibility of team creativity and innovation.
2.3.1 Selecting the Benchmarking Team
There are many ways to form a benchmarking team. The teams composition
should be carefully determined based on the scope of the effort, the available
resources and the overall objectives. When selecting team members, it is important
to include someone who has the influence to make changes in the process being
studied. It is ideal to have the process owner on the team as well as key players
when implementing change.
2.3.2 Selecting the Benchmarking Team
Contact potential team members; discuss the scope of the study and the
justification for change.
Form the benchmarking team. Make sure the individuals and groups that are
critical to implementation are represented. Include a member of the
leadership on the team. If benchmarking a process, the process owner is
preferred. (see Team Checklist (Checklist 6)).
Determine roles and responsibilities of the team members.
If necessary, conduct training for the team.
Ensure that the team will adhere to the Benchmarking Code of Conduct (see
Benchmarking Code of Conduct (2.7)).
Develop a project plan.
Assess leadership commitment (see Leadership Commitment (Checklist 4)).
Understand your current performance, which involves examining your

process and organisational structure, using flowcharts, fishbone diagrams
and other tools.
Develop an understanding of the relationships that exist between your

process and others.
2.3.3 Type of Benchmarking Team

(1)
Intact Work Group
Usually in single location with all the members reporting to the same
manager.
Manager may or may not be the Team Leader.
14
Intact Work Groups are normally the customers to their own benchmarking
processes.
Advantages:
Team does not need outside approval in order to proceed with the
process.
Adjustments can be made according to requirements.
The benchmarking project can be a continuous process.
(2) Cross-functional, Interdepartmental and Inter-organisational Teams
Structured as a Task team or Taskforce, with specific charters and

defined sets of customers.
Individuals selected for this Team are choose based on either their
specific knowledge, skill level or representation for departments or
organisations.
The team is brought together on a specific issue or problem and will

disband itself once benchmarking is completed.
Team often produces recommendations or reports, and presents findings

to the top management.
(3) Ad Hoc Team
Team is flexible.
Number of members vary according to their share of common interests or

responsibilities.
Team applies benchmarking processes to any situations that warrant

investigation.
Ad Hoc Team can be decided by an individual or formed as a result of a

team decision.
Normally practised by matured organisations with high overall process

awareness, process support and actual hands-on experience in
benchmarking.
2.3.4Roles and Responsibilities of a Benchmarking Team

A core Benchmarking Team structure consists of employees who perform the
majority of benchmarking tasks. Other employees and benchmarking specialists
may provide services as and when needed.
15
Figure 6: A Typical Benchmarking Team Structure
A typical benchmarking structure is as in Figure 5 above. A benchmarking project

can be an extension of the work of a quality improvement team, consists of:
2.3.5 Benchmarking Champion/Sponsor
Quality Council of an organisation shall assign someone as the champion/sponsor.
The sponsor should be at senior organisation level (Head
of Quality or
Benchmarking, or a Senior Line Manager). The sponsor is most often not a team
member.
2.3.6 Project Manager
He/she can be a resource person, assigned ownership at the project to ensure
credibility and acts as a buffer between the Quality Council and the benchmarking
team. The project manager shall ensure the overall objectives of the benchmarking
project are met. He/she shall guide and ensure project remains focused. He/she
needs to ensure completion of tasks and keep Quality Council informed.
16
2.3.7 Project/Process Support

The project support team play a crucial role to assist the benchmarking team in
terms of provide training, IT development, administrative work and others.
2.3.8 Facilitator
Facilitator needs to review project objectives and tasks. This will assist
benchmarking team to complete each step in the benchmarking process.
2.3.9 Benchmarking Team
The benchmarking team to complete each step in the benchmarking process.
Overall the benchmarking teams responsibilities are to collect data, analyse data
and make recommendations based upon the findings from the benchmarking
project. Checklist 6 is use for team preparation before initiate any benchmarking
project

No.
Action
Check
Assessing Team Composition
1.
Include appropriate people in the team to ensure proper

team expertise and maturity, and to help implement
changes resulting from benchmarking recommendations
2.
Select team members based on their abilities and

motivation
3.
Team members should be creative, innovative and open to

new ideas
4.
Team should be adequately represented by process

owners
5.
Team leader to serve as effective liaison between the team

and senior organisational leadership
6.
The process is within the teams sphere of influence
17
No.
Action
Check
Include a Team Facilitator
1.
The team should have a trained facilitator

Training Assessment
1.
Appropriate benchmarking information and education

acquired through classes, reading, or consultation to
assure an effective benchmarking experience and to
maximize the probability of an appropriate return on
investment of the organisation's benchmarking
2.
Project planning tools are available to assist the

benchmarking team. Team members need to be trained on
know how to use effective project management techniques
Assessing Individual Responsibility
1.
Each team member needs to personally review and update

his/her understanding of the process, product or service to
be benchmarked
2.
Each team member is aware of what organisational

information must be protected, such as Classified
Information. For Official Use Only, contracting information
and other organisational intellectual p roperty
2.4 Benchmarking Model

Before embarking on a benchmarking project, it is a vital element to have an
appropriate benchmarking model. The benchmarking model can be used as a guide
and framework before implementation.
2.4.1 MPC Benchmarking Model
This model was developed by Malaysia Productivity Corporation (MPC), Malaysia
in 1998. The MPC Benchmarking Model is a synthesis of various models and
consistent with various definitions on benchmarking. It incorporates many steps,
that have been found to characterise successful benchmarking programmes in
leading organisations. This model provides an adequate framework for successful
planning and execution for any benchmarking exercise. Variations in approaches
18
are made possible within the framework, enabling benchmarking approach to be

tailored to fit specific requirements of the industries.
Phase I of the Model emphasises on the selection of performance indicators, data
processing, benchmark comparison and sharing of strengths. Phase 2 focuses on
the performance analyses, identifying best practices and sharing of knowledge and
experiences. Phase 3 is the adaptation, implementation and standardisation of
best practices into ones organisation for continuous improvement. The desired
end result of benchmarking is higher productivity and better service quality level.
Chapter 4, 5 and 6 of this book shall explain in more detail on each phase of this
MPC Benchmarking Model.
Figure 7: MPC Benchmarking Model
19
3.0 Phase One of the MPC

Benchmarking Model (Benchmarks)
3.1 Start
10
11
12
13
14
15
16
The 16 Steps in the MPC Benchmarking Model
3.1.1 Creating Benchmarking Community of Practices (CoP)

Creating a Community of Practice (CoP) is an essential step before initiating on any
benchmarking project. CoP is a network of individuals or organisations within
similar or dissimilar industries who share some common areas of interest. Members
of a CoP are grouped together on a voluntary basis to initiate some form of
benchmarking activities, where MPC serves as the facilitator.
20
3.1.2 Guidelines for Selection of CoP Members

Who is "best-in-class" or "How do we determine who to benchmark?" are some of
the questions most often asked. Overall, do not spend too much time and energy
looking for the "best". Anything which offers a major improvement over our current
performance is worth learning about.
Collect information on potential members
Collect information and ideas on potential CoP partners through research,
brainstorming and talking to process owners in terms of area,
organisation and rationale
Organisation
Area of Study
Rationale
Product Testing
Consumer
Goods
Manufacturers
Its credibility is based largely on its

ability to test products rigorously
Physical Security
Successful
Casinos
The volume of exposed cash flow

on a daily basis
New Product
Development Cycle time
Toy Company
The ability to constantly introduce

the latest toys and games to the
market speedier than others
Selecting your CoP members
Select CoP members based on collected information. Keep in mind that

probably no one company will be the "best." Companies will have
different strengths and weaknesses, as well as different structures and
culture.
Follow-up with CoP members
Determine willingness of sharing information.
Contact appropriate personnel.
If any suppliers or customers are selected, contact the appropriate

internal contracting personnel or customer representatives as a matter of
courtesy and to ensure that no major problems exist between the
organisations.
21
3.1.3 Criteria for Selecting CoP Members

Comparability
You need to have some level of comparability with your partner.
comparability, ask the following questions in terms of:
To assess
Is the potential partner comparable financially (revenues, sales, profits)?

Does the potential partner engage in comparable functions (similar work
process, methods, practice)?
Does the partner have comparable requirements (similar customer
expectations)?
Does the partner have comparable logistics (similar set-up and work
flows)?
Is the potential partner part of a comparable industry (similar products
and markets)?
Is the potential partner comparably sized (similar number of employees
and market share)?
Does the potential partner have comparable organisational and divsional
structures?
Is the potential partner part of a comparable market sector (public,
private, governmental)?
Types of organisation
Potential partners come from three types of organisations:
Internal organisations with similar processes:
You can benchmark similar functions within a large organisation to identify

and incorporate in-house best practices.
Those within our own industry or direct competitors:
Any direct competitors within own industry who exhibit outstanding

performance in the selected areas to be studied. A third-party source
may have to be used to obtain such data if necessary. For this, there
maybe a need for lead considerations. Keep in mind that benchmarking
exclusively within one's own industry limits out-of-the box thinking and the
finding of best practices.
External functional leaders outside our industry
Concentrate on studying companies that are external functional leaders to

obtain the most innovative practices. It is also easier to collect data since
non-competitors are more willing to share information with each other.
22
Look for a mix of candidates, each of which might yield an element of superior
performance
Consider the following issues:
Be sure you have considered going outside your industry
Don't pick a partner solely because they are known for doing one thing
particularly well
Limit the number of partners
Select accessible partners
Assess your partner's culture. All processes exist within an organisational
system.
Document your process of finding partners. Document your sources, criteria

and selections. The purpose of this documentation is to avoid second
guessing later in the process, and to save time.
3.2 Agree on Benchmarking Topic
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11
12
13
14
15
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Once the CoP is formed, members need to decide what to benchmark. Among
some considerations are:
What is the need and where does it exist in your organisation ?
What do other people think of your performance?
Know your own self ! Survey your operations.
If you do not know what area needs to be to benchmarked, use the

benchmark survey method to explore.
Identify and learn the factors that are critical to performance and the units in
which they can be measured.
Decide on the appropriate level of resolution for the study.
23
3.3 Finalise on Scope, Measures and Definitions
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11
12
13
14
15
16
The collection of data and information is vital. Success depends on how thoroughly
the organisation has planned and analysed the scope of work, method of
measuring results and the definition of terms to be understood by all parties
involved. Process documentation is critical as it helps shape the scope of the study.
Based on a process profile, the scope of process should be manageable.
The key measures should be critical to the success of your process. These critical
success measures should be well balanced, include both leading and lagging
measures. Evaluate both your current and any proposed measurements using
these questions:
What are the measures?
How are they calculated?
What are both the historical and current level of performance?
Where are the largest gaps in performance vs. requirements?
Are these measures based on our understanding and knowledge?
Are these measures based on other organisations measure of related

processes?
After members of a CoP have identified the scope and the appropriate
measurements, the definition of each selected Key Performance Indicators (KPIs)
need to be discussed. A common understanding and consensus on the definition is
important, otherwise the resulting benchmarks would not provide a meaningful
comparison.
24
Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by the Textiles CoP
Scope
Safety
Key Performance
Unit
Measures
Definition
Accident/1000
persons per yer
Number
Number of accidents occurred
ppm
BOC is Biochemical Oxygen

demand of water while COD
is amount of oxygen to
oxidise both organic and
inorganic compounds
Percentage
The ration of total number of

claim against total sales
amount
Yards
Actual is the actual

production quantity (A grade)
produced in production while
converted is actual production
quantity converted based on
a standard product (ST444
SW) by cloth weight
Total B grade and

by spinning
Percentage
Total grade B is the ratio of

total defective fabric caused
by spinners against the total
issued quantity
By Weaving
Percentage
Is the ratio of defective fabric

caused by weavers against
the total issued quantity
By Dyeing
Percentage
The ratio of defective fabric

caused by Dyes against the
issuedquantity
Percentage
The ration of total topping and

color change quantity against
the total quantity for normal
dyeing and color change (pad
steam base)
Replacement
Percentage
The ratio of total additional

gray issue quantity to make
up insufficiency from
minimum shipment quantity
against the total issued gray
issued quantity
Rate of Keeping
Delivery Date
Percentage
The ratio number of orders

compliance to EMD against
the total orders issued
Environment
BOC or COD
Claim
(customer
satisfaction)
Rate / Sales
Amount
Production
Quantity
Actual and
Converted
Quality
Efficiency
Reworking
25
Figure 8: Example of Benchmarking Scope, KPIs and Its Definition Agreed by the
Textiles CoP (Continued)
Scope
Unit
Consumption
Key Performance
Unit
Measures
Definition
Electricity
KWH/100 yd
Total consumption against

converted quantity by
electricity
Steam (Fuel Oil)
L/100 yd

converted quantity by fuel
Water
Ton/100 yd

converted quantity by water
Dyestuff
Kg/100 yd
Total dyestuff consumption

against converted quantity by
DCA
Chemical
Kg/100 yd
Total chemical consumption

OCA
Auxiliaries
Kg/100 yd
Total auxiliaries consumption

OCA
Labour
P/100 yd per
day
Manpower against converted

quantity per day per 100 yd
3.4 Data Collection : Survey
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11
12
13
14
15
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The data gathering phase involves a period of hard, purposeful work, requiring
frequent contacts and working sessions with the participating organisations. Data
sources and people for benchmarking may be found at various levels in an
organisation.
3.4.1 Types of Data Collection
Data collection can be conducted through a survey questionnaire or using an online system such as MPCs e-Benchmark.
26
3.4.2 Survey Questionnaire

Data collection involves the following:
Draw up questionnaires, including definitions and explanations where

necessary.
Collect information and compile data on business or organisations.
Collect data and information from other sources.
Validate data and information collected by cross-checking with the

respondents.
Document the data and information by computing into the computer.
Advantages of using the questionnaire in gathering data and information:
Provides an automatic framework for all documentation to be

compiled, sorted and organised
Presents a systematic and clear method of collecting data and

information that can be understood and accepted by all parties
concerned.
Questionnaire is the measuring instrument of the
Benchmark Survey. It must measure what it
intends to measure, and not something else
Validity. It must also give accurate readings
Reliability.
In designing the questionnaire, CoP members must
consider the kind of data and information to be
collected in fulfilling the objectives of the
benchmark survey. CoP members need to spend
time in writing clear, simple definitions of the
information content to be surveyed in order to
avoid
misunderstanding
and
enhance
comparability for purposes of analysis. Experience
showed that questionnaire design requires several testing, revisions and

clarification before it can be accepted as reliable.
Questions in the questionnaire can comprise one or a combination of the following:
Open questions
Yes-or-No questions
Multiple choice questions
Scoring/Ranking questions
Data points
Avoid vague or over precise wording, double negative and embedded
questions, hypothetical questions, questions that imply biasness,
overlapping categories, abbreviations and questions that are too personal
or too demanding.
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Box 1: Textile and Apparel Benchmarking Questionnaire

CODE
1.0
(a)
(b)
Name of Company:
Contact Persons: Tel No: Fax No:.
2.0
Please state the number of paid employees as follows:

EMPLOYEE
Total No. at
31 Jan 2012
Total No. at
31 Dec 2012
Total No. resigned/

retired in
Jan-Dec 2012
Total No.
recruited in
Jan-Dec 2012
2.1 Total No. of paid

employees
2.2 Total No. of
Management Staff
3.0
Please state the following with respect to only completed customers orders for period
January to December 2012:
Quantity
(in pieces)
FOR APPAREL ONLY
Quantity in equivalent Units

(please state in Sq. Meter or Kg)
3.1.1 Total Quantity of Customer Order

(excluding work-in-progress)
3.1.2 Total quantity of fabric ordered
3.1.3 Additional/Replacement of fabrics, if
any
3.1.4 Actual total quantity shipped to
customers
FOR SPINNING ONLY
Quantity (in pieces)
3.2.1 Total Quantity of Fibres Ordered for the production of yarns

3.2.2 Total quantity of yarn produced
3.2.3 Total wastage of fibre
FOR WEAVING ONLY
Quantity (in Kg)
3.3.1 Total Quality of Yarn Ordered for the production of fabrics

3.3.2 Total quantity of unfinished (greige goods) fabric produced
3.3.3 Total quantity of finished (dyed/printed/other finish) fabric
produced
3.4.3 Total wastage of yarns
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3.4.3 On-line e-Benchmark

In 2001, MPC developed an on-line and interactive e-benchmark system to speedup the data collection and computation of benchmarks. This system allows
industries to conveniently key-in data, compute indicators, rank performance and
benchmark comparisons, all within a submission using Internet. Confidentiality of
industrys data is secured through the use of a password. This real time ebenchmark system had encouraged many industries to measure performance and
benchmark comparison in Malaysia as well as in other countries.
Figure 9: Operational Structure: Interactive e-Benchmark
Password issued to each

member
1
Community agrees on scope,
measures and definitions to
benchmark and manager gets
data form ready
Member key in data
4
Real-time data processing
takes place in the
e-benchmark Hub
Ranking against benchmark for

self-evaluation and continuous
improvement
5
Real-time benchmark report
generated
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The operational structure of an interactive e-benchmark system as shown above

comprises six simple steps:
Step 1 : Agreement on Benchmarking by Community of Practice (CoP)
The CoP members agree on the scope, measures and definitions for the
indicators to be measured.
Common understanding and acceptance are
necessary to ensure accurate provision of data into the system. The CoP manager
will then prepare the format to facilitate data entry process.
Step 2 : Password to CoP members
Each CoP member will be issued a password to access their own data entry
format. Confidentiality is ensured by the password and personalised record, which
cannot be accessed by anyone else.
Step 3 : Data Entry
Members will key-in data for all the Key Performance Indicators agreed by the
CoP into the e-benchmark system. They are responsible to check, verify and
validate their data before submission.
Step 4 : Real-Time Data Processing
Upon submission, data is transferred to the hub and is instantly processed .
database is then established for the CoP.
Step 5 : Real-Time Benchmark Report Generated

A real-time benchmark report is then generated for each indicator and period
selected. CoP members would be able to analyse their own performance
indicators, trends, competitive scores and performance ranking as compared to
others in the CoP.
Step 6 : Self-Evaluation For Continuous Improvement
CoP members can refer to the benchmark report on-line or they can print them out
for discussion. The benchmark report given serves as useful inputs for members
to identify benchmarks and performance gaps for their strategic planning and
improvement.
3.4.4 Identifying the Performance Gap
Identifying and quantifying the performance gap to the benchmarked performance
is only half of the analysis. What makes benchmarking a powerful tool for
improvement is that it also requires you to identify and understand the underlying
operatives content and work processes to explain why the performance gap arises.
One of the most essential steps in benchmarking therefore would be to get to the
bottom of things in order to understand why performance differs.
To gain a clearer understanding of what you need to do to achieve your goals,
perform a gap analysis. In a gap analysis you evaluate the level of your current
performance and compare it to where you want to be or to another organisation's
performance. The difference between the two is the gap.
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A gap analysis commonly indicates that your performance is below the desired
level. However, a gap analysis can reveal that your performance is high for
example, if you are ahead of your competitor in which case you would want to
maintain or increase the gap even further.
To be effective, a gap analysis has to address two areas: the magnitude of the gap
and the reasons for the gap. Understanding the magnitude of the gap gives you
perspective on the effort necessary to close or maintain it, while understanding the
reasons for the gap points out the areas where you should focus your efforts.
3.4.5 Process for Performing a Gap Analysis
Graphically present your performance measure, showing both your current

performance and the goals you have projected.
Identify the magnitude of the gap in terms of the unit of measure.
Using data collected from appropriate sources, determine the reasons for the
gap. Sharing information and ideas in a team setting is extremely powerful.
Prioritise the reasons for the gap.
Summarise your conclusions. You will use these to determine what actions you
should take to reduce, maintain, or increase the gap.
3.4.6 Types of Real-Time e-Benchmark Reports

The CoP members can use the real-time e-Benchmark Reports generated by the
e-benchmark to identify the performance gap. There are two reports in eBenchmark : Competitive Score and Ranking Report. The competitive scores report
presents in terms of minimum, medium and maximum of the communitys
performance against the organisations own performance while the ranking report
highlighted the organisations position against CoP members. Figure 14 and Figure
15 show the samples of the competitive scores respectively.
Figure 10 : Competitive Scores Report
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Figure 11 : Ranking Report of e-Benchmark
3.4.7 Development of Dashboard

Benchmarking output can also be presented in the form of dashboard. Table 2 and
Figure 16 show the Human Resource Benchmarks and Dashboard for first half of
2002 respectively.
Table 1 : Human Resource Benchmarks for 1st of 2002
Key Performance Indicators
Direct
Labour
Indirect
Labour
(nonexempt)
Indirect
Labour
(exempt)
Weighted
Average
Time to fill an open position (Day)
0.49
14
20.33
Cost per hire (RM)
4.48
158.33
242.00
Medical cost per employee (RM)
2.78
11.12
16.89
MC rate (%)
0.24
0.44
0.05
0.26
Employee turnover (%)

Employee turnover for equal or
less that 1 month (%)
2.22
0.15
0.00
1.81
9.36
1.45
Absenteeism Rate (%)
0.32
0.19
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Figure 12 : Human Resource Dashboard for Direct Labor in 1st Half of 2002.
3.5 Share Strengths
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11
12
13
14
15
16
Upon completion and analysis of the benchmarking report, a seminar to share the
e-Benchmark findings will be conducted. During the seminar, there will be an
exchange and more in-depth discussion on the findings. The exemplary
performers or best practice company/companies will share their strengths on how
they have achieved the benchmark performance. No individual company is
excellent in all areas, hence benchmarking encourages a win win sharing and
learning culture. All participating members could exchange experiences and share
their strengths and opportunities in this seminar.
Subsequently members would be interested to know more about the best
practices of these benchmark companies. Benchmarking is not merely numbercrunching. It goes beyond number. Benchmarking is for Best Practices. This takes
the CoP to Phase 2 of the MPC model for learning best practices.
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4.0 Phase Two of the MPC

Benchmarking Model (Best Practices)
4.1 Site Visit Preparation
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11
12
13
14
15
16

The most effective method of acquiring information in benchmarking is to visit the
best-in-class company at its site and conduct face-to-face interview. This step
provides you the chance to get acquainted with the atmosphere, environment and
culture in which the company is operating. You can tour the premise and see with
your own eyes what kind of methods and processes are being used. You can
witness the demonstration of support systems and administrative aids, learn more
about the goods and services the company products and services, and take the
opportunity to discuss pros and cons with the people on site.
34
However, the usefulness and success of the site visit will depend on the
thoroughness with which it is prepared and planned. Please be aware that you are
taking up their busy working time, therefore come well prepared! Please remember
too that this method of gathering information is costly.
First, check with the contact person in the other company to ensure that you will be
meeting and interviewing the right list of people. Prepare a set of questions for a
face-to-face interview as an interview guide during the companys site visit. Send
an initial agenda outlining or defining the purpose of the benchmarking visit and
send it a few days earlier to the company. The agenda to include :
An opening statement
Introduction
Purpose of the interview
Why the individual was selected for the interview
Prepare a list of questions to askbe prepared to explain the relevance of a
questions
Prepare your own set of answers to the questions to share with the
respondents

No. Action
1
It is essential to start off on the right footing. Begin by introducing

yourself and your company and briefly explain your mission. Try
to strike a friendly but businesslike note.
Make sure that you meet the right person, i.e., the one best
qualified to inform you about the excellent performance under
study
Confirm the time and place of meeting (including the time it is

scheduled to end) in writing to avoid any misunderstanding
Send the interviewee a letter or fax message containing a brief

rundown on yourself, your company and your mission, as well as
the questions, questionnaire and the Individual Benchmark
report you plan to discuss
Do not expect one meeting to supply all the information and data
you needed. You may follow up with telephone, fax or e-mail.
Do your homework thoroughly as possible by reading reports etc
Be ready for counter-questions of the type: Why do you ask that

question ?. Be prepared to explain your motives. How do your
lot do this, how is this managed in your company ?.
Reserve time immediately after the meeting to follow up,

document and discuss the information and data emerged from
the meeting. What questions still remain unanswered? What
supplementary information do we need?
Check
35
During the interview, LISTEN actively to probe for more information to explain the
performance:
Look interested
Inquire with questions
Stay on target
Test for understanding
Evaluate the message
Neutralise your emotions
4.4.1 Guidelines for Site Visits
Site visits are expensive for all concerned. For those visiting, there are travel costs
and preparation. For the host, there is the time invested in both the preparation and
the hosting of the visit. However, it can be the best means of sharing information.
Given both the expense and the potential benefits, prepare carefully and thoroughly
for the site visit. Although these guidelines are lengthy, it is best to be thoroughly
prepared. Members of CoP need to finalise two types of checklist before and
during the site visit (Checklist 8 and 9) towards gathering best practices information.
Useful tips: You can use these phrases to encourage people to respond to
you I see. Youre right. Interesting that you should say that.
I dont quite follow you, could you elaborate on that a little bit.
That sounds interesting, what exactly do you mean ?
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No. Action
1
Provide information on your organisation to your partner
Consider scheduling a pre-visit to handle logistics and clarify the

purpose of the study with all participants
Review all available information about your partner. You should know
the size of their business, the industry in which they operate, the type
of ownership, the organisational structure, the style of manufacture
and your estimation of their core competencies
Check
If possible, evaluate your partner's culture--how formal is their culture,

what sort of participation is common in their decision making process,
and what is their communication style
Determine what, if any, audiovisual equipment will be needed and

make sure the partner will have it available
Offer several choices of dates on which to visit
Develop an agenda for the meeting. Discuss this with your partner.
Once finalised, give it to your partner at least two weeks prior to the
meeting. Include type of meeting you want, length of visit, and what you
want to accomplish.
Develop a list of attendees for the meeting and give this to your partner
at least two weeks prior to the meeting
Develop a list of questions (see 5.2) and give those to your partner at
least two weeks prior to the meeting. Ask only for information which we
are willing to share ourselves. Be prepared to give your own answers
to the same questions.
10
Determine the roles of team members:

Who will be the team leader?
Who will be the discussion moderator?
Who will be the recorder?
Who will be the timekeeper?
Plan to have members ask questions relating to their respective
areas of expertise since it will be their responsibility to understand

and effectively evaluate the data gathered and apply it in the
analysis. If these people have not conducted an interview before,
train them
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Checklist 8 : Before the Site Visit (continued)

No. Action
11.
Have team members review all questions and know their organization's
answers to the questions
12.
If this is an initial meeting, consider giving the Agency overview briefing

to your partners if time allows and your partners are interested
13.
If we are a customer of this partner, invite the local sales representative

or account manager to attend
14.
Determine if any information to be requested or shared is proprietary or

classified information. If so, establish how confidentiality will be
maintained
15.
Plan to exchange business cards
16.
Develop a briefing package (see Box 2)
17.
Does the internal organisation have any problem in understanding the

questions?
18.
Review and critique your input. If necessary, make appropriate

changes to the questions
19.
If the internal organisation is interested in participating, define their

roles and responsibilities
20.
Send a letter to confirm the visit, The letter should include:
Check
Introduction
Thank you
Who will be attending
Logistics
Name and phone number of hotel
Arrival and departure times
Appropriate airline information
Questions for the meeting
Confirmation of where you will first meet, such as "We will meet
you in the lobby at 8:15 on Tuesday morning."
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No. Action
Check
1.
Introduce team members.

Each member should explain their
functional role, responsibilities and their objectives in the
benchmarking effort. Asking the benchmarking partner to do the same
will ensure the correct people are in attendance before starting the
session.
2.
Identify team roles within the interview team
3.
When appropriate, spend some time socially to develop a rapport.

Food is excellent for facilitating social rapport
4.
State the objectives of the visit and the process to be followed
5.
Reconfirm the agenda and make sure everyone has copies
6.
Review benchmarking project description
7.
Communicate why the company was selected
8.
Follow the list of questions submitted, asking only one question at a

time. Begin with open-ended questions on general areas of interest
before proceeding to specifics. As questions are introduced, defining
specific operations or processes will eliminate any confusion between
company-specific terminology and clarify who should be responding
with the required information
9.
Use the questions to drive the meeting.

copies
10.
Don't ask for information you would not be willing to share ourselves
11.
Caucus and regroup at breaks
12.
Travel in pairs or small groups during any site tours. This offers
several advantages: one person can take notes while another talks; the
team can split up to observe different operations; team members can
validate important points and observation
13.
Before closing with a review, have the team meet to ensure that all
questions have been answered thoroughly and to develop any
additional questions which should be addressed before the session
14.
Close with a review.

clarified
15.
Thank them for their time, effort and cooperation
16.
Offer a reciprocal visit.
Make sure everyone has
List any follow up issues to be completed /
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Box 2 : Briefing Package

Before going on a site visit, a briefing package should be prepared and given
to all benchmarking team members and the CoP members.
The briefing package should contain the following:
Logistics
Schedule
Location of meeting
Purpose of meeting
Overview of your organisation
Meeting materials
Agenda
Questions, if not already sent
Attendees, to include biographies
Examples of any flowcharts and/or diagrams that you will be
asking for or referring to
4.2 Data Collection : Site Visit
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11
12
13
14
15
16

Site visit preparation is essential as benchmarking is not industrial tourism. You
need to establish focus questions. You need to know and chart your own
process/flow chart of the process you are going to study, so as to grasp better
during the site visit on how others are doing, and why they are doing better. Keep in
mind that the questions you ask will determine what information you receive; what
you ask for is what you get. Consequently, your questions drive your data
collection and analysis. Also, a well-written and easily understood questionnaire
can increase the willingness of a partner to participate. In designing the
questionnaire, organisation must consider clearly:
What kind of data and information to be collected in fulfilling the objectives of

the benchmark survey
Clear, simple definitions of the information to avoid misunderstanding and
enhance comparability for purposes of analysis
Pilot testing of questionnaire may be desirable
4.2.1 Questionnaire Development

It is a must to develop proper questions during the site visit. This will allows
benchmarking members to focus on the area of interest. Two main types of
questionnaire development can be recognised : Introduction of the benchmarking
project and questions on process.
40
4.2.2 Part 1 : Introduction

Components of the introduction may include:
1. Criteria for instructions :
Tell how to answer
Indicate where to answer
Provide the estimated time to complete
Indicate the desired date by which the questionnaire should be
completed.
2. An indication that the Benchmarking Code of Conduct will be observed, and,
if necessary, a discussion on the Code of Conduct.
3. A definition (boundaries, goal, outputs, etc.) of the issue/process being
benchmarked. You may want to include process maps.
4. Definitions of "technical" process terminology to be used in the
questionnaire. Try to use generic wording if possible, but where it is not
possible, define terms.
Box 3 : Example of Questionnaire Development Part 1 : Introduction
Profile of Organisation
(a) Name of organisation : ..

(b) Address : ..
..
(c) Name of Contact Person : ..
(d) Designation : ..
(e) Telephone Number : ..
(f) Email : ..
(g) Year in establishment : ..
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4.2.3 Part 2 : Designing Questions on Process

Components of the questions may include:
What we want to know to be able to use the information we gather to make

improvements, questions should focus on the following issues:
1. What results do 'best-in-class" companies produce that we don't?
2. How efficient and cost effective are "best-in-class" companies compared to
ours?
3. How are "best-in-class" companies work processes and methods different
from ours?
4. How do "best-in-class" companies support these processes?
5. How does the organisation of "best-in-class" companies differ from ours?
6. How are the philosophies or strategies of "best-in-class" companies
different from ours?
Types of information
To answer the questions above, we need the following types of information:
a. How well is the process performed (performance measures)? What are the
measures?
What dimensions are measured?
What is the current performance?
What are the historical trends?
How are the measures defined?
How are the measures calculated?
How is the data collected (how taken, frequency, etc.)?
How reliable is the data?
How is the data reported?
b. How is the process performed?
What are the work processes and methods?
What are the roles of those involved?
What knowledge and skills are required?
What resources are involved?
Where is the process performed?
When is the process performed?
c. What structures enable the performance of the process?
What training is required?
What is the compensation?
What recognition is there?
What is the organisational structure?
What are the supporting communications?
What are the interrelationships?
d. What is the underlying culture?
What are the organisational values?
What are the organisational strategies?
What is the management style?
42
Types of questions
There are two types of questions:

a. Open-ended: Open-ended questions require people to answer in their
own words. Open-ended questions do NOT have any pre-developed
answers, unlike multiple choice. An essay question is an example of
an open-ended question.
To maximise the potential of open-ended questions, avoid verbs like
do, and is/ are. Such verbs elicit straight yes/no responses. Focus on
how, what and why to elicit detailed answers.
b. Closed-ended: The person chooses an answer from the ones you have
provided. Multiple choice questions are an example of a closed-ended
question. Others are yes/no questions and scales.
Box 4 : Rule of Thumb in Choosing the Type of Questionnaire

Use open-ended questions when:
You are in an exploratory and discovery mode

You want to uncover new information and new issues you did not know
previously.
The information you need is descriptive in nature, such as how a process is
performed
You need input for developing closed-ended questions
You are conducting a face-to-face or phone interview.
The strength of an interview is the ability to ask open-ended questions and to

follow up on the answers. Asking closed-ended questions during an interview
minimises the strength of the interview format. Closed-ended questions can be
sent before the interview. If there are any answers to closed-ended questions
which need to be discussed or clarified, they then can be discussed during the
interview.
Use closed-ended questions when:
You have a good idea of what information you need

The desired responses can be answered quickly
43
Process for developing questions
Brainstorm questions.
Do a group affinity diagram.
Develop a list of goals based upon the groupings of the questions.
Develop a matrix of the goals and the questions. Down the left hand side of
the matrix list your goals. Then determine which goal each question
addresses and put the number of the question beside each goal.
Check that you have enough questions for each goal. Develop additional
questions, if necessary.
If you are benchmarking a process, check to see that you have a balance of
questions.
If you are benchmarking a process, check to see that all questions are
related to a process map or a map of an organisational system.
Decide which questions are essential and which are non-essential. Delete
the non-essential questions. Be ruthless. There is no room for nice-toknow information.
Redo the matrix to ensure all goals have an adequate number of questions.
If benchmarking a process, check again that you have a good mix of
process and process enabler questions and also that all questions are
related to a process or organisational system map.
Put the questions into a logical sequence; categorise into meaningful

subsections where appropriate. Begin with easy questions. Place the
more important questions in the middle of the survey and the demographic
questions at the end. At this point you also may identify redundancies to be
deleted.
Critique the questions themselves, using the guidelines for common pitfalls
in writing questions. Also check that all of your questions are impartial and
non-leading.
Pilot the questions. Depending upon the outcome, you may need to rework
the questions--rewriting some, adding some new ones, and perhaps
deleting some. Also ask yourself, "Will my partner be capable of answering
these questions?" and "Are there any reasons why a partner would not
answer a question?"
Using either data from the pilot or fake data, analyse the answers to the
questions. At this point you may need to rework the questions--rewriting
some, adding some new ones, and perhaps deleting some. Ask yourself,
"Do these questions get us the information we need?"
If necessary, tailor the question set for a specific partner.
Remain open to changing the questions as you collect data. However, keep in
mind that if you have already collected data from a partner, you may need to revisit
them to ask any additional questions you develop later.
44
Pitfalls to avoid when asking questions
Did you use words which could mean different things to different people?
In a customer survey, for example, "timeliness" can mean either that you got
the product or service when the supplier promised delivery or when you
actually wanted it. Such words make it impossible to interpret the results
because you don't know how your partner interpreted the question.
Does the question actually ask more than one thing?

Example: Did you receive your order on time and was it accurate?
Is the question too vague?

Example: Is life treating you well?
Is the question too precise?

Example: How much did you spend in the cafeteria five years ago?
Is the question biased?

Example: Which group of idiots is responsible for the incredibly high rate of
infla tion?
Is the question too demanding?

Example: Below are 35 factors relating to customer satisfaction. Rank them
in order of importance to yourself, your organisation, and national security.
Would you be comfortable answering this question yourself?

Example: The last time you murdered someone, what type of weapon did
you use?
Does the question contain abbreviations, jargon, or unconventional

phrases?
Example: How do you rate the effectiveness of the BAD transmogrifier?
Is the question too long?

Example: How do you feel about the United States' current and complex
foreign policy regarding the varied rates of tariffs on foreign goods and
services coming into this country?
Are there any double negatives, which confuse people, in the question?
Example: Would you not buy the lawn mower if it was not cheap enough?
Have you defined all key terms?

Example: What procedures should you follow to ensure TEMPEST
requirements are met?
Have you used simple and direct wording?

Example: How many people on your current payroll do you pay?
Have you used moderate rather than extreme phrasing?

Example: Is the response time from your vendor all you could expect?
45
Box 5 : Example of Questionnaire Development Part 2 : Question on Process
What is your process?
What is the purpose/application of this process in your

organisation?
How would you describe this process?
What works/worked well?
What is/was not working well?
What major improvements are planned in this area?
Is there a flow chart for this process?
How was this process deployed throughout your organisation?
How well does this process perform over time and at multiple
locations?
How do you measure process performance? What are the key

measurements?
What are your organisational values?
How much and what type of training do you provide for this
process?
46
4.3 Recommend Improvement
10
11
12
13
14
15
16

After the site visit, several critical steps should be implemented immediately :
IMMEDIATELY following the meeting, review notes and write up initial

findings. This should take 1-2 hours. Ask the following questions:
What new things were learned?
What differences are there between our practices and theirs?
Why is this organisation successful?
Did everyone come away with the same understanding?
What are potential practices for implementation?
What follow-up activities are needed?
Do we need any additional information?
Who will perform them?
Write a trip report summarising the site visit findings. The trip report might
include:
Contacts within the partner company
Process flows and supporting documentation
Measurements related to the process
Enablers and disablers which were observed and documented,
such as organisational culture, appropriate support structures
and employee attitudes, etc.
Applicable practices for potential implementation
Lessons learned during organisational change, if applicable
Confirm the accuracy of the trip report with the partner
Send a letter of appreciation for the visit
Follow up on any requests or promises to provide information
4.4 Share Findings
10
11
12
13
14
15
16

The final stage of the second phase of benchmarking project is to share the best
practices implemented by the best-in-class organisation. Members in the
47
community will present the best practices that they have learnt during the site visit
activity. A seminar can be organised to facilitate the discussion and knowledge
sharing in selected areas among the members.
Subsequently, the benchmarking teams need to make recommendations to their
respective organisations and implement the learning accordingly. Benchmarking
process is only complete when learning and implementation have taken place. The
following is an example of the best practices learnt from a site visit to an exemplary
local authority and Electronic Manufacturing Services Organisations.
48
Box 6 : Best Practices in Managing Municipal Solid Waste

Best Practices in Solid Waste Management Enforcement Policy and
Structure
Establish and publish widely the vision for a clean city
Establish legal framework for the city to exercise proper authority to
enforce regulations within the citys boundaries
Establish clean and relevant local ordinance (by-laws or local laws)
for the control of Solid Waste by the city
Best Practices in Solid Waste Management Enforcement Public
Awareness and Education
Make the public aware of local ordinance for the control of Solid
Waste through the mass media
Use a variety of media for public awareness of regulation and of
enforcement actions, for example newspaper notices, stickers,
billboards, warning signs, leaflets, and radio
Provide enforcement officers with official uniforms, and prominently
marked vehicles to facilitate public visibility.
Best Practices in Solid Waste Management Enforcement Resources and
Proper Training
Ensure all city department involved co-operate in a coordinated
program of enforcement
Provide a stable budget for the enforcement activity
Provide standard operating procedures and documentation
Train enforcement officers with special enforcement skills, for
example knowledge of the law, managing difficult cases, obtaining
evidence, negotiations skills, persecution procedures
Best Practices in Solid Waste Management Enforcement Process
Create an environment which would make littering objectionable, for
example by beautifying or rehabilitating an area first, the enforcing
regulations
Ensure renewed enforcement, for example when new bins are
installed in an area
Obtain defensible evidence of infringement to support legal action if
required. For example photographs, witness statements, written
acknowledgement by infringer
Best Practices in Solid Waste Management Enforcement Monitoring
Provide monthly reporting on inspection activity, infringements
detected, fines issues, fines paid and prosecutions
Survey residents on their satisfaction with the enforcement process
Survey community based organizations and residents groups on
their satisfaction with the enforcement process
Monitor newspaper letters and articles, and city residents calls to
radio stations concerning Solid Waste Management Enforcement
49
Box 7 : Best Practices in Human Resource Management

Best Practices for Administering MC Rate
Attendance bonus for staffs who have 100% full attendance (not taken any
MC, NPL or AL). For full attendance, RM50.00 is paid as attendance bonus.
Medical record book to track MC seeking cases.
Medical benefits for dependents are extended to Managers
Company sponsors recreational activities and provide healthy food in the
cafeteria.
Insurance for hospitalisation
Medical charges limited to RM15.00 per visitation.
If employees are kept busy, MC rate goes down
Normal attendance bonus : RM120.00 per month (if no MCs or Absent cases).
A 2 weeks bracket given, where employees will get RM30 or a full RM120 or
no bonus at all per month. Most of them strive to achieve the extra RM120 by
being present at work.
Attendance Incentive Program is linked to overtime support and productivity
numbers. Points are accumulated where employees can redeem these points
for goods monthly or annually.
MCs are not recognised if medical treatments are sought for the day after
more than 4 hours at work. Should such MCs arise, then only will be
considered.
Panel clinics are appointed only in areas where there are at least 10
employees residing in the area.
Best Practices for Monitoring Medical Cost

Provision of in-plant clinic
Provision of group hospital and surgical insurance
The setting of a maximum medical consultation/treatment fee. This is to avoid
clinics which takes advantage of situations.
Monitor medical records of frequent MC employees.
- theres KPI to be compiled, top medical cost listing/frequent visits, if
employees to frequently visiting doctors, will call up clinic for clarifications
- to avoid malingering cases, frequently sick employees are sent for medical
check ups.
- Request
to :go
forPractices
2nd opinion
priorResource
to surgical.
Boxemployees
5.9 (continued)
Best
in Human
Management
Conduct health talks by medical practitioners on health awareness.
Trace medical chits, (those without chit, claims can only be forwarded with an
explanation letter).
Non-panel claims, must write in explanation.
Visiting doctors are Monday Friday ( 1 hour per day)
No industrial nurse.
No ceiling imposed and employees enjoy specialist treatment with no
limitations.
Dental RM200 yearly per employee.
Able to identify employees who hop from one clinic to another. Provides realtime information.
Doctors key in to system. Minimise administration works.
50
Box 7 : Best Practices in Human Resource Management (continued)

Best Practices for Reducing Absenteeism Rate
HR Department tracks the employees absenteeism daily from their TMS

system.
Employee absenteeism detailed report published by department weekly.
Employee absenteeism rate is one of the KPIs that will be presented in the
Management Meeting. Department Heads are responsible to answer for any
high absenteeism rate in his/her Department.
The supervisor will issue verbal, followed by written warning to those
employees who are frequently absent from work without proper reason. If
such behavior continues, this may lead to suspension or termination.
The attendance bonus will be reduced by half for direct labor or non-exempt
employees who are absent from work for 1 day. No attendance bonus will be
paid to those who are absent for more than 1 day.
The low head count in the company creates rapport/close relation between
supervisors and subordinates. The employees are comfortable to highlight
their problems to their supervisor and the supervisors are willing to provide
advice as well as counseling to the subordinates.
Absenteeism Rate for Indirect Labor (exempt), not only for non-exempt are
also tracked.
Monitor Attendance through a tracking system accessible by the Department
Head.
Finance cross-check with Department Head on the Exceptional Report.
Department Head access and looks into the Monthly Report
The requirement to clock-out for lunch (use of green color badge just for lunch
time duration)
Implement a multi-media system called e-HRM for more efficient and effective
monitoring.
51
Box 8 : MPCs Best Practices Sharing Tools

BP e-Systems
In this era of Information and Communication (ICT) Technology, MPC has developed
several web-based system/tools that can be utilised by members participating in the
benchmarking for best practices projects.
BOND (Benchmarking On-line Networking Database)
BOND is a database of best practices and performance measurements provided by MPC
to assist organisations in searching for best practices and benchmarks. There are 11 links
in BOND; What is Benchmarking, MPC Benchmarking Model, Benchmarks, Best
Practices, Benchmarking Case Studies, Best Management Practices, Interactive eBenchmark, Public Best Practices Centre, HR Suite, e-Best Practices and BP Events &
Happenings. BOND can be accessed through www.mpc.gov.my
Public Best Practice Centre

In line with the Guidelines on the implementation of benchmarking in the Public Service
no. 1/1999; one of the Development Administration Circulars issued, a new link has been
developed in BOND. The Public Best Practice center Web Page is the latest
development in BOND database that provides sharing of information, key performance
indicators, benchmarks and best practices specifically in the public sector. This web page
provides the following features :
BOND site
This web page is hyperlinked to the BOND web site and accessible through MPC
BOND web page at http://bpap.mpc.gov.my/BPAP/

MPC Public Sector Benchmarking News and Events
Update on the latest MPC benchmarking news and event for the public sector
Pekeliling Kemajuan Pentadbiran Awam (PKPA)
The Malaysian Circular on Guidelines to Implement Benchmarking for Public
Sector 1999 highlights the importance and effectiveness of benchmarking for best
practices in the public sector
MPC Benchmarking Model
The model provides an adequate framework for successful planning and
execution for any benchmarking exercise and serves as an analytical tool to
measure and identify gaps and inefficiencies in business operations that can be
applied to all industries
Benchmarking Code of Conduct
The code emphasizes on benchmarking ethics to ensure information
confidentiality, effectiveness, professionalism and ethical benchmarking
Public Sector Benchmarking Key Areas
4 keys areas on organisational excellence, counter service, project management
development, local authorities/municipal councils are available. Each of these key
areas has the following features such as questionnaires, benchmarks and best
practices
Each questionnaire is constructed based on key performance indicators and

metrics
Benchmark of each key area is presented to show the best in class value
Best practices of each key area are identified as outstanding business results,
processes and excellent performance are also highlighted
Public Sector Productivity
The Productivity performance level on selected public sector organisations
52
Box 9 : MPCs Best Practices Sharing Tool (continued)

BP Net
BP Net allows the capture, dissemination and sharing of knowledge and best practices
information that promotes a culture of continuous learning, innovation and improvement.
Each of these web communities will have its own threaded discussion forum, news
publishing mechanism, notification mechanisms such as on-line calendar, and web
messaging system and library resource system.
Bulletin Board Members able to view latest news and announcements

Message Members able to view and send messages to each community member
usin their personal message box
Calendar Members able to view latest posted events and functions in their personal
built-in calendar
Forum Members able to discuss and share opinions posted in the discussion forum
Library Members able to upload and download documents, journals, articles and
other on-line contents stored in a centralised library resource system
Opinion Poll Members able to vote their own opinion on specific opinion question.
Discussion Room Members able to communicate and discuss among themselves in
real time text based on virtual classroom concept
HR Suite
The immense importance of human resources development in the current competitive
business environment has necessitated the need to develop the HR web page to
disseminate value adding human resource deliberations, its diagnosis of the future needs
and the compiled information of human resource best practices to Malaysians nationwide through the e-system. This web page focus on the issues pertaining to the human
resource management and the people performance measures. The HR dashboard
presented in this web focus on identifying key HR metrics and HR best practices.
BP Publications
e-BP Digest
Abstracts of the half-yearly Best Practices Digest publication which features Best
Practices Sharing, Performance Measures, Knowledge Forum and Best Practices Events
& Happening. MPC also published several publications for the purpose of sharing
information both locally and internationally. Indeed, these publications can provide a good
repository of benchmark and best practices information.
Best Practices Digest
Best Practices Digest is a half-yearly publication which covers four core sub-sections;
Best Practices Sharing, Performance Measures, Knowledge Forum and BP Events and
Happenings.
e-Benchmark Guidebook
The e-Benchmark guidebook is a book that highlighted step-by-step guide to utilise the ebenchmark system for members of the e-Benchmarking Communities.
BP Human Resource Case Study
This publication features exemplary Human Resource practices of leading organisations
in Malaysia such as Intel Malaysia, Samsung SDI (M) Bhd., Infineon Technology
Malaysia and Motorola (M) Sdn. Bhd. (BP HR Case Study 1). While BP HR Case Study 2
covers the best practices learnt in Petronas, Ritz-Carlton Kuala Lumpur, Nestle (M) Bhd.
and Telekom Malaysia Bhd.
53
5.0 Phase Three of Benchmarking

Model
5.1 Planning for Adapting Best Practices
10
11
12
13
14
15
16

After completing Phase 2 where participants take learning back to their
organisation, the benchmarking team should meet, discuss and initiate action. They
need to plan to adapt Best Practices from observations learnt during the site visits
and experiences shared during the session on sharing of findings in Phase 2 of
MPC Benchmarking Model.
The proposed improvements recommended (during Phase 2) should be
implemented, for continuous improvement the very essence of benchmarking. It is
important to establish detailed action plans and accountability for identified
improvements.
54
It is not possible to adopt all the best practices learnt as one needs to adapt to own
organisations culture, resources, skills of employees, IT investment, level of
technology, budget and other constraints. The benchmarking team needs to
discuss and prioritise strategic programs/action plans by integrating with existing
management activities, if any (example QCC, 5S, TQM, SCM, CRM, 6 Sigma, and
ISO 9000).
Also it is pertinent that the benchmarking team understands the linkage to their
organisations Strategic Quality Plan (SQP). The team needs to ensure that the
proposed action plans, the proposed target (whether short or long term) can
ultimately achieve strategic objectives and vision of their organisation.
No. Action
1.
2.
3.
Check
Are the processes to be benchmarked clearly identified?

Did the action plans show how the performance gap would be
closed?
Has the team acquired the needed information, conducted
analysis and is now ready to use the data to set new
performance goals?
4.
Have implications of the recommendations been evaluated?
5.
Has the team gain senior managements acceptance?

Have specific, measurable goals and objectives been
incorporated into action plan?
Have these goals been clearly communicated throughout the
organisation?
6.
7.
5.2 Implementation of Best Practices
10
11
12
13
14
15
16

Apply the learning, develop full resources and
timing plan/schedule to implement changes to
close the gap identified. Change is the ultimate
objective of benchmarking. Once the action
plans have been developed/designed, it is time
to implement them.
55

No. Action
1.
2.
Check
Are the process owners and senior management ready to

implement the changes?
Do operational plans reflect the action plan?
3.
Has each plan been assigned to the individual/team responsible

for its implementation? (in terms of authority, responsibility,
relationship and accountability)
4.
Do the action plans require incremental change (finetuning and

adaptation of current practices) or whether the improvements
require strategic organisational change (reengineer the current
practices)?
5.3 Monitoring the Result
10
11
12
13
14
15
16

Implement change and regularly assess and report progress improvement.
No. Action
1.
2.
3.
4.
5.
6.
Check
Does the benchmarking team continuously communicate

benchmarking progress with key stakeholders and process
owners throughout the organisation?
Are key metrics being monitored closely?
Are there frequent progress reports to evaluate the efficiency and
effectiveness of the implementation plans being prepared and
tracked?
Are there incentives in place (recognition and reward) for
individuals and teams to celebrate the successful
implementation) accomplishment of the implementation plan?
Are there progress reports to identify problems or issues
discussed during implementation?
Are there adequate management support to help overcome
resistance to change that may occur?
56
5.4 Standardisation
10
11
12
13
14
15
16

Standardisation of the daily work is carried out for improvement. While simple
improvement activities may just require a revision of operation standards, complex
activities can be taken up as a project activity by the QCC or any cross functional
and innovative teams.
Standardisation is not only important in solving abnormalities or defects, it helps to
achieve improvement in quality. There should be a system to periodically check
that standardisation has been implemented as planned and is running smoothly.
No. Action
1.
Are these plans for periodic recalibration?
2.
Is there a system for assessing standardisation?
3.
Is there a criteria for drafting and control of standards?
4.
Are records available on improvement activities?
5.
Has the team carry out any systematic monitoring process?
6.
Are the appropriate solutions been standardised and accepted as

standard operating procedures (SOP)?
7.
Is there a systematic follow up to ensure that the improved

SOP is maintained?
8.
Have the implementation issues been reconciled?
9.
Have the successful changes being documented?
Check
57
5.5 Daily Control
10
11
12
13
14
15
16

Daily control and management is essential to ensure that the operational plans
are carried out in accordance with the standards. The scope of responsibility
should be clarified in the Quality Control process chart. To monitor the level of
achievement, various tools to present control information visually and statistically
techniques such as graphic and control charts can be used.
Overall, evaluation on the implementation of Best Practices need to be done
periodically to verify that changes can be sustained. Post audits and review
meetings are necessary.
Finally the benchmarking team could brainstorm further, either to continue on the
existing benchmarking project or select a new area.
No. Action
1.
Is there a system to facilitate daily control of work activities to

enable employees to improve their own quality and business
performance?
2.
Are daily records been maintained to monitor process capability,

manufacturing capability, quality level and control limits?
3.
Is there a system to enable quick implementation of action or

remedial action when abnormalities emerge?
4.
Are there standardised methods to report new abnormalities to

concerned parties and measures to prevent recurrence?
5.
Are there methods of checking on the SOP for future out-ofcontrol events?
Check
58
6.0 Conclusion
Thus in a nutshell, benchmarking is not merely copying the most successful
methods or practices. The end result of benchmarking is change, learning how to
change, implementing and managing change for continuous improvement.
Benchmarking helps to promote an innovation and knowledge driven culture in
business.
if you know neither yourself nor your enemy, you will succumb in every battle. If
you know yourself but not the enemy, for every victory gained you will also suffer
a defeat. If you know yourself and your enemy, you need not fear the results of a
hundred battles.
Sun Tsu
59
7.0 Glossary
Audit
An organisation-wide assessment of the performance
and shortfalls of its mission, scope and services. An
audit is the first step in the benchmarking process. All
members of the organisation to which the
benchmarking item has direct relevance should be
asked to participate in the audit. The larger the issue
to be benchmarked, the more levels of the
organisation should be surveyed. For significant
leadership issues, include board members, key
donors and perhaps vendors and customers. Audits
are often in the form of questionnaires and surveys;
the key to a successful audit is asking the right
questions and providing a safe arena for participants
to honestly share their views.
Baseline
An organisation's actual or current level of results for
a particular performance measure.
Benchmark
A measured 'best in class' achievement. The
performance level which is recognised as the
standard of excellence for a specific business
process.
Benchmarking
Benchmarking is a systematic and continuous
process of searching, learning, adapting and
implementing the best practices from within your
organisation or from other organisations towards
attaining superior performance.
-National Productivity Corporation, MalaysiaBenchmarking gap
The difference in performance between the
benchmark for a particular activity and other
companies in the comparison; the measured
leadership advantage of the benchmark organisation
over other organisations.
Best-in-Class
The most successful organization of a group based
on its success in meeting or exceeding benchmarks
relative to a particular outcome.
Best Practice
Superior performance within a function independent
of industry, leadership, management, or operational
methods or approaches that lead to exceptional
performance; best practice is a relative term and
usually indicates innovative or interesting business
practices which have been identified as contributing
to improved performance at leading companies.
Business Process
A series of interrelated activities which convert inputs
into results (outputs). Processes consume resources
and have a limited capacity and capability.
Benchmarking requires a standard set of process
classifications which are understood by both parties in
a benchmarking project. The Best Practice Club has
defined these in a Business Process Classification
Scheme.
Capability mapping
A method used by benchmarking teams to analyse
the nuts and bolts of an organization, in order to
assess its unique capabilities. Nuts and bolts, also
known as "infrastructure" would include all the
tangible resources available to a particular
organisation,
including
technical,
equipment,
manufacturing, and transportation resources. For
example, an organisation that wanted to launch a
publishing program would need to assess their
current ability to design, reproduce and deliver their
publication, and compare their resources with other
organisations attempting similar things.
Common Interest Group
People who are linked through a mutual concern or
commitment are considered to be members of a
common interest group. Although this link is often
informal, it is described by the participants' willingness
to declare their commitment and trade insights and
experience. Because of the Internet, common interest
group members can now effectively network and
share ideas, regardless of geographical limitations.
Competitive Analysis
The nitty gritty of the benchmarking process,
competitive analysis looks at the benchmarking gap
between your organisations and those best-of-breed
organizations that provide leadership within your
industry. More than just measuring the gap, the
analysis attempts to explain the difference between
the performance of your organisation and those
against which you are compared. If the benchmarking
gap describes the "what", the competitive analysis
begins to answer the "why."
Competitive Benchmarking
A measure of organizational performance compared
against competing organisations.
Continuous Improvement
The ongoing quest for improvement in all aspects of
the business or service process. Designing the
concept of continuous improvement into your
benchmarking activities sets an optimistic tone for
continued growth, continued improvement.
Core Competencies
Describe strategic business capabilities that provide a
company with a marketplace advantage.
Critical Success Factors (CSF)
Quantitative measures for effectiveness, economy,
and efficiency; those few areas where satisfactory
performance is essential in order for a business to
succeed; characteristics, conditions, or variables that
have a direct influence on a customer's satisfaction
with a specific business process; the set of things that
must be done right if a vision is to be achieved.
Customer
All businesses have "customers," regardless of their
nonprofit status. Many organizations have more than
one type of customer, and will need to analyze those
relationships separately. Customer satisfaction, a key
60
goal in any benchmarking process, is even more

essential for many nonprofits, especially for those
who rely on the public for earned income, such as
museums, or those who are delivering critical
services to a population in need, such as health
clinics. Thinking of your audience as a "customer" is a
helpful way to analyse their needs and your success
in meeting their needs.
Customer Advocate
The role played by a member of some teams where
that individual pleads the case of the customer and
calls the attention of the team to issues which would
concern the customer.
Customer Analysis
The evaluation of customer's conditions and trends
relative to a particular product or service of a business
- tools include customer focus groups, field trial
testing,
customer
satisfaction
measurement,
customer feedback systems, and the use of various
types of questionnaires and survey instruments.
Enabler
Those processes, practices, or methods that facilitate
the implementation of a best practice and help to
meet a critical success factor; enablers help to explain
the reasons behind the performance indicated by a
benchmark.
Entitlement
The best that can be achieved in process
performance using current resources to eliminate
waste and improve cycle time; obvious improvements
identified during the process of benchmarking and
which may be accomplished as short- term goals.
External Benchmarking
The process of looking outside your organisation to
examine how other organizations designed to meet
the same objectives are meeting them in ways which
are better, faster or cheaper. External benchmarking
asks, "in your field, who is the 'best' at what are they
doing and what makes them so good?" Once those
"best practices" are identified, the methods and
procedures of your own organisation are compared or
"benchmarked" against those used by the topperforming firms. The lessons learned from lead
organisations are then imported into your
organisation.
Functional Benchmarking
Process benchmarking which compares a particular
business function at two or more companies.
Generic Benchmarking
A type of benchmarking methodology that compares
one business process at several companies that may
or may not be in the same industry. Although it is not
an apples to apples comparison, it may be an
interesting way to glean new process ideas. For
example, an arts center that is having trouble with its
membership billing, may want to compare
membership billing practices at a health club, an
internet service provider and a museum in another
part of the country. (See also process benchmarking)
Global Benchmarking
The extension of strategic benchmarking to a global
scale.
Goal
One of the happy by-products of benchmarking, a
goal is a specific, measurable, target which gives the
organisation a particular direction. A goal must be
measurable, so that it is easily recognised as
achieved, and it must be linked to a time frame. For
example, "we want to reach more senior citizens," is
not a goal. "Based on our capability assessment, and
measuring ourselves against similar organisations,
we have set a goal to reach 25% more senior citizens
by this time next year," is an excellent goal. The
action steps that the organisation takes to reach that
goal can now be tracked for effectiveness.
Short Term Goal: Anything that can be
accomplished in a short time frame, usually 12
months or less.
Long Term Goal: A long term goal is anything
which needs at least 1-5 years to be
accomplished.
Impact Area
One of four key components of a social sector
organisation's ultimate impact:
Management
effectiveness, Financial sustainability, Community
engagement, or Program performance.
Implementation
The specific steps taken when attempting to reach a
specific goal is known as "implementation." The
implementation phase occurs after goals have been
set and a strategy has been agreed upon. Because it
is a "real world" activity, care must be taken to
observe how effective implementation is, and how
well the participants (who may not have participated
in the benchmarking process) are handling it. For
example, if a senior citizens center has set a goal of
serving 25% more people, they may have decided on
a strategy of creating a "visiting activity program" to
be taken to local nursing homes. The implementation
of the strategy might include the creation of traveling
activity carts and the training and development of
volunteers. To gauge effectiveness, the volunteers,
the program participants and their families, and the
nursing home staff should all be included in the
assessment.
Internal Benchmarking
The process of looking inside your organisation at its
own historical performance, and projecting future
goals based on that track record. Such planning is
very helpful, keeping an organisation focused on its
goals and setting aggressive targets for employees to
work toward. However, one shortfall of internal
benchmarkingis that it doesn't tell you how to meet
those goals or increase your performance.
Key Business Process
Those processes that influence the customer's
perception of your business.
Key Outcomes
Outcomes that are essential to the success of your
organisation.
61
Milestone
A milestone is a significant point of achievement or
development, which describes progress toward a
goal.
Model
Models are used extensively in business, to describe
processes or strategies that are difficult to understand
directly. A model may be a description ("The Titanic of
Software Solutions"); it might be a representation
(such as a scale model of a building); or it might be an
analogy (think of our marketing strategy as a bungee
jump into the abyss of public opinion!!)
Networking
A decentralised organisation of independent
participants
who
develop
a
degree
of
interdependence and share a coherent set of values
and interests.
Outcome
A desired change in behavior or condition brought
about by a particular set of activities or business
processes.
Performance Benchmarking
Measurement of the performance of one company's
product against those of another company.
Performance Indicator
A qualitative measure that demonstrates how well a
process achieves a particular outcome.
Process
A process is a series of related activities and
conversations which is is designed to gather input,
and convert it into a desired result. A process may be
anything from billing customers to creating an
educational program, to designing an exhibit.
Benchmarking is a process. By definition, a process
has several key characteristics: it has specific
standards which determine if it's done correctly, and
which let it be repeated by others; it consumes
resources such as time, money or energy; and it
responds to quality control mechanisms that can help
the process be done more efficiently. A more efficient
process might result in things being done faster,
cheaper, or result in the creation of a better product or
service.
Process Benchmarking
The type of benchmarking that compares a particular
organisational process with other organisations that
are recognised as leaders in managing that particular
process, is called "process benchmarking." For
example, an organisation that has had poor turn-outs
at seminars, may do research with outstanding
seminar providers, to discover what they are doing to
attract and enroll potential attendees. An organisation
that wants to improve the reading scores of their afterschool program participants may want to examine the
processes used at other, similar programs.
Process Stakeholder
Although not directly responsible for the outcome of a
particular process, these are the people who have an
interest in how a process works, or is improved. In the
example of the membership billing process for a small

museum, the stakeholders may be the customer
service representatives, the marketing personnel, the
cashier at the gift shop, and the members
themselves.
Questionnaire
A questionnaire is a set of written questions, requiring
written answers, which ask for information about an
organisation or its constituents. A questionnaire might
ask for information that may be statistically useful
(how many phone calls from unhappy customers do
you receive on a weekly basis?) or it may be personal
(how many members of your family participate in our
programs? What are their ages?) A questionnaire
may also elicit opinions, suggestions and feedback.
Depending on the nature of the questionnaire, the
participants may prefer that their responses be
anonymous. The sensitivity with which a
questionnaire is crafted, distributed and collected, will
greatly increase the chances that participants will
respond quickly, honestly and thoroughly.
Reengineering
The radical redesign of business processes,
organisational structures, management systems, and
values of an organisation to achieve breakthroughs in
business performance.
Strategy
The blueprint for accomplishing a particular goal,
complete with action steps and a timeline. To make
for more effective implementation, all decisions
related to strategy should be shared with the staff
who will ultimately be responsible for their
implementation.
Strategic Benchmarking
The type of benchmarking that compares alternative
strategies within benchmarking partners, is called
"strategic benchmarking". Strategic benchmarking, in
many ways, is devoted to exploring alternatives
(before they are implemented) and to improving
performance by adopting strategies to meet certain
goals. For example, an organisation that is looking to
attract new audiences to their programs, might review
the strategies that their benchmarking partners have
used to accomplish the same thing. By analysing
critical data, organisations are able to select,
eliminate or adapt other strategies that have been
tried by others in the field, in the attempt to meet their
own goals.
Strategic Intent
A statement of "strategic intent" is used to describe
the unique ambitions of a particular organisation
undergoing a benchmarking effort. This statement
can provide a useful sense of purpose for staff and
benchmarking team members, as well as provide a
guide when allocating resources or setting goals.
Success Equation
A benchmarking tool that helps an organisation define
key outcomes and measure performance within each
impact area.
62
Survey
A written query of individuals, designed to collect data
specific to a group or sub-group of a larger
population. Although used interchangeably with
questionnaire, surveys are shorter and more focused
on gathering snapshot, demographic data, rather than
eliciting individual feedback.
Theory of Change
An organisation's strategy for solving a particular
problem or bringing about a set of outcomes.
Vision
The stated dream of what an organisation wants to
be, where it wants to go, or what it wants to stand for.
For a vision statement to be meaningful, it must be
achievable and measurable.
World Class
Leading performance in a process independent of
industry, function, or location.
Time Lapse Data

Time is one of the best ways to measure progress.
This type of information can provide a quick snapshot
into how something has grown or deteriorated over a
period of time. How many people attended your
seminars last year versus this year? How does staff
turnover compare from one year to the next? These
types of internal benchmarks may yield valuable
insight that, coupled with other performance data, can
help you determine everything from service standards
to how your organisation stacks up in a particular
industry.
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Malaysia Productivity Corporation ( MPC),

2.0 Internal Preparation Prior to Embarking on a Benchmarking Project

3.0 Phase One of the MPC Benchmarking Model (Benchmarks)

4.0 Phase Two of the MPC Benchmarking Model

5.0 Phase Three of the MPC Benchmarking Model (Implementation)

Figure 2: Examples of Benchmarks

Figure 3: Examples of Best Practices

Figure 4: Business Process Classification Framework

Figure 5: Benchmarking Process

Figure 6: A Typical Benchmarking Team Structure

Figure 7: MPC Benchmarking Model

Figure 10 : Competitive Scores Report

Figure 11 : Ranking Report of e-Benchmark

Figure 12 : Human Resource Dashboard for Direct Labor in 1 Half of 2002.

Checklist 2 : To Assess an Organisations Readiness for Benchmarking

Checklist 3 : Resources and Personal Involvement

Checklist 4 : Leadership Commitment

Checklist 5 : Managing the Resources

Checklist 6 : Team Preparation

Checklist 7: On-Site Interview

Checklist 8 : Before the Site Visit

Checklist 9 : During the Site Visit

Checklist 10 : Planning for Adapting Best Practices

Checklist 11 : Implementation of Best Practices

Checklist 12 : Monitoring the result

Checklist 14 : Daily Control

Checklist 2 : To Assess an Organisations Readiness for Benchmarking

Checklist 3 : Resources and Personal Involvement

Checklist 4 : Leadership Commitment

Checklist 5 : Managing the Resources

Checklist 6 : Team Preparation

Checklist 7: On-Site Interview

Checklist 8 : Before the Site Visit

Checklist 9 : During the Site Visit

Checklist 10 : Planning for Adapting Best Practices

Checklist 11 : Implementation of Best Practices

Checklist 12 : Monitoring the result

Checklist 14 : Daily Control

Box 2 : Briefing Package

Box 3 : Example of Questionnaire Development Part 1 : Introduction

Box 4 : Rule of Thumb in Choosing the Type of Questionnaire

Box 5 : Example of Questionnaire Development Part 2 : Question on Process

Box 6 : Best Practices in Managing Municipal Solid Waste

Box 7 : Best Practices in Human Resource Management

Box 8 : MPCs Best Practices Sharing Tools

Box 9 : MPCs Best Practices Sharing Tool (continued)

1.0 An Overview of Benchmarking

1.1.1 What is Benchmarking?

Benchmarking is defined as the practice of being humble enough to admit that

Not Mere Copying

Figure 1 : Benchmarking Overview

To know your position/operation

Only competitive analysis

1.1.2 What is Benchmark?

Figure 2: Examples of Benchmarks

1.1.3 What is Best Practices ?

Figure 3: Examples of Best Practices

Calling MAS Reservation to make a booking

Establish, track and evaluate quality and productivity measures for

1.1.4 Types of Benchmarking

1.2 Critical Success Factors For Benchmarking