Benchmarking in

Construction

Azif A K [221088]
Mohamed Sameer [221098]
Joseph George [221104]
Mehboob Ali Nadaf [221108]
 1. What is Benchmarking?

Comparing and measuring the

organization performance against
other similar organizations in key
business activities, and then using
lessons learned from the best ones to
introduce breakthrough improvements.
 2. Types of Benchmarking

• INTERNAL - Benchmarking against internal

operations.
• COMPETITVE - Benchmarking against
external direct product competitors.
• FUNCTIONAL - Benchmarking against
external functional best operations or
industry leaders.
• GENERIC - Benchmarking a process in
one or several unlike organizations.
3. Benchmarking Process

Planning

Improving Collecting
Practices Data

Analysis
 3.1 Planning

• Determine the purpose and scope of

the project
• Select the process to be
benchmarked
• Choose the team
• Define the scope
• Develop a flow chart for the process
• Establish process measures
• Identify benchmarking partners
 3.2 Collecting Data
• Conduct background research to gain
thorough understanding on the
process and partnering organizations
• Use questionnaires to gather
information necessary for
benchmarking
• Conduct site visits if additional
information is needed
• Conduct interviews if more detail
information is needed
 3.3 Analysis

• Analyze quantitative data of

partnering organizations and your
organization
• Analyze qualitative data of partnering
organizations and your organization
• Determine the performance gap
 3.4 Improving Practices

• Report findings and brief

management
• Develop an improvement
implementation plan
• Implement process improvements
• Monitor performance measurements
and track progress
• Recalibrate the process as needed
 4. CASE STUDY
• COMPANY - Slovenian company Riko Houses Ltd.
• PRODUCT - Solid wood bio-houses RIKO on the basis
of widely experienced German patent.
• WHAT LEAD TO BENCHMARKING?
 Company’s strategy to the enlargement of
production scope, improvement of business
efficiency and increase of export rate.
 Increasing trend of enquiries for prefabricated
houses due to changes of the population dwelling
habits, especially in Western European countries.
• BENCHMARKING PARTNERS- Jelovica Houses Ltd.,
Marles Houses Ltd. and Riko Houses Ltd.
 4.1 Steps involved in
benchmarking
1. Selection of benchmarking partners
2. Identification of efficiency keys relevant for prefab
house production, namely TIME, PRICE and QUALITY.
3. Selection of indicators specifying productional and
economic efficiency
4. Comparison of results in the fourth phase: the
benchmarking team has established the
importance of gaps in comparison with the best
practices in Slovenia and analysed the reasons for
these gaps.
 Contd…..

5. Propositions for improvement after the comparison

with the best prac­tices
In this phase of the process the company has
prepared an improvement pro­gramme considering
the results obtained with the benchmarking method
and today this programme has already been taking
place. (applied SWOT analysis)
 4.2 Efficient Key
Components

Scope of production Market share in Slovenia Income/fixed assets

Productivity Net profit Economic efficiency

Operating revenues Inventories Short term indebtedness

Capital/receivables
Labour costs Quality
tie up

Fixed assets Share of material in sales Time

Share of exports Share of labour cost in salesPrices

 4.3 Suggestions to Riko
Houses Ltd.
The improvement plan based on benchmarking
suggested following measures
• Improvement of technology.
• Better exploitation of available potentials (increase in
productivity for 30 – 50 %).
• Establishment of norms for the purchase of materials,
for inventories, capital tie-up, costs.
• Pricing policy and prices including cost price planning
(structure), differ­ential policy of selling prices (basic
price offer, additional offer, differential selling
commissions).
• Developing of new activities in the domain of
marketing.
 4.4 Improvement
Proposition
Field of Activities Office Envisage
Bearer d Effect
PURCHASE:
- efforts to reduce prices of materials / optimal
scope of materials purchase (payment and time) /
time limits
PRODUCTION:
- technological improvements / rise in productivity
by x %
-ASSEMBLY:
rise in economic efficiency/reduction of
complaints number
- reduction of assembly hours number /
improvement of assembly organization / choice of
the best subcontractors
MARKETING:
- development of marketing strategy -
development of approach to new markets - new
selling methods
FINANCING:
BENCHMARKING: - follow-up of improvement
 5. Conclusions
• The benchmarking process as performed until now in
the company Riko Houses Ltd. provides insight,
comparison and identification of gaps on the basis of
internal and external data.

• The selected efficiency keys have pointed out to the

important differences between the benchmarking
partners. On the other hand the proposed
improvement measures can only lead progressively
to the efficiency improvement.

• The experience gathered until now can only confirm

the above mentioned fact that benchmarking is
 Contd…

• The company Riko houses has been faced with

strategic dilemmas and corre­sponding searching for
new opportunities. Therefore, the content of
benchmark­ing method as an approach and way of
solving problems represents an extremely useful
guidance.

• Benchmarking is a handy tool for the company to

acquire new useful skills. And these new skills will
help managers to make better business decisions.
THANK YOU !!!!!!!!!