Machine Design
  • Resources
  • Members
  • Directory
  • Webinars
  • WISE
  • CAD Models
  • Advertise
    • Search
  • 3D Printing & CAD
  • AUTOMATION & IIOT
  • Robotics
  • Motion Systems
  • Materials
  • Video
  • Data Sheets
  • Topics
    Industry Markets3D Printing & CADAutomation & IIoTFastening & JoiningMaterialsMechanical & Motion Systems Medical DesignRobotics
    Resources
    Machine Design ResourcesWISE (Workers in Science & Engineering)Company DirectorySearch Data SheetsContributeDigital Edition ArchivesCSIA Exchange
    Members
    ContentBenefitsSubscribe
    Advertise
    https://www.facebook.com/MachineDesignMagazine/
    https://www.linkedin.com/company/10998894
    https://twitter.com/MachineDesign
    https://www.youtube.com/channel/UCXKEiQ9dob20rIqTA7ONfJg
    1. Archive

    The lost art of benchmarking

    May 5, 2005
    Benchmarking was a 1990s management buzzword that in recent years lost its luster.
    Staff

    David A. Brockman
    CPA, Director of Business and Assurance Services Brockman, Coats,
    Gedelian & Co. Akron, Ohio


    However, benchmarking remains a highly useful tool for establishing important metrics as Key Performance Indicators (KPIs), profitability, and compensation levels. Benchmarking looks outward to find best practices, then measures or judges actual business operations against those standards.

    Some business owners view benchmarking as costly market research. But with proper planning, it can be done in-house and inexpensively. Where to begin? Identify ways to improve your company that tie in with its overall objectives. Such goals should be quantifiable. For example, such intangible goals as "improving communications" are tough to benchmark, while "raising client satisfaction" is a good candidate for benchmarking.

    Benchmarking levels for which to compare your company's progress can be found in trade journals, industry publications, and ratio analysis resources as The Risk Management Associations' Annual Statement Studies, Financial Ratio Benchmarks. Or, you can simply establish your own internal benchmarks.

    Many new to benchmarking mistakenly track too much information at once. Instead, identify and monitor just a few key areas. For example, one manufacturer focused on shortening setup time for a particular part and process. Management identified specific goals set against established benchmarks then monitored progress toward reaching them. Their efforts shaved 25% off setup time, or about $100,000 in labor annually, savings that went directly to the company's bottom line.

    In another case, a growing medium-sized manufacturer needed to raise process efficiency because of competitive pricing pressure and labor-cost hikes from a shortage of skilled workers. Management identified uptime/downtime ratio and percent of defective product as KPIs, and set measurable goals for improving them. The company emphasized training of equipment operators and scheduled regular inspections of processes. The result: less downtime, improved product quality, and more satisfied customers. Profit margins improved 25%, despite the lowering of prices to customers by 10%.

    Yet another company was seeing a significant decline in sales. It implemented a benchmarking program that set goals for and tracked face-to-face contact with its more significant OEM accounts as well as interactions with outside sales reps. The effort led to customers getting more attention from sales reps which boosted sales 5% the first year and 15% the next.

    For the benchmarking process to work, however, management must involve the entire organization, from plant-floor workers, to customer-service reps. Be sure team members are part of the goal-setting process and reward them when their performance meets specified levels.

    Benchmarking need not be complicated or expensive. No sophisticated software is needed; an Excel spreadsheet can do the job. Start the process slowly and focus on one key area for improvement.

    Brockman, Coats, Gedelian & Co. (www.bcgcompany.com) is a certified public accounting and consulting firm.

    Continue Reading

    The Future of Connected Worker Technology and Its Impact on Industrial Training

    R&D Spotlight: Inventing Wearable Sensors that Monitor Uric Acid in Sweat

    Sponsored Recommendations

    Molex: Enabling Industry 4.0 on the Factory Floor

    Nov. 27, 2023

    Industrial Automation & Process Controls

    Nov. 27, 2023

    Please verify you are a human

    Nov. 27, 2023

    Please verify you are a human

    Nov. 27, 2023

    Voice your opinion!

    To join the conversation, and become an exclusive member of Machine Design, create an account today!

    I already have an account

    New

    AI: Unleashing the Power in Manufacturing

    The Cyber-physical Training Module

    Custom Machine Builder Develops Automation Solution That Increases Production Capacity Four-Fold

    Most Read

    Brushed vs Brushless Motors: Which is Best for your Application?

    Edge Computing & Gaining Value

    How Much Should a Bolted Joint be Tightened?

    Sponsored

    Schmersal Product Demo: SLC BLE

    Inductive Sensors

    Electromechanical magnetic sensors

    Machine Design
    https://www.facebook.com/MachineDesignMagazine/
    https://www.linkedin.com/company/10998894
    https://twitter.com/MachineDesign
    https://www.youtube.com/channel/UCXKEiQ9dob20rIqTA7ONfJg
    • About Us
    • Contact Us
    • Advertise
    • Do Not Sell or Share
    • Privacy & Cookie Policy
    • Terms of Service
    © 2023 Endeavor Business Media, LLC. All rights reserved.
    Endeavor Business Media Logo