Total Quality Management

September 16, 2009

The Evolution of Benchmarking: The Xerox Case

The company that invented photocopier in 1959 and maintained a virtual monopoly for many years thereafter, like “Coke” or “Kleenex,” “Xerox” became a generic name for all photocopiers. By 1981, however, the company’s market shrank to 35% as IBM, Kodak developed high-end machines and Canon, Richo, and Savin dominated the low-end segment of the market. The Xerox vice president of copier manufacturing remarked, ” we were horrified to find that Japanese were selling their machines at what it cost us to make ours…we had been benchmarking against ourselves. We weren’t looking outside.” (more…)

September 12, 2008

Benchmarking

What is benchmarking?

Benchmarking is a way to go backstage and watch another company’s performance from the wings, where all stage tricks and hurried realignments are visible.

In Joseph Juran’s 1964 book Managerial Breakthrough, he asked the question:

What is that organizations do that gets result so much better than ours?

The answer to this question opens door to benchmarking, an approach that is accelerating among many firms that have adopted the total quality management (TQM) philosophy.

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The Essence of Benchmarking

The essence of benchmarking is the continuous process of comparing a company’s strategy, products, processes with those of the world leaders and best-in-class organizations.

The purpose is to learn how the achieved excellence, and then setting out to match and even surpass it.The justification lies partly in the question: “Why reinvent the wheel if I can learn from someone who has already done it?” However, Benchmarking is not a panacea that can replace all other quality efforts or management processes.

The Evolution of Benchmarking

The method may have evolved in the early 1950s, when W. Edward Deming taught the Japanese the idea of quality control. Other American management innovations followed.

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The best example is Toyota Motor Corporation’s following the footsteps of Ford Motor Corporation albeit with the adaptation of the Ford’s Just-in-case system into Toyota’s Just-in-time system. The term “benchmarking,” however, was not coined by that time.

The term “benchmarking”  emerged when the idea took ground in US during 1980s when Xerox, Ford and Motorola became the pioneers of benchmarking in USA. Robert Camp, the logistics engineer who initiated Xerox’s benchmarking program and who is generally regarded as the guru of the benchmarking movement,  defines it: “Benchmarking is the search for industry best practices that lead to superior performance”. (more…)

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