For On The Floor: Is Benchmarking Part Of Your Strategy?

When was the last time someone in your organization suggested a benchmarking study, for maintenance or any other company function? Here’s my guess: A long time, if ever. A chief exception: multi-site operations where cross-site benchmarking is policy. But that’s internal benchmarking, which was not the focus of this month’s questions for our MT Reader Panel. We were looking for Panelists’ experience with external benchmarking (where an organization’s cost and performance data is evaluated against that of the same function at a different, similarly sized company, especially one identified as best-practice).

According to experts, the external approach is where the real value of benchmarking lies. And this would appear to have natural appeal for maintenance professionals who understand that measurement is the precursor to any successful improvement project. But in industrial maintenance, as reported by some of our Panelists, benchmarking often fails or is ignored.

“I have no experience with or knowledge of benchmarking and my company does not do it,” says a Corporate Engineer from New England with more than 30 years of industrial service.

Another has benchmarking experience, but it hasn’t been positive:

“We try but never seem to get it right,” says a PM Leader from the Midwest. “In my 14-plus years at my present employer we have started many types of benchmarking, but have never followed through on any of them. There have been many attempts to set goals as benchmarks, suggested by both management and union. Most of the time, bits and pieces are thrown together and they don’t work out.” This Panelist adds that a previous employer “had no benchmark programs so I can’t include anything from them.”

Meeting the benchmarking challenge
Globally, and among a variety of business sectors, use of benchmarking trends positively, according to the Germany-based Global Benchmarking Network. The group’s most recent global survey, published in 2010 and based on 450 responses, shows that about 40% of respondents benchmark for best practices (considered the most valuable approach), with future adoption of this type and two others (“performance” and “informal”) predicted to increase significantly. And while more than a fourth of the study’s respondents are manufacturers, the study’s top-listed function area in which to perform benchmarking is “customer service.” This may suggest, as do some of our Panelists, that benchmarking in maintenance and operations presents a greater challenge than other areas.

Not all of our Panelists lack benchmarking experience. A Maintenance Coordinator in the Northeast, for example, says his corporation believes strongly in all types of benchmarking, which he defines as “formal,” “informal” and “telephone.” His formal approach matches the external process described above. The informal is less rigid and not so documented. “It’s somewhat opinion-driven, but still must have facts,” he explains. “Touring a supplier’s factory is a good example. We call this a benchmarking opportunity.”

This Panelist’s third benchmarking approach—telephone—is a product of the high-tech age, he says, “where you can easily set up a video conference call and accomplish worthwhile benchmarking at a very reasonable price: no hotels, no meals and zero travel expenses.”

Another Panelist uses benchmarking primarily to identify gaps in skills, and provide training to fill those gaps, rather than for plant benchmarks. A Consultant based in Canada, he works with clients to define skills demonstrated by those “who perform at the highest level, and who can complete a task without error, damage to parts or equipment and tools and without injury.” The time required to complete tasks along with specific plant/industry requirements are reflected in the process, he says.

What’s the value?
“Process/performance benchmarking is interesting,” says a Panelist who has evaluated several successful “performance” and “best-practice” benchmarking processes in the baking industry. A former Process Engineer who now teaches at the college level, he says process benchmarking “seems to be driven both by the latest equipment available as well as information from technical articles and even informal discussions.” He adds that many of the executives in his review “visit other bakery units and discuss process, packaging, freezing and basic handling methods, which applies the ‘best-practices’ approach.” Within this Panelist’s study group, benchmarking has filtered down to the production floor and the maintenance engineering department, where communications with other maintenance groups, he says “has improved everyone’s capabilities in education, repairs, troubleshooting and purchasing.”

According to nearly 70% of the respondents to the Global Benchmarking Network study, the top benefit of benchmarking projects is improved performance of processes. Other gains include addressing major strategic issues (33%); learning what other organizations are doing (28%); improved financial performance (23%); and encouraging a shift to a learning culture (18%). The study analysis also makes clear that while benchmarking-related improvements are often hard to measure financially, approximately half of respondents report their financial return from a typical benchmarking project as anywhere from $11,000 to $100,000 after one year. Not bad.

Interestingly, the study also covers reasons why benchmarking is not pursued. The top three culprits are “lack of resources,” “lack of benchmarking partners,” and “lack of top management commitment.” Also on the list: “lack of understanding of benchmarking” and “fear of sharing information.”

Drawbacks like these don’t bother our Maintenance Coordinator Panelist from the Northeast. “Benchmarking done right can really make a difference on the bottom line,” he says, but adds that certain rules must be followed for it to work properly. For example, participants “must be open-minded, level-headed, process-educated, trusted and not easily intimidated,” he advises. “You want an honest evaluation and report.
Also, the person or team you commit to this endeavor must know what problems you have and what a solution might look like. Depending on how open you are, there’s much to share and much to learn.”

Sharing of operating experiences is common in this Panelist’s industry, he says, thanks in part to lessons learned from a serious, game-changing accident at a similar plant more than 30 years ago. “We now share everything,” he reports, “from valve maintenance to pump performance, even to lessons learned from rigging. We are also standardizing tasks and certifications.” His company provides courses in benchmarking that include one designed to qualify those who perform the process. Benchmarking works for his operation, he says, because “we are a learning organization and we’re committed to learning from others so we can improve.” MT

About the MT Reader Panel

The Maintenance Technology Reader Panel is comprised of working maintenance practitioners who have volunteered to answer bimonthly questions prepared by our editorial staff. Panelist identities are purposely not revealed, and their responses are not necessarily projectable. The Panel welcomes new members: Have your comments and observations included in this column by joining the Reader Panel here.