Thinking Outside the Industry: Improve Performance With Benchmarking

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Comparing_Apples_to_OrangesIn an ideal scenario, companies could put all daily operational duties aside in order to look to the future and develop a strategic plan for delivering breakthrough performance in the coming years. In reality, many operational leaders simply don’t have the time, luxury, or resources to look very far into the future while still maintaining their daily operation. This situation ultimately results in uniform improvement objectives, without consideration for current performance levels and opportunity to improve.

This is where benchmarking can play a vital role by helping companies to focus their limited resources to improve operational performance and identify their greatest opportunities. While measuring your company’s performance in the industry against your peers is important, looking at success stories outside of your trade can also give you valuable organizational tips for improving your operation.
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Not All Metrics are Created Equal

One of the biggest mistakes I see companies making is when they know they need to improve their performance, but instead of focusing on specific areas that need adjustments, they simply establish objectives to improve everything in the same amount across the board. A by-product of this approach is that companies try to get the same 10% improvement from a metric where performance is already top notch, as opposed to focusing on another area that may have room for a 20% improvement. Identifying the areas with the greatest opportunity for improvement is a key function of benchmarking. The TSIA field services benchmark balances customer, employee, and financial performance and assists in the tactical implementation of the strategic plan.

Once the areas of greatest opportunity for improvement have been identified, the focus shifts to generating a few, high-impact tactics that close the gap. While the TSIA benchmarking process evaluates Pacesetter performance to identify best practices from within the membership, many companies wrongly assume that they can only learn from companies “like them.” The reality is, there is no perfect match to your company, and your goal should be to rise above your competition, not to simply be like them. (Tweet this!) So what can you learn from an adjacent industry?

What Photocopiers and Dog Food Have in Common

Once, when I was leading a manufacturing operation for Xerox, I took my entire leadership team on a benchmarking trip to Ralston Purina. At the time, a lot of people questioned whether dog food had anything to do with components for copiers, but what we learned helped us dramatically improve our whole approach to inventory management.

The idea came while walking through our local grocery store. I was amazed to see from the "produced on" date that Purina could produce Dog Chow, ship it, and have it on a shelf in less than five days. My factory was also producing a consumable for copiers, yet we had over 50 days of finished goods in our supply chain. I just had to see how they did it and try it in our operation. We brought back many ideas that ultimately helped us become more responsive to changes in customer demand, and those improvements helped us decrease our finished goods inventory by nearly 40%!

I readily admit that dog food is not “adjacent” to the office equipment industry, but the point is that there is a lot you can learn from industries other than your own.

Customer Expectations

When someone buys an item from Amazon, they can have it delivered the same day for a low per-order flat fee. When the level of expectation is set that a book can be ordered online, packed, shipped, and arrive on the doorstep in less than the time it takes for your company to even process an order, those expectations will begin to creep into your business. With this in mind, your customers will wonder why they only have to wait a few hours for their Amazon package to arrive but up to two days to receive a part from you.

TSIA’s recent book, B4B, focuses on outcome-based offers in a B2B world, but there is a lot we can learn from B2C, such as how websites like Amazon consistently provide their customers with what they want when they want it. B2C has a dramatic influence on B2B, once again illustrating the benefit of looking beyond your peer group and examining the operational habits of the best performing companies, regardless of industry.

The literature on benchmarking is full of success stories, but to get the most out of your efforts, you have to stop looking for the perfect match to your industry. The goal is to find ideas and practices that you can use right away to improve your performance, and it doesn't matter where you find them.

Learning from Other Industries

Xerox learned about operational efficiency from Purina, Henry Ford looked at slaughterhouses before he designed the assembly line, and when I was at Bank of America, we emulated Disney’s model of creating an excellent customer experience. So what can an office equipment company learn from an industrial equipment and technology company, and what insights can a healthcare organization glean from an enterprise hardware company?

At the upcoming TSW Service Transformations conference, I will be co-presenting a session on October 21 at 2:00 p.m. with TSIA member and partner companies, NCR, Kodak, RTM Consulting, and Carestream Health about how effectively using TSIA Benchmark Reviews helped them lay a strong foundation for their services transformation to a B4B company. The success stories range from implementing proactive support to developing a variable workforce model and reducing the cost of spare parts and logistics.

Using Benchmark Reviews to identify the vital few opportunities, and then systemically addressing them, should be one of the first steps on your journey to professional and personal success. Come hear from some of the best, and you’ll learn how to accomplish all of the above for your organization, your company, your customers, your employees, and yourself.

About the Author

vele-galovski

Vele Galovski is vice president of research, Field Services, for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement. He may be contacted at vele.galovski@tsia.com

Read more from Vele on these topics:
Field Services | Intro to IoT | Spare Parts Logistics | Benchmarking

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Topics: metrics, benchmarking, field services

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