Benchmarking: Don't Just Run the Numbers, Understand the Process

Benchmarking can be a useful tool to improve manufacturing practices.
Mar 31, 2013


Simon Chalk
Benchmarking, a useful tool to determine areas in which a business can improve, involves the measuring of a company's own products, services, or processes against those of recognized best practitioners. The idea was first developed by the Japanese and pioneered in the West by Rank Xerox in the 1980s.

The information provided by benchmarking was crucial in helping Rank Xerox formulate its response to the increasing domination of the world photocopier market by the Japanese. It showed company executives a gap and indicated what was required.

Early benchmarking studies compared company results with those of competitors. Usually, the numbers being compared are either associated with financial performance or operational efficiency. While these numbers can be relatively easy to obtain, what they can tell you in practice can be quite disappointing.

Metrics can show the size of the gap but they tend to leave two questions unanswered: what does this actually mean? And, if it is true how do they do it? In these circumstances unless you are really determined to follow the exercise through, it usually falters here with the conclusion "so what." Consulting firms are especially adept at communicating sets of numbers showing how far behind the pack a company is without giving any clues to how the gap may be closed.

Those who have persevered with benchmarking recognize that its real potential lies in comparing processes. By analyzing the processes that deliver the results, one can both understand how these results are achieved and gain a valuable insight into how one can achieve them. The point being not simply to copy what other companies do but to use what they do as a mirror in which to view one's own processes. As business processes tend to be fairly universal, it is possible to make comparisons with the best practitioners across a wide range of industries.

For the pharmaceutical industry, with its added dimension of regulatory oversight, benchmarking provides a guide and assurance that interpretation of regulatory requirements is consistent with other companies in the industry. Attempting to make comparisons before fully understanding one's own processes is rather like putting the cart before the horse. Consequently, before embarking on any process benchmarking exercise, it is essential to have documented and analyzed one's own internal processes.

ASSESSING LONG-TERM GOALS

To think of process benchmarking only as a tool for identifying opportunities to improve processes would be to recognize only the tactical benefits of the approach. The real power of benchmarking lies in its ability to provide strategic focus, as demonstrated by Rank Xerox. Applied in this way, benchmarking can be used to revitalize and refocus long-term business improvement programs.

Used intelligently, it can also be used to track shifts in industry direction. Anyone benchmarking the use of disposable technologies in bioprocessing over the past few years will be detecting a switch away from stainless steel in the industry at a point where they would still have the choice to be a leader in the field. Leaving it much longer may result in follower status as the only option. Benchmarking trends in API production are already picking up on the transformative possibilities that flow chemistry offers as a replacement technology to batch production.