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BENCHMARKING:

BENCHMARKING:. “A CONTINUOUS PROCESS OF MEASURING OWN VITAL FACTORS AGAINST OWN PAST OR LEADERS OR COMPETITORS” Benchmarking is the process of comparing Benchmarking tools are simple or complex ratios (‘indicators’)

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BENCHMARKING:

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  1. BENCHMARKING: “A CONTINUOUS PROCESS OF MEASURING OWN VITAL FACTORS AGAINST OWN PAST OR LEADERS OR COMPETITORS” • Benchmarking is the process of comparing • Benchmarking tools are simple or complex ratios (‘indicators’) • Indicators are made up of business results such as revenue, costs, added value, etc. Issues: Identifying indicators, availability of data, comparisons at enterprise level vs. own past results or between enterprises. EPIC, GOLEM IMS GMBH, Austria

  2. Comparing similar factors in the same or different enterprises e.g.: ==> Performance of wood furniture manufacturing in two different enterprises e.g. how materials are purchased how suppliers are paid how inventories are managed how employees are trained how payrolls are processed how fast new products get to the market how quality is managed KPI change in given industrial sector over time Comparing performance of key industrial sectors in a region or country Comparing performance of regions or countries BENCHMARKING EXAMPLES EPIC, GOLEM IMS GMBH, Austria

  3. BENCHMARKING - CONCLUSION • Important tool for entrepreneurs, consultants and policy makers • Difficulties in obtaining data • Sensitivity of entrepreneurs to releasing data • Data validity verification • Incentives for entrepreneurs taking part • Cultural differences • It is a critical technique for making organizational transformation easy • It requires a certain threshold of organizational willpower • companies unable to muster the willpower to compare themselves with its past and with the world's best cannot implement any quality approach • benchmarking demonstrates the requisite willpower or its absence EPIC, GOLEM IMS GMBH, Austria

  4. SUMMARY: • Benchmarking is a Process! • Benchmarking is not a goal in itself but helps identifying areas requiring further analysis and improvements. • Extensive and systematic comparison using more than one variable. • Trend implementing a benchmarking approach. EPIC, GOLEM IMS GMBH, Austria

  5. Pharos Benchmarking Objectives • Obtaining information about absolute and relative change of major business indicators for the current date compared to some reference date in the past. • Presenting this information in easy way for analysis such as radar graph and time series graphs. • Providing trend identification and analysis tools by using simple variable averaging method. • Allowing flexibility in defining any desirable averaging period within interval of 1-12 months. • Using actual data available in Pharos and Produce Plus enterprise databases for obtaining objective results. EPIC, GOLEM IMS GMBH, Austria

  6. Objectives • Minimizing possibilities for subjective judgments by individuals due to diversity of qualifications methods and errors. • Avoiding questionnaires, sensitive proprietary information,its processing, human errors, incompetence as well as delays in getting results. • Obtaining benchmarking results easy, simple and quickly at any moment of time. • Supporting presenting only relative change figures in percent in business reports avoiding revealing sensitive key performance indicators • Facilitating public discussions of performance management issues and knowledge distribution. EPIC, GOLEM IMS GMBH, Austria

  7. 7 Indicators • Net Profit (Pre Tax) • Expenses Overall • Sales Revenue • Overall Added Value • Overall Added Value per Employee • Labor Ratio (Produce Plus) • OEE (Overall Equipment Efficiency, ProdPlus) EPIC, GOLEM IMS GMBH, Austria

  8. Formats • Radar Chart • Time series • Period • Averaged • Brief Summary Report • Detailed Summary Report EPIC, GOLEM IMS GMBH, Austria

  9. Reference Benchmarking:Added Value per Employee EPIC, GOLEM IMS GMBH, Austria

  10. Reference Benchmarking:Net Profit EPIC, GOLEM IMS GMBH, Austria

  11. Reference Benchmarking:Expenses EPIC, GOLEM IMS GMBH, Austria

  12. KPI Change: Absolute & Relative EPIC, GOLEM IMS GMBH, Austria

  13. Pharos Benchmarking:Definition of parameters EPIC, GOLEM IMS GMBH, Austria

  14. Reference Benchmarking:Summary EPIC, GOLEM IMS GMBH, Austria

  15. EPIC, GOLEM IMS GMBH, Austria

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  17. Conclusions • Pharos Benchmarking is simple and effective tool • The source data is real enterprise database not questionnaires or third party interviews • It presents both absolute and relative values of change • Available for entrepreneur in continuous improvement process by mouse click at any time • Relative improvement reports can be easily presented to prospective investors, banks or important customers • The report is be additional validation to business proposal • Benchmarking helps evaluating business development scenarios, decision consequences, innovations, strategies • Excellent educational and business gaming tool • The benchmarking reports can be used for support of policy making for clusters, regions, countries • Can be used for multiple enterprises (XML reports) • Can be further extended with benchmarking indexes EPIC, GOLEM IMS GMBH, Austria

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