Tool: Benchmarking

D Benchmarking Tool: Benchmarking Purpose: provide realistic goals and direction; monitor performance; improve processes to match the best in Higher Education. Benchmarking is the technique of comparing practices and processes to the best in the industry. Remember: Some processes should be compared to norms outside of Higher Education!

D Benchmarking Benchmarking Establishing benchmarks • Call similar departments at other universities or businesses. • Consult other departments within Clemson University. • Contact individuals who have experience with or ties to other organizations. Benchmarking

D ProjectCharter Defining metrics What is a metric? • A measured variable that can be tracked and used to detect errors, inefficiency, or improvement. It can be a process metric or and organizational metric. Process metrics apply to specific processes or programs like time, cost, or quality. Organizational metrics address organization-wide issues like employee satisfaction and turnover. Understanding Metrics • Choose one or more to describe accurately your process’ efficiency.

D ProjectCharter Kinds of metrics Kinds of Metrics • Time Metrics • Value-added time • Non-value-added time • Processing time • Cycle time • Cost Metrics • Cost savings • Opportunity cost • Decreased waste • Quality Metrics • Customer satisfaction • Percent complete and accurate • Output Metrics • Backlog • Work in process Understanding Metrics

D ProjectCharter Baseline You must have a baseline to measure improvement. Understanding Metrics • The Lean Office will help establish your baseline metrics.

M Objective Data Improvement categories Quality: Satisfaction Accuracy To improve your process, you need to define what category you want to improve: quality, cost, time, or output. Cost: Savings Waste avoidance Time: Cycle time Waiting Output: Backlog Work in process

M Objective Data Vital few For every problem, there are usually many causes. Identify the main contributors. Lean calls these the “vital few.” They are more important than the “trivial many.” Rule of Thumb: 80% of a problem is the result of 20% of the causes

M Objective Data Ways to Quantify Count: Measure: How many days early were vendors paid? How many days late were vendors paid? How long did it take for a bill to move through the process? • How many vendors were paid on time? • How many vendors were paid late? Better Good Best

M Objective Data Tool Options Choices: Check sheets gather data on various effects and how often they occur. This helps you separate the significant from the trivial. • Check sheet • Histogram • Run chart

M Objective Data Tool Options Choices: Example: • Check sheet • Histogram • Run chart

M Objective Data Tool Options Choices: Histograms are bar charts that show the frequency of an event. They are easily created from check sheets. They help formulate hypotheses regarding root causes of problems. • Check sheet • Histogram • Run chart

M Objective Data Tool Options Choices: Run Charts are line graphs that show variation in the process over time. They help identify when problems are happening and allow us to focus on the particular circumstances in which the problem occurs. • Check sheet • Histogram • Run chart

M Benchmarking Do you have the right benchmarks? • Now that you understand your process thoroughly, identify which elements and indicators are key to process success? These are your Key Performance Indicators. • Gather new information as necessary to compare your indicators with best practices. • Which of these is the biggest problem for your process? Benchmarking -- Revisited

M Benchmarking Progress Check By now you have: • measured your current status; • identified industry norm; • identified performance gaps, and • gathered the information necessary to establish meaningful goals and targets in the next phase. Benchmarking -- Revisited

M Target Goals Lean Rule of Thumb 60/40 Rule • Do not try to do it all at once! • Make your goal realistic and achievable. • When in doubt, aim for about 60% of the ideal. • Remember that Lean is an iterative process. Target Goals

M Target Goals Direction iterations Target Goals

Tool: Benchmarking