BENCHMARKING:

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BENCHMARKING

• A CONTINUOUS PROCESS OF MEASURING OWN VITAL
  FACTORS AGAINST LEADERS OR COMPETITORS
• Benchmarking the process of comparing
• Benchmarking tools simple or complex ratios
  (indicators)
• Indicators made up of data parameters such as
  revenue, costs, added value, etc.
• Issues Identify indicators, data availability,
  comparison at enterprise level vs. between
  enterprises.

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BENCHMARKING

• Comparing similar factors in different
  enterprises, e.g. gt

• Performance of wood furniture mfg in two
  different enterprises
• 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

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Benchmarking - for Systematic Comparison of the
Development

• ENTERPRISE to assess own status and development
  vs. own goals
• SECTOR / MARKET comparison with important
  countries or regions.
• BASIS quantitative indicators
• DYNAMISM relative position and development
  trends
• COMPRIHENSIVENESS several areas and different
  indicators

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INFORMATION NEEDS vs PROBLEMS FACED

• Databases on sub-regional levels with enterprise
  data
• Data suppliers at the enterprise level in
  different industrial sectors
• Data customers / users
• Internet as media for providing obtaining
  benchmark data
• Administrative routines and incentives for the
  capturing of enterprise data and information
  exchange

• Who collects data and how?
• Standards vary
• Who are providers?
• Will I provide data to my competitors?
• Who will use it and how?
• What are the metrics? Validity of data?
• Who are customers?
• Prices, completeness, authorization, access,
  etc.
• Few polices and solutions are available besides
  administrative taxation and annual reporting.
• One way communication

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Ethical Guidelines and . barriers!

•  
• avoid talking about areas which involve pricing
  or competitively sensitive costs
• don't ask competitors for sensitive data
• don't share proprietary information without
  clearance
• use third parties to assemble and present data
• don't disparage competitors' business based on
  data obtained from benchmarking

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BENCHMARKING - CONCLUSION

• Important tool for entrepreneurs
• 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
• undertaking benchmarking requires an
  organizational willpower
• companies unable to muster the willpower to
  compare themselves with the world's best cannot
  implement any improvement approach
• benchmarking either demonstrates the requisite
  willpower or demonstrates its absence

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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.

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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.

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Objectives continued

• Minimizing subjective judgments by management and
  intermediaries
• Complementing questionnaires, minimizing
  sensitivity of proprietary information
• Simplifying speeding up processing of results
  with minimum human errors, incompetence and
  delays
• Obtaining results easy, simple and quickly at any
  moment of time.
• Assuring of entrepreneur confidence by viewing
  only relative change figures in percent to
  reference point in the past in business reports
  protecting sensitive KPIs
• Facilitating public discussions of performance
  management issues and knowledge distribution.

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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)

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Formats

• Radar Chart
• Time series
• Period
• Averaged
• Brief Summary Report
• Detailed Summary Report

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Reference BenchmarkingAdded Value per Employee
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Reference BenchmarkingNet Profit
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Reference BenchmarkingExpenses
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KPI Change Absolute Relative
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Pharos BenchmarkingDefinition of parameters
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Reference BenchmarkingSummary
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Conclusions

• Pharos Benchmarking provides simple and effective
  tools for easy measuring and monitoring business
  results
• The source data is real enterprise database not
  questionnaires and third party interviews
• It presents absolute and relative values of
  change
• Available for an entrepreneur in continuous
  improvement process by mouse click at any time
• Relative improvement reports can be promptly
  presented to prospective investors, banks or
  important customers
• Report becomes excellent validation to business
  proposal
• Benchmarking helps evaluating business
  development scenarios, decision consequences,
  innovations, strategies
• Excellent educational and business gaming tool
• Usable for comparing multiple enterprises (XML
  reports)
• Can be further extended up to any number of
  benchmarking indexes