By Issa Bass
 

When Ichiro Suzuki was assigned the task to design a new line of Luxury cars by Toyota, one of the first steps he undertook was to organize a gathering of a few selected luxury car owners in Long Island NY to conduct a survey, to determine the reasons behind their choices.  The group was composed of BMW, Audi, Mercedes Benz, Jaguar and Volvo owners.

The pros and cons for the different cars ranged from the space inside the vehicles to the safety and reliability, to the styles and performance. Suzuki tabulated the results of his survey on a matrix to determine what the best features luxury cars owners are looking for on a vehicle are; he then compared the Luxury cars manufactured in the US to the ones from Japan and Europe. The best ones were the Europeans and he decided that they were the ones to beat.

The results of his survey were used as a basis for the design of the Lexus LS400.

To be better than the best, Ichiro Suzuki decided that the most important features (gas mileage, speed, noise and vibration, aerodynamics and weight) of the LS400 should be more competitive than the BMW 735i and the Mercedes 420 SE/ 560 SE.

When the LS400 was released, it was an overwhelming success. This was because not only did the engineers at Toyota listen to their potential customers, they also benchmarked their products.

Benchmarking is a measurement technique that consists in comparing one's process or product to the best products or processes offered by the competitors. It is an invaluable tool because not only does it helps identify the best practices and processes in an industry but it is also a source of motivation for employees. Benchmarking takes place at the Measure or Analyze phase of the Six Sigma DMAIC roadmap.

Benchmarking procedures depend on the industry and the products or services they are intended for but some of their traits are common to all.

Benchmarking Procedures

Benchmarking can be used for internal purposes when comparing different processes within the same company, it can also be used to compare a product or process to the standards but it is more often used to compare a company's practices to the best of an industry.

In that case, the purpose of benchmarking is to answer to among other questions, the following:

How are we doing compared to our competitors?

What are our competitors doing better than us?

How are they doing it?

What can we do to produce more efficiently than them?

Benchmarking follows a methodic process which consists in different phases, the first of which is the definition of the product or process being benchmarked. The definition of the process being benchmarked includes the analysis and understanding one's process. It might be necessary to map the internal process and analyze it, determine its capabilities and generate accurate performance metrics to better understand it before comparing it to the competitors'.

The second step will consist in the identification of the best in the industry (What would be the purpose of comparing oneself to the worst?).

Study their processes by collecting as much information as possible before comparing their capabilities and metrics to the internal processes.

The third step will consist in comparing the metrics, identifying the best practices and determining how the competitors manage to achieve better results if they do.

Based on the results of the benchmarking process and the lessons learned, one can be better situated in his industry and better prepared for changes.

Since the purpose of benchmarking is to achieve better results, the information obtained should be used as a basis for process improvement. This can be done in several ways:

• Set new targets for your process
• Put out a strategy to enhance performance
• Use the metrics obtained to motivate your employees

About the author
Issa Bass is the managing editor of SixSigmaFirst. He can be reached at issa@sixsigmafirst.com

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