Vision
To be the leading bus company in Kuala Lumpur, known for superior customer services and innovation
Objectives
Achieve a market share of 40% within 5 years
Achieve a return on investment on 10% within 5 years
The strategy map would be like this...you may add if you have other creative ideas...
Discuss...
What about continuous improvements?
Benchmark? Put it in the benchmarking process...
Step 1: Identifying the functions or activities to be benchmarked, and performance measures
Step 2: Selecting benchmark partners
Step 3: Data collection and analysis
Step 4: Establishing performance goals
Step 5: Implementing plans
Benchmarking is a way of discovering what is the best performance being achieved – whether in a particular company, by a competitor or by an entirely different industry. This information can then be used to identify gaps in an organization’s processes in order to achieve a competitive advantage. Thus it is important for Six Sigma practitioners to:
Understand fully the purpose and use of benchmarking.
Understand the difference between benchmarking and competitor research.
Gain insight to ensure that benchmarking is in alignment with the company’s management objectives.
Benchmarking as a Tool
Benchmarking is a process for obtaining a measure – a benchmark. Simply stated, benchmarks are the “what,” and benchmarking is the “how.” But benchmarking is not a quick or simple process tool. Before undertaking a benchmarking opportunity, it is important to have a thorough understanding of the company’s guidelines. Some companies have strict guidelines as to what information can be gathered, and whom practitioners can contact to get that information. Depending on the size of the company, practitioners may be surprised at what is readily available in-house.
Benchmarking is not just a matter of making inquiries to other companies or touring and documenting another company’s facilities or processes. When making use of benchmarking, a company should not limit the scope to its own industry, nor should benchmarking be a one-time event.
Benchmarking Versus Competitor Research
While competitor research is neither a better nor a worse practice than benchmarking, the important thing is to understand that there is a difference between the two. Available time and resources will help decide which tool will add the most value. The following table represents experience in dealing with the two practices:
Differences Between Benchmarking and Competitor Research
Benchmarking
Competitor Research
Focuses on best practices
Focuses on performance measures
Strives for continuous improvement
Bandage or quick fix
Partnering to share information
Considered corporate spying by some
Needed to maintain a competitive edge
Simply a “nice to have”
Adapting based on customer needs after examination of the best
Attempting to mirror another company/process
Three Primary Classifications of Benchmarking
Although there are many forms of benchmarking, they can be classified into three categories – internal, competitive and strategic.
About Strategic Benchmarking
Going outside one’s own industry is often challenging for a company. Keep in mind, however, that customer satisfaction is driven by critical-to-quality measures that are similar regardless of the industry.
For example, when considering the metric, “wait time,” it does not matter whether waiting for a car repair at a body shop, or to make a deposit in a bank lobby, customers do not want to wait in long lines. Similarly, whether using a telephone help line of a cable company or of a favorite department store, customers do not want to remain on hold. They want their concerns addressed quickly and efficiently.
In 2004, a leading company identified customer satisfaction to have a benchmark of 92 percent. A key dissatisfier was wait time. The gap between an organization’s current customer satisfaction score and the benchmark of 92 percent represents the ultimate goal to strive for in a multigenerational plan
Bottom line: A lot can be learned from going outside one’s own industry because many customer concerns are the same.
Internal benchmarking is used when a company already has established and proven best practices and they simply need to share them. Again, depending on the size of the company, it may be large enough to represent a broad range of performance (i.e., cycle time for opening new accounts in branches coast to coast). Internal benchmarking also may be necessary if comparable industries are not readily available.
Competitive benchmarking is used when a company wants to evaluate its position within its industry. In addition, competitive benchmarking is used when a company needs to identify industry leadership performance targets.
Strategic benchmarking is used when identifying and analyzing world-class performance. This form of benchmarking is used most when a company needs to go outside of its own industry. Six Sigma often uses Hoshin to ensure that all employees are knowledgeable about the strategic direction for the company. Within a company’s Hoshin plan, goals are established relative to benchmarks set by world-class organizations. Often, these benchmarks are obtained from outside industries.
1. Understand the company’s current process performance gaps.This will help decide what needs benchmarking.
2. Obtain support and approval from the executive leadership team. That approval and support will assist with eliminating roadblocks, providing adequate resources and expediting the benchmark-gathering process.
3. Document benchmarking objectives and scope. This is a necessity for any project.
4. Document the current process. Without up-to-date knowledge of the current process:
a. Time and resources can be wasted collecting process documentation and data that already exists.
b. The project may lack focus, purpose and/or depth.
c. Benchmarking visits may appear to be random exercises in information-gathering.
d. The team could select a partner whose performance is actually worse than that of its own organization.
e. Collected benchmarking data will be difficult to compare “apples to apples” in terms of process requirements.
5. Agree on the primary metrics. Benchmarking measurements are used as the basis of many comparisons:
a. To determine the gap between current performance and that of partner organizations.
b. To track progress from the present (with the current process) into the future.
c. To track partners’ progress toward their goals.
d. To determine superior performance with process improvements.
e. To use a measurement systems analysis (MSA):
i. These comparisons will be valid only if everyone participating in the study measures performance in exactly the same way – every time.
ii. It is important to make sure metrics are being established that potential benchmarking partners are probably already tracking or that can be easily derived from existing measurements.
6. The metrics should be put in writing. In particular:
a. What is being measured
b. How the units of measure will be classified.
c. What should be included in the measurement.
d. What should not be included.
e. How to make any necessary calculations.
f. Examples of typical measurements.
7. Agree on what to benchmark. Everyone must be in agreement on what to benchmark prior to any benchmark gathering initiative in order to:
a. Understand gaps of low performers.
b. Understand impact to customers, associates and shareholders.
c. Prioritize and select one to three metrics to benchmark.
8. Develop a data collection plan.
9. Identify research sources and initiate data gathering.
10. Design a screening survey to assist with partner selection. Characteristics of the survey are important:
a. Crisp focus on indicators of excellence
b. Two pages maximum
c. 30 minutes maximum to complete
d. Objective, multiple-choice questions
e. Communicates the plans, objectives and resource requirements for the study
f. Reflects focus areas for subsequent in-depth questionnaires
11. Determine how to contact and screen companies.
12. Design a detailed survey to gather information.
13. Decide if gathered information meets original objectives.
14. Conduct a site visit.
15. Apply the learnings to performance gaps.
16. Communicate to the executive leadership to ensure continued support.
17. Develop a recommended implementation plan with process owner.
18. Know when to update and recalibrate.
External Resources for Benchmarking
Some may find it surprising that there is a world of benchmarking information already gathered and available. While there may be a fee associated with obtaining this information, the fee can easily be offset by the savings in time and resources that come from not having to gather the benchmarking information needed to meet agreed-upon objectives. Here are some available sources:
A comparison of one specific process within your own organisation or across different departments and business units.
Example : Studying and comparing the billing process among various branches / subsidiaries of the company.
2. Competitive Benchmarking
A comparison of a specific process with that of a direct competitor.
Example : Nokia studying customer problem resolve at Samsung.
3. Functional Benchmarking
Focuses on comparison of a specific process externally with a similar one within a broad range of your industry and business line.
Example : Xerox studying warehouse order picking operations at L.L. Bean (is an American privately held mail-order , online, and retail company) to help them improve their parts distribution process.
4. Generic Benchmarking
A comparison of specific processes from unrelated industries or business lines towards identifying innovation.
Example : Municipal Local Authority studying waste management at Henkel International Lubricant.
Few slides and articles I got from other sources....
Align the day-to-day work that everyone is doing with strategy
Prioritize projects, products, and services
Measure and monitor progress towards strategic targets
The system connects the dots between big picture strategy elements such as mission (our purpose), vision (what we aspire for), core values (what we believe in), strategic focus areas (themes, results and/or goals) and the more operational elements such as objectives (continuous improvement activities), measures (or key performance indicators, or KPIs, which track strategic performance), targets (our desired level of performance), and initiatives (projects that help you reach your targets).
Who Uses the Balanced Scorecard (BSC)?
BSCs are used extensively in business and industry, government, and nonprofit organizations worldwide. Gartner Group suggests that over 50% of large US firms have adopted the BSC. More than half of major companies in the US, Europe, and Asia are using the BSC, with use growing in those areas as well as in the Middle East and Africa. A recent global study by Bain & Co listed balanced scorecard fifth on its top ten most widely used management tools around the world, a list that includes closely-related strategic planning at number one. BSC has also been selected by the editors of Harvard Business Review as one of the most influential business ideas of the past 75 years.
BSC Terminology: Perspectives
The BSC suggests that we view the organization from four perspectives, and to develop objectives, measures (KPIs), targets, and initiatives (actions) relative to each of these points of view:
Financial: often renamed Stewardship or other more appropriate name in the public sector, this perspective views organizational financial performance and the use of financial resources
Customer/Stakeholder: this perspective views organizational performance from the point of view the customer or other key stakeholders that the organization is designed to serve
Internal Process: views organizational performance through the lenses of the quality and efficiency related to our product or services or other key business processes
Organizational Capacity (originally called Learning and Growth): views organizational performance through the lenses of human capital, infrastructure, technology, culture and other capacities that are key to breakthrough performance
BSC Terminology: Strategic Objectives
Strategic Objectives are the continuous improvement activities that we must do to implement strategy. The break down the more abstract concepts like mission and vision into actionable steps. Actions that your organization take should be helping you achieve your strategic objectives. Examples might include: Increase Revenue, Improve the Customer or Stakeholder Experience, or Improve the Cost-Effectiveness of Our Programs.
BSC Terminology: Strategy Mapping
One of the most powerful elements in the BSC methodology is the use of strategy mapping to visualize and communicate how value is created by the organization. A strategy map is a simple graphic that shows a logical, cause-and-effect connection between strategic objectives (shown as ovals on the map). Generally speaking, improving performance in the objectives found in the Organizational Capacity perspective (the bottom row) enables the organization to improve its Internal Process perspective (the next row up), which, in turn, enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).
For each objective on the strategy map, at least one measure or Key Performance Indicator (KPI) will be identified and tracked over time. KPI’s indicate progress toward a desirable outcome. Strategic KPIs monitor the implementation and effectiveness of an organization's strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency.
Good KPIs:
Provide an objective way to see if strategy is working
Offer a comparison that gauges the degree of performance change over time
Focus employees' attention on what matters most to success
Allow measurement of accomplishments, not just of the work that is performed
Provide a common language for communication
Help reduce intangible uncertainty
BSC Terminology: Cascading
Cascading a balanced scorecard means to translate the corporate-wide scorecard (referred to as Tier 1) down to first business units, support units or departments (Tier 2) and then teams or individuals (Tier 3). The end result should be focus across all levels of the organization that is consistent. The organization alignment should be clearly visible through strategy, using the strategy map, performance measures and targets, and initiatives. Scorecards should be used to improve accountability through objective and performance measure ownership, and desired employee behaviors should be incentivized with recognition and rewards.
Cascading strategy focuses the entire organization on strategy and creating line-of-sight between the work people do and high level desired results. As the management system is cascaded down through the organization, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. An emphasis on results and the strategies needed to produce results is communicated throughout the organization. This alignment step is critical to becoming a strategy-focused organization.
BSC History
The Balanced Scorecard (BSC) was originally developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton as a framework for measuring organizational performance using a more BALANCED set of performance measures. Traditionally companies used only short-term financial performance as measure of success. The “balanced scorecard” added additional non-financial strategic measures to the mix in order to better focus on long-term success. The system has evolved over the years and is now considered a fully integrated strategic management system.
Adapted from Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996): 76.
While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created theTableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton and built on work by Art Schneiderman at Analog Devices. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
BSC Automation and Performance Analysis
Once a scorecard has been developed and implemented, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. The Balanced Scorecard Institute formally recommends the QuickScore Performance Information SystemTM developed by Spider Strategies and co-marketed by the Institute.
BSC Development
The Institute’s award-winning framework, Nine Steps to SuccessTM, is a disciplined, practical approach to developing a strategic planning and management system based on the balanced scorecard. Training is an integral part of the framework, as is coaching, change management, and problem solving. Emphasis is placed on “teaching clients to fish, not handing them a fish”, so the scorecard system can be sustained.
A key benefit of using a disciplined framework is that it gives organizations a way to ‘connect the dots’ between the various components of strategic planning and management, meaning that there will be a visible connection between the projects and programs that people are working on, the measurements being used to track success, the strategic objectives the organization is trying to accomplish and the mission, vision and strategy of the organization.
As a lean manufacturing tool Kaizen improves
quality, productivity, safety, and workplace culture. This occurs by applying
small daily changes that yield major improvements over time. Kaizen first
surfaced during the effort to rebuild Japan after World War II. Several U.S.
business consultants collaborated with Japanese companies to improve
manufacturing. The result was the development of several new management
techniques, including Kaizen.
Kaizen comes from two Japanese words: Kai
(improvement) and Zen (good). Over time, it became known as “continuous
improvement.” Unlike many business practices Kaizen’s strength comes from
requiring all workers—from the CEO to the shop floor assistant—to contribute
suggestions to improve the business.
How
Does Lean Kaizen Work?
Kaizen works by reducing waste (muda) and
eliminating work processes that are overly difficult (muri). As a lean business
practice, Kaizen succeeds when all employees
look for areas to improve and provide suggestions based on their observations
and experience.
From the beginning, it must be clear that all
suggestions are welcome and that there will be no negative consequences for
participating. Instead, employees are rewarded for changes that improve the
workplace. Workers become more confident and invested in improving the company.
They become leaders that continually look for areas that can be improved.
Once a scorecard has been developed and implemented, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. The Balanced Scorecard Institute formally recommends the 
