BENCHMARKING

Benchmarking can be internal (comparing performance between different groups or teams within an organization) or external (comparing performance with companies in a specific industry or across industries). Within these broader categories, there are three specific types of benchmarking:

1) Process benchmarking,

2) Performance benchmarking and

3) strategic benchmarking

These can be further detailed as follows:

·         Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration.

·         Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.

·         Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.

·         Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.

·         Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.

·         Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.

·         Functional benchmarking - a company will focus its benchmarking on a single function to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.

·         Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.

·         Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed.

·         Energy benchmarking - process of collecting, analysing and relating energy performance data of comparable activities with the purpose of evaluating and comparing performance between or within entities. Entities can include processes, buildings or companies. Benchmarking may be internal between entities within a single organization, or - subject to confidentiality restrictions - external between competing entities.

Reference

http://en.wikipedia.org/wiki/Benchmarking

SWOT and STEEPV analyses

SWOT (Strengths, Weaknesses, Opportunities and Threats) and STEEPV (Social, Technological, Economic, Environmental/Ecological, Political and Value-based issues) are analyses, which help to identify and classify factors that have, or may have, an impact on the evolution of an organisation, an enterprise or a region.

Both analyses involve collection and portrayal of information on internal and external factors. SWOT generally provides a list of an organisation's strengths and weaknesses as indicated by an analysis of its resources and capabilities. This information is supplemented with a list of threats and opportunities that an analysis of its environment identifies. STEEPV in turn enables to categorise all factors into the above mentioned thematic groups.

Both analyses provide an overview of the most important issues that have to be taken into account while elaborating strategic plans for an organisation or conducting a Foresight exercise. Whereas SWOT analyses more deal with short-term issues, STEEPV analyses are future-oriented, and consider possible future factors of change and developments in a broader thematic context.

OPERATIONS AND STRATEGY (5 Dimensions Of Competitiveness )

OPERATIONS AND STRATEGY (5 Dimensions Of Competitiveness )

Strategy in a business organization is essentially about how the organization seeks to

survive and prosper within its environment over the long-term. The decisions and

actions taken within its operations have a direct impact on the basis on which an

organization is able to do this. The way in which an organization secures, deploys

and utilizes its resources will determine the extent to which it can successfully pursue

specific performance objectives.

1.     Cost: The ability to produce at low cost.

2.     Quality: The ability to produce in accordance with specification and without

error.

3.     Speed: The ability to do things quickly in response to customer demands and

thereby offer short lead times between when a customer orders a product or

service and when they receive it.

4.     Dependability: The ability to deliver products and services in accordance with

promises made to customers (e.g. in a quotation or other published information).

5.     Flexibility: The ability to change operations. Flexibility can comprise up to

four aspects:

i. The ability to change the volume of production.

ii. The ability to change the time taken to produce.

iii. The ability to change the mix of different products or services produced.

iv. The ability to innovate and introduce new products and services.

Excelling at one or more of these operations performance objectives can enable an

organization to pursue a business strategy based on a corresponding competitive factor.

it is important to note that the success of any particular business strategy depends not only on the ability of operations to achieve excellence in the appropriate performance objectives, but crucially on customers valuing the chosen competitive factors on which the business strategy is based. Matching operations excellence to customer requirements lies at the heart of any operations based strategy. How this might be done is discussed later in the chapter. It is unlikely that any single organization can excel simultaneously at all of the five operations performance objectives. Trying to do so is likely to lead to confusion if operations mangers pursue different objectives at different times. This lack of clarity is likely to lead to suboptimal performance and result in a failure to excel in any of the operations performance objectives. Consequently, organizations need to choose which performance objectives they will give priority to. This may result in having to 'trade-off' less than excellent performance in one aspect of operations in order to

achieve excellence in another.

EXCELLENT OPERATIONS GIVES THE ABILITY TO

EXCELLENT OPERATIONS PERFORMANCE IN . . .	GIVES THE ABILITY TO COMPETE ON . . .
Cost	Low price
Quality	High quality
Speed	Fast delivery
Dependability	Reliable delivery
Flexibility	Frequent new products/services Wide range of products/services Changing the volume of product/service deliveries Changing the timing of product/service deliveries

TRADE-OFF

The concept based on the premise that it is impossible to excel simultaneously at all aspects of operations. This means that an operations strategy can be successful only if it is based upon a single clear goal, determined by a prioritization of operations performance objectives (e.g. cost, quality,

speed, dependability and flexibility).

The conventional trade-off model states that unless there is some slack in the system, improving any one of the four basic manufacturing capabilities - Quality, Dependability, Speed and Cost - must necessarily be at the expense of one or more of the other three. In the short term this seems to be the case. The picture often used is of a balance or a see-saw (above).

Professor Nigel Slack (of Warwick Business School) has pointed out that there is an alternative to disturbing the balance and that is to raise the fulcrum or balance point, thus (in the example above) simultaneously reducing cost and increasing speed. In this example the fulcrum would be either Quality or Dependability. This ties in well with Ferdows and De Meyer's "Sand Cone" model described below.

SAND CORN MODLE

The Sand Cone model suggests that although in the short term it is possible to trade off capabilities one against the other, there is actually a hierarchy amongst the four capabilities.

To build cumulative and lasting manufacturing capability, management attention and resources should go first towards enhancing quality, then - while the efforts to enhance quality are further expanded - attention should be paid to improve also the dependability of the production system, then - and again while efforts on the previous two are further enhanced - production flexibility (or reaction speed) should also be improved, and finally, while all these efforts are further enlarged, direct attention can be paid to cost efficiency.

Most of the traditional management approaches for improving manufacturing performance are built on the trade-off theory. Ferdows and de Meyer suggest the trade-off theory does not apply in all cases. Rather, certain approaches change the trade-off relationship into a cumulative one - i.e., one capability is built upon another, not in its place.

Applying this model requires a long term approach, tolerance and patience. It requires believing that costs will eventually come down.

The conventional illustration is shown above, however a representation that more accurately reflects the model, which implies that each lower layer must be extended in order to support any increase in any higher layer, is shown below.

Reference

http://www2.ifm.eng.cam.ac.uk/dstools/paradigm/trade.html

http://en.wikipedia.org/wiki/Trade-off_theory_of_capital_structure

http://en.wikipedia.org/wiki/Williamson_trade-off_model

Balance Score Card

Balance Score Card

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

A common use of balanced scorecard is to support the payments of incentives to individuals, even though it was not designed for this purpose nor is particularly suited to it.

The four perspectives

The 1st generation design method proposed by Kaplan and Norton was based on the use of three non-financial topic areas as prompts to aid the identification of non-financial measures in addition to one looking at financial. Four "perspectives" were proposed

·         Financial: encourages the identification of a few relevant high-level financial measures. In particular, designers were encouraged to choose measures that helped inform the answer to the question "How do we look to shareholders?"

·         Customer: encourages the identification of measures that answer the question "How do customers see us?"

·         Internal business processes: encourages the identification of measures that answer the question "What must we excel at?"

·         Learning and growth: encourages the identification of measures that answer the question "How can we continue to improve and create value?".

Strategy Mapping

Strategy maps are communication tools used to tell a story of how value is created for the organization.  They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain.  Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).

Reference

http://www.balancedscorecard.org/bscresources/aboutthebalancedscorecard/tabid/55/default.aspx

Supportive

What is Strategic Planning?

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.

What is a Strategic Plan?

A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise. 

What is Strategic Management?

Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change.

What Are the Steps in Strategic Planning & Management?

There are many different frameworks and methodologies for strategic planning and management. While there is no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases:

1) analysis or assessment, where an understanding of the current internal and external environments is developed,

2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 

3) strategy execution, where the high level plan is translated into more operational planning and action items, and

4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs. 

What Are the Attributes of a Good Planning Framework?

The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to advancing thought and practice in strategy development and deployment, has developed a Lead-Think-Plan-Actrubric and accompanying Body of Knowledge to capture and disseminate best practice in the field of strategic planning and management. ASP has also developed criteria for assessing strategic planning and management frameworks against the Body of Knowledge.

These criteria are used for three primary purposes:

• Ensure that the ASP Body of Knowledge is continuously updated to include frameworks that meet these criteria.
• Maintain a list of qualifying commercial and academic frameworks recommended for study and training, to prepare participants to sit for the three ASP certification examinations.
• Provide a resource and "check list" for practitioners as they refine and improve their organization's systems and for consultants as they improve their product and service offerings.

The criteria developed by the ASP are:

1. Uses a Systems Approach that starts with the end in mind.
2. Incorporate Change Management and Leadership Development to effectively transform an organization to high performance.
3. Provide Actionable Performance Information to better inform decision making.
4. Incorporate Assessment-Based Inputs of the external and internal environment, and an understanding of customers and stakeholder needs and expectations.
5. Include Strategic Initiatives to focus attention on the most important performance improvement projects.
6. Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques that are flexible and scalable.
7. Align Strategy and Culture, with a focus on results and the drivers of results.
8. Integrate Existing Organization Systems and Align the Organization Around Strategy.
9. Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits Over the Long-Term.
10. Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement.

There are numerous strategic planning and management frameworks that meet these criteria,