Benchmarking Methodology

This programme aspect encompasses the benchmarking of KZN CTC members using B&M Analysts’ ‘Market Driver’ benchmarking methodology. International experience suggests that there are numerous key variables to benchmark across all industries. But in addition to these general benchmarks, each industry also has specific parameters that need to be considered. "Like-with-like" benchmarks (i.e. benchmarks between firms competing in the same or similar market segments) are therefore the most useful, particularly when findings are being used to direct management action. Getting management to accept the need for change is made easier.

B&M Analysts "like-with-like" benchmarking approach necessitates having to have an intimate knowledge of the firms that are benchmarked. A key part of the benchmarking approach consequently involves undertaking a process benchmark at a client's manufacturing facility to generate a qualitative feel for how operational dynamic play themselves out at the firm. Whilst detailed quantitative data is generated using the Market Driver benchmarking questionnaire, as well as the customer and supplier questionnaires that are sent to the client's major customers and suppliers, the process benchmark, which encompasses management and labour interviews as well as factory measurements, allows us to garner an in-depth understanding of how process issues impact on performance levels.

The benchmarking tool is moreover not restricted to the generation of only operational performance variables. By benchmarking product and process performance variables in the firms, as well as customer and supplier demands pertaining to its performance, both firm-specific and value-chain issues are covered.

The measures that will be used to evaluate the performance of firms will follow key clothing and textile industry market drivers. Specific clothing and textile firm benchmarking data measures can be found here. In addition to these core competitiveness measures, which together indicate the extent to which firms are progressing towards the application of world class manufacturing principles in their operations, the following financial performance figures are also measured at KZN CTC members: sales, employment, profit before taxes, cost of sales, return on investment, and capital investments. These financial indicators do not form the focus of the benchmark, but are important in identifying the comparative financial health of firms. Secondly, apart from the detailed report, each participating firm will also receive an in-depth presentation of its findings, thus giving management the opportunity to engage with the findings and the reasons underpinning poor or strong performance.

The customer benchmark outlines the manner in which a firm is meeting its "market drivers", whilst the detailed firm-specific comparative benchmark questionnaire generates performance indicators of operational competitiveness, particularly as they pertain to these "market drivers". The management and labour interviews benchmark the processes and organisational issues impacting on the performance of the firm, whilst the factory measurements verify the accuracy of the information generated from questionnaires and interviews.

The supplier questionnaire operates in a similar manner to the customer tool in that it identifies key issues impacting on the relationship between the benchmarked firm and its most important suppliers. B&M Analysts’ tool is therefore capable of providing a mechanism for diagnosing not only how a firm is performing relative to another firm (or group of firms) in a similar market segment, but also why a firm's performance levels are at that particular level.

For more information on B&M Analysts' benchmarking methodology, please visit http://www.bmanalysts.com.