APPAREL QUALITY MANAGEMENT II

ASSIGNMENT-1

SUBMITTED BY: SUBMITTED TO:

MUHAMMED ATHIF Mr. SUMIT KUMAR
BFT/17/1083 Ast.Prof NIFT BBSR
SEM: 6 TH
 BENCHMARKING
Benchmarking is a process of industrial research that enables
managers to perform company-to-company comparisons of
processes and practices to identify the “best of the best” and to
attain a level of superiority or competitive advantage. The Japanese
word dantotsu—striving to be the best of the best—captures the
essence of benchmarking. It is a positive, proactive process to change
operations in a structured fashion to achieve superior performance.
The purpose of benchmarking is to gain competitive advantage.
Definition:-“The continuous process of measuring products, services,
and practices against the company’s toughest competitors or those
companies renowned as industry leaders.” (Camp 1994).
The purpose of benchmarking is derived primarily from the need to
establish credible goals and pursue continuous improvement.
Benchmarking legitimizes goals based on an external orientation
instead of extrapolating from internal practices and past trends. To
remain competitive, long-range strategies require organizations to
adapt continuously to the changing marketplace. To energize and
motivate its people, an organization must:
- Establish that there is a need for change
- Identify what should be changed
-Create a picture of how the organization should look after the
change.
Benchmarking achieves all three. By identifying gaps between the
organization and the competition, benchmarking establishes that
there is a need. By helping understand how industry leaders do
things, benchmarking helps identify what must be changed. And by
showing what is possible and what other companies have done,
benchmarking creates a picture of how the organization should look
after the change.
Benefits of Benchmarking:
Behavioral Benefits:
Benchmarking is essentially a learning experience. It helps an
organization focus and drive for consensus on what needs to be done
and how to achieve it, not argue over what should be done.
Benchmarking can provide the stimulus for improvement by people
at all levels through an externally focused, competitive situation to
achieve world-class performance with increased customer
satisfaction. Very few people are willing to settle for second place
once they are aware of what needs to be done and know how to do
it.
Competitiveness:
The bottom-line benefit of benchmarking is improved
competitiveness and increased value in the eyes of customers.
Effective use of benchmarking to develop and implement
improvement actions can help organizations achieve superior
customer service levels. This, in turn, will lead to increased market
share and improved financial results.
Types of Benchmarking:
A copier company has benchmarked against a camping goods store.
An ammunition supplier has benchmarked against a cosmetics
company, comparing shell casings and lipstick holders. An airline
company looked at a racing crew to see how to perform quick
equipment maintenance and repairs. Within the federal government,
agencies have benchmarked their customer service lines for
promptness, accuracy, and courtesy against other federal agencies as
well as the private sector.
Internal benchmarking
Internal benchmarking is a comparison of a business process to a
similar process inside the organization to acquire the best internal.
business practices. At the federal level, two Department of
Transportation sites might prepare their budget submissions for
Congressional approval. In the private sector, a retail food store
chain selects its most profitable store as a benchmark for the others.
Competitive benchmarking
Competitive benchmarking is a direct competitor-to-competitor
comparison of a product, service, process, or method. This form of
benchmarking provides an opportunity to know yourself and your
competition better; combine forces against another common
competitor. An example of competitive benchmarking within the
Department of Defense, might include contrasting Army and Air
Force supply systems for Joint initiatives. Within the private sector,
two or more American car companies might benchmark for mutual
benefit against common international competitor; or, rival chemical
companies benchmark for environmental compliance.
Functional benchmarking
Functional benchmarking is a comparison to similar or identical
practices (e.g., the picking process for assembling customer orders,
maintaining inventory controls of spare computer parts, logistics to
move operational forces, etc.) within the same or similar functions
outside the immediate industry. Functional benchmarking might
identify practices that are superior in your functional areas in
whatever industry they may exist. Functional benchmarking would
be accomplished at the federal level by comparing the IRS collections
process against those of American Express. Comparing copper
mining techniques to coal mining techniques is an example in the
private sector.
Generic benchmarking
Generic benchmarking broadly conceptualizes unrelated business
processes or functions that can be practiced in the same or similar
ways regardless of the industry (e.g., transferring funds, bar coding,
order fulfillment, admissions, replenishing inventory, warehousing,
etc.). Generic means without a brand. It is a pure form of
benchmarking,. (Camp, 1989). The focus is on being innovative and
gaining insight into excellent work processes rather than on the
business practices of a particular organization or industry. The
outcome is usually a broad conceptualization, yet careful
understanding, of a generic work process that works extremely well.

CASE STUDY
DELL COMPUTER CORPORATION
The computer industry represents fertile ground for our inquiry.
The market is highly visible, rapidly growing, and competitive, with
several well-managed dynamic firms seeking increased market
shares. In 1998,the $148 billion computer market had four main
segments: main frames, minis, workstations, and personal
computers. PC sales represented 46percent of total computer
sales. Table 2.1 tracks the performance of the top three computer
firms in market shares in the PC market between1996 and 2001
utilizing data from Data Quest and International Data. Between
1996 and 2001, Compaq’s sales growth was +30 per-cent, IBM’s
was –1.2 percent, and Dell’s was +750 percent. However,while
market shares were increasing, average margins in the industry
were decreasing from +10 to -10 percent. The PC market has
three major components: laptops, desk-tops, and servers. By
November of 2001 Dell’s rank and market shares in each
component of the U.S. PC market were number 2 in laptops with 24
percent of the market, number 1 in desktops with29 percent of
the market, and number 5 in servers with 16 percent of the market.
This gave Dell 24.9 percent of the total PC market and allowed
Dell to pass Compaq as the number one producer of PCs in the
United States.
Benchmarking Dell Computer’s Rapid-Response Communication
System
Dell Computer Corporation is one of the most visible success
stories in the computer market. By selling personal computers
directly to customers over the Internet, offering a build-to-order
sales sys-tem, and then linking suppliers, workers, managers,
customers, and service personnel together on the Internet Dell has
built a series of rapid-response systems that have revolutionized
organizational communication. Dell’s rapid-response systems have
led to fear, admiration, and attempts at imitation among its
competitors and other e-businesses.
Critical Success Factors
Dell employs four rapid-response systems. Each system uses the
Internet to provide a real-time communication system for linking key
organizational stakeholders together into a functional
community. Each rapid-response system employs a backbone
profiling system for precisely adapting the content of
communication to each of an organization’s stockholders. These
profiles are then used to improve future communication and to
maintain interpersonal relationships Between stakeholders. This
in turn enhances the firm’s organizational performance.
Individually, these four rapid-response systems are necessary
conditions for rapid and successful organizational communication
and collectively they represent sufficient conditions along with their
accompanying targets for successful organizational performance.
First, Dell has a rapid-response sales link to its customers. This
interactive online communication system allows customers to order
and track their purchase through each stage of the
manufacturing and distribution process. Employing mail catalogs and
Internet homepages, customers interact directly with Dell and can
customize their orders to meet their unique needs. Since 1998,
this includes an Internet Superstore with thirty thousand
computer parts. This Superstore provides everything from
different types of chips to different types of add-ons. These
interactive communication processes are tracked by Dell in order
to build backbone customer and product communication
profiles. The profiles of customer choice allow Dell to notify
individuals of useful add-ons, key advances in technology, and new
services which might meet the customer’s previously indicated
needs. The profile of product orders assists Dell in stream-lining its
value chain, dealing with suppliers, and monitoring product
changes. In addition Dell offers customers online chat rooms for
discussions with other customers, Dell managers, and Dell’s
maintenance staff. Once a week Dell hosts an online interactive
lecture on various new advances in computer technology. These
interactive communication processes help Dell maintain
interpersonal relation-ships with its customers and to adapt its
products rapidly to changing customer needs. The result is that
Dell’s laptop, desktop, workstation, and services have won
awards as the top products in their classes in customer surveys
conducted by PC World, Best Buy Stores, Windows Magazine, and
Fortune Magazine. Second, Dell has a rapid-response system for
providing customer service. This interactive real time
communication system can be accessed by telephone or computer
for personal or automated technical and customer support in dealing
with computer problems. This service is toll free 24 hours a day,
seven days a week throughout the world in multiple languages. Dell
monitors these service interactions in order to construct
maintenance profiles on each piece of equipment and the
appropriate instructions for its use, and to develop appropriate
repair sequences for each type of problem for use by its live and
automated repair processes. Such profiles allow Dell to warn
customers of potential problems, develop clear problem
Correction routines, and access equipment and worker performance
in manufacture and assembly. This interactive customer service
system has won Dell awards from Fortune Magazine, PC World
Magazine, Windows Magazine, and Best Buy Stores as the
number one computer firm in customer service. Third, Dell has a
rapid-response system for linking all suppliers, workers,
managers, and customers to Dell’s value chain. This interactive
real time communication system is employed to order parts,
manufacture and outsource computer modules, and coordinate
assembly and distribution of products to customers. Man-agers
employ this system for all human resource functions, workers
and suppliers for all coordination sequencing and quality control
processes, and customers to track manufacturing and distribution
processes. Dell monitors each of these activities and develops
performance profiles and report cards for immediate feedback to
suppliers, managers, and workers on their performances. The
company conducts interactive online training and workshop
programs to improve stakeholder skills and also utilizes chat
rooms for advanced learning and team coordination activities.
Dell’s real-time communication system for value-chain
coordination sets the standard for excellence in response time
and product quality in the PC industry. Fourth, Dell has a rapid-
response system for the continuous improvement of all
organizational activities. Here again, all Dell’s stakeholders are
tied together in a real-time interactive communication system
aimed at focusing teamwork on improving every aspect of Dell’s
performance. Such teams operate with and be-tween units,
outsourcers, suppliers, and managers and customers, aiming to
improve Dell’s productivity, quality, maintenance and timelines by
at least 20 percent per year. Each of these team-work processes is
monitored and profiled in order to locate innovative and ambitious
project leaders and effective team members and to motivate
stakeholders This continuous-improvement process leads the PC
industry in improved performance each year.
Benchmarking Targets
By 1998, Dell’s aggressive pricing of products and rapid-response
communication systems had begun to cut significantly into Compaq
and IBM’s market shares and reduced the profit margins of
these firms to zero. In an effort to combat these trends a
benchmarking study of all three firms was undertaken to reveal
what could be done to combat Dell’s advance.
Conclusions
The Dell Computer Company’s four rapid-response systems
provides strong support for our High-Speed Management
communication theory. Dell’s best practices does sup-port the first
proposition of High-Speed Management, namely that reducing
the cycle time an organization takes in getting its products and
services to market yields increases in productivity, quality, market
shares, profits, management and worker motivation and
commitment, and customer satisfaction. Dell’s best practices also
provide strong support for High-Speed management’s second
proposition, namely that improving an organization’s
communication is the most significant ingredient for reducing
cycle time. Removing communication bottle-necks, standardizing
information transfer, developing rapid-response systems, and
improving the quality and adaptation of messages to all
organization stakeholders are central to reduced cycle time.