Benchmarking Overview:
In 1912, Henry Ford of The Ford Motor Company watched men cut meat during a tour of a Chicago slaughter house. The carcasses were hanging on hooks mounted on a monorail. After each man performed his job he would push the carcass to the next station. Less than six months later, the world’s first assembly line started producing Magnetos in the Ford Highland Park Plant. In other words the idea that revolutionized modern manufacturing and automotive history was imported from another industry.

Benchmarking is simple as a concept but much more involved as a process. The ultimate payoff is that you can become the best of what you do, and continuously improve upon that superiority.

Benchmarking is a means of identifying best practices and using this knowledge to continuously improve our products, services, and systems so that we increase our capability to provide total customer satisfaction.

Today our performance is not of the same world-class standard as a benchmark business. The delta is the competitive gap

Benchmarking and improving our business as a result means a surge in business performance and a Competitive Advantage.

Key Point: Do Not Just Copy, Adopt and Adapt and then Advance

Define Performance Objectives:

What does it mean to Define Performance Objectives?
A performance objective is a statement of your projects output performance level that will satisfy the project Critical-To-Quality CTQ(s). It is the projected reduction in defects you plan to achieve for your process or product. Typically, this is stated in terms of defects per million opportunities (DPMO) reduction and a corresponding target Z-value. In the Lean Six Sigma Measure Phase, you determined the current process performance. In the Analyze Phase you will state what the end results of the Lean Six Sigma project will be by statistically defining the goal of the project. In addition, an estimate of financial benefits is due in Analyze.

Why is it important to Define Performance Objectives?
It is important to identify your improvement goals in measurable terms in order to define the level of improvement you wish to achieve and provide a focused target toward which you can direct your efforts.

If I benchmark, performance standards are based upon:
Closing the gap with the competition
Exceeded projected competitive performance
Similar performance in dissimilar businesses
Gathering best practices from multiple sources to become best in class
Becoming as good or better than a substitute product/service

If I do not benchmark, performance objectives are based upon:
For a process with a 3 Sigma Quality level or less, decrease percent of defects by 10x and for greater than 3 Sigma Quality level, decrease % defects by 2x
If your process is in statistical control (Run Chart or Control Chart), the next improved performance objective comes from a capability investment as in facilities, equipment, digitization, etc.
Corporate mandate
Compliance/legal
Voice of the Customer (VOC) data

Key for best results:
Be creative and think out of the box
Consider all organizations, not just corporations
Review all sectors such as Private, Public and NonProfit
Study domestic and International organizations
Benchmarking is the process of continually searching for the best methods, practices and processes, and either adopting or adapting their good features and implementing them to become the best of the best.
Key Point: Benchmarking is a continuous process of measuring products, services, and practices against the toughest competitors and/or those companies renowned as the leaders
Example: In the 1980s the Remington Rifle Company, a division of giant DuPont Corporation, had a technical issue it was struggling with. Market Research showed that customers wanted the shells of the bullets to be shiny. Plant Managers pay little or no attention to this CTQ, after all Remington had been

Steven Bonacorsi is a Senior Master Black Belt instructor and coach. Steven Bonacorsi has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies. Bonacorsi Consulting,

Steven Bonacorsi
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Phone: (603) 401-7047
E-mail: sbonacorsi@comcast.net
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One of the greatest complaints we hear from senior managers is “projects are successfully completed, but I’m not seeing a significant change to the bottom line.” That’s because in the Define stage of (DMAIC) , Six Sigma experts don’t have enough information to quantify the benefits. They are predicting a bottom line financial benefit without truly understanding how the process behaves, let alone how it would behave after the change. Without seeing the big picture you may complete a successful Six Sigma project and see no impact in dollars for your organization. There is a better way. With Process Modeling you create a simple simulated model of the process. You will visually see which projects will affect the total output and which will sub-optimize the system.

Key advantages of integrating Six Sigma phases (DMAIC) with Process Modeling are provided below:

Overall interdependencies in processes
- The standard Six Sigma toolbox has no way of showing the interdependencies between one area of the process and another. In complex change initiatives where there are interdependencies between processes, when incidents happen that cause delays, bottlenecks, variability etc., if you can’t show the interdependencies, understanding the system and resolving issues is very difficult. If you can’t understand the system and pinpoint the waste and bottlenecks, changing the system could be risky and typically does not provide the desired results. A simulated model shows those interdependencies, which allows you to uncover changes that will affect the overall system.

Risk free experimentation
- It is proven that real-time experiments are costly and can have an enormous negative impact on the system. If you are experimenting with a simulated model of the system, the only cost is setting up the experiment and reviewing the results. There are no negative impacts to system output or to the morale of the workforce in trying new process experiments. You can change the parameters, run various scenarios and if the desired outcome is not achieved, you can pinpoint the root causes, all the while gathering more information about system behavior – without any disruption to the real system.

Reduced experimentation time
- You can run hundreds of experiments a day rather than hundreds of days per experiment. Many processes have a cycle time of weeks or even months. Running enough replications of an experiment to validate the results can be overwhelming. With a simulated model, you can run as many computer simulations as you want and develop plans based upon the review of results.

Impact of change on the existing process
- Processes that achieve the goal of Six Sigma (or a high sigma level) fall out of spec if the volumes change. For example a 50% change to incoming calls to a call center may cripple a customer-oriented sales process. Planning for change in your system by using a simulated model to understand the effects of volume change, product stream substitution, staffing policy or other changes can significantly reduce project risks and the associated costs.

Steven Bonacorsi
Lean Six Sigma Master Black Belt
sbonacorsi@comcast.net
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