Sort of like the bumper sticker that asks ‘How’s My Driving?’, FPInnovations has developed a benchmarking tool that uses a company’s own data to identify strengths and weakness within their current operations, and provide recommendations for action.
Confidential benchmarking studies are established, well recognized methods that provide individual companies with the information they need to prioritize their improvement efforts. The information collected during benchmarking establishes a framework for businesses to measure and improve their performance year over year, and compare their performance to others in their industry sector.
Maintaining confidentiality during benchmarking is crucial. A company is not individually identified, nor is individual company information released to the public. Only aggregate sector information is used to compare an individual company’s performance to that of the sector.
Recently, FPInnovations has been working closely with Canadian businesses in the Kitchen Cabinet, Millwork and Furniture sectors to define the performance criteria most useful to company owners and managers.
These criteria range from qualitative factors, such as the presence of safety programs and sales and marketing practices, to quantitative criteria such as total sales, and average manufacturing labour rate. For example, businesses have indicated that they would be interested in knowing their sales per employee in comparison to their peers, while others have indicated that having a sense of their average labour rate in comparison to the sector would be useful to them.
Through an interview with company owners and managers, a set of questions in ten areas that cover such topics as ‘Sales and Marketing’, ‘Human Resources’, ‘Operations’, ‘Quality’, and ‘Lean Manufacturing’ are asked. In addition, information to calculate Key Performance Indicators is gathered.
Following the interview, collected information is used to generate a set of individual performance graphs under each heading. These graphs also show how activities and performance in each area are inter-related. A summary table shows how the company compares with other companies within the same sector. Based on the results so far, some interesting information is emerging, notably in terms of sales per square foot of manufacturing space and sales per worker. Individual indicators for inventory, materials and manufacturing labour as a percentage of sales are also generating keen interest from benchmarking participants.
What is most exciting is that the first participants have already begun to implement improvement efforts that were identified through their benchmarking activity. Some of the efforts companies are focusing their actions on include addressing quality issues in order to reduce call backs, implementing Lean Manufacturing principles to improve product flow and gain manufacturing efficiencies, increasing training activities to reduce labour costs, and undertaking other process improvements to reduce manufacturing costs.
Stephanie Roll, VP of Alberta-based Executive Millwork has this to say about her experience with the benchmarking tool. “Our Management Team found the summary information that you delivered quite accurate and beneficial and are looking forward to further evaluation and input from FPInnovations. We recognize that there are several areas that we require further support and continued growth in, to remain competitive”.
Over the next three months, FPInnovations is seeking additional companies who wish to benchmark their performance. Companies that participate will be interviewed by a local FPInnovations Industry Advisor from which a customized report that compares their company to that of the sector, as represented in an aggregate form will be produced for them.
While the first benchmark report with a company can identify areas of improvement, to be fully effective, annual benchmarking provides the information to truly gauge if improvement efforts are making a difference.
To find out more about the confidential benchmarking tool and how your business can benefit, contact email@example.com