POLICY

While it is good to seek best practice through benchmarking with others there are times when the structure and characteristics of a system present some difficulty for direct comparisons.

Different environments produce differing results and in fleet activities there are many variables such as driving styles, locations, traffic conditions, journey characteristics and the weight being carried in the vehicle can render meaningful external comparisons difficult.

In reality the diversity of fleets and their operation do not readily lend themselves to meaningful comparison.

In this light external benchmarking in the normal sense, comparing one fleet against another does not sit naturally with the activity of fuel usage.

Key Performance Indicators (KPI’s), such as the total kilometres travelled per year for instance, do not lend themselves to meaningful comparisons with others.

In the first instance the organisation needs to establish its current KPI’s and use these as a benchmark for improvement.

The object is for your organisation to reduce its total distance travelled and the fuel it consumes in doing so.

WHAT IS BENCHMARKING?

Benchmarking is an organisational change practice; basically it is the practice of finding new ways of doing things through an ongoing, systematic process to introduce best practice into your own organisation.

The search may be of products, services, or business practices and processes of those organisations recognised as leaders in specific business approaches, practices and processes that you have chosen as an opportunity for reengineering.

The power of benchmarking resides in its objectivity. Setting of arbitrary targets and change strategies is replaced by a function of what a third party has achieved and which cannot be disputed, and a benchmarking team itself develops the plan for implementation of change.

Even when it is the first time the organisation has conducted an analysis on the business process it is highly likely that the act of undertaking the analysis will be enough to identify considerable improvements to the process.

This is a major benefit of benchmarking, and if any of the improvements can be instituted immediately, without capital expenditure, then they should.

INTERNAL AND EXTERNAL BENCHMARKING

You can benchmark internally, by comparing yourself with other departments, business units, or locations within your own organisation.

Or on the other hand you can benchmark externally against:

• Competitors (competitive benchmarking);
• Others in the same industry (industry benchmarking) who may not be competitors whether because of differences in product mix or because they are in a different country.

• Organisations not in the same industry but which have similar needs and processes. Known as generic benchmarking, this can be very effective even though it is generally the most difficult.

Process benchmarking refers to business processes and is indistinguishable for practical purposes from generic benchmarking.

Functional benchmarking generally refers to a function in the organisation, such as human resources management. A function is a collection of processes and to do it one needs to disaggregate the function into business processes, such as induction training, before being able to engage in meaningful comparisons. Hence, it too ends up being similar to generic benchmarking.

AN ONGOING PROCESS

Benchmarking is like a turning wheel. If you are going to undertake benchmarking at all, you should make it an ongoing business practice, like strategic planning, budgeting, and continuous improvement.

Benchmarking is a cycle that repeats itself, rather than something done once and for all. It requires patience and a willingness to continually work at issues that arise.

As with all change processes, measurable improvements may take time to emerge and the organisation must be committed to ongoing and long-term change.

Each organisation’s approach to benchmarking may differ but successful benchmarking efforts share several common elements such as:

• Involving the right people so that preparation and implementation are supported.
• Choosing the right things to benchmark that is, those things being most important to the success of the organisation.
• Having a common understanding of just what is involved so that the process can be managed. It is easy to spend a lot of time, energy and money in attempting to gather data that in itself is not usable.
• Gaining a thorough understanding of your own situation so that when you compare your business practices to somebody else’s, you are not doing it from a position of ignorance.
• The fundamental base for success is to ensure the comparison of like systems (apples with apples).
• Choosing suitable partners. It is especially worthwhile to search carefully for those organisations that are most likely to offer value.

• Turning ideas/lessons into practical improvement projects and managing the improvement projects to fruition.

Benchmarking programs should be continually refined and customised to suite the organisations own particular circumstance and be integrated into other management functions such as strategic planning, annual budgeting and improvement programs.