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Part Four
Improvement
Critical commentary
It can be argued that there is a fundamental flaw in the whole concept of benchmarking.
Operations that rely on others to stimulate their creativity, especially those that are in
search of ‘best practice’, are always limiting themselves to currently accepted methods
of operating or currently accepted limits to performance. In other words, benchmarking
leads companies only as far as others have gone. ‘Best practice’ is not ‘best’ in the sense
that it cannot be bettered, it is only ‘best’ in the sense that it is the best one can currently
find. Indeed accepting what is currently defined as ‘best’ may prevent operations from
ever making the radical breakthrough or improvement that takes the concept of ‘best’ to
a new and fundamentally improved level. This argument is closely related to the concept
of breakthrough improvement discussed later in this chapter. Furthermore, methods or
performance levels that are appropriate in one operation may not be in another. Because
one operation has a set of successful practices in the way it manages its process does
not mean that adopting those same practices in another context will prove equally successful.
It is possible that subtle differences in the resources within a process (such as
staff skills or technical capabilities) or the strategic context of an operation (for example,
the relative priorities of performance objectives) will be sufficiently different to make the
adoption of seemingly successful practices inappropriate.
Improvement priorities – what to start on? 7
Improvement priorities
In Chapter 3, when discussing the ‘market requirements’ perspective, we identified two major
influences on the way in which operations decide on their improvement priorities:
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the needs and preferences of customers;
the performance and activities of competitors.
The consideration of customers’ needs has particular significance in shaping the objectives of
all operations. The fundamental purpose of operations is to create goods and services in such
a way as to meet the needs of their customers. What customers find important, therefore, the
operation should also regard as important. If customers for a particular product or service
prefer low prices to wide range, then the operation should devote more energy to reducing
its costs than to increasing the flexibility which enables it to provide a range of products
or services. The needs and preferences of customers shape the importance of operations
objectives within the operation.
The role of competitors is different from that of customers. Competitors are the points
of comparison against which the operation can judge its performance. From a competitive
viewpoint, as operations improve their performance, the improvement which matters most
is that which takes the operation past the performance levels achieved by its competitors. The
role of competitors then is in determining achieved performance.
Both importance and performance have to be brought together before any judgement
can be made as to the relative priorities for improvement. Just because something is particularly
important to its customers does not mean that an operation should necessarily give
it immediate priority for improvement. It may be that the operation is already considerably
better than its competitors at serving customers in this respect. Similarly, just because an
operation is not very good at something when compared with its competitors’ performance,
it does not necessarily mean that it should be immediately improved. Customers may not
particularly value this aspect of performance. Both importance and performance need to be
viewed together to judge the prioritization of objectives.