Benchmarking is seeking the best practices from competitors or industry. This means that individuals/ companies will be looking for the best performers in the market. Information provided through benchmarking is used by organizations to improve their marketing, production and sales activities. It may also take place internally where some department in an entity performs better than others. Thus, underperforming departments/ sections within an institution will bench mark on high performers so as to learn new techniques in carrying out their day to day duties. The end result would be improved operational activities which translate to increased profit for the entity and value addition for shareholders. Lean-six sigma on the other hand is geared at reducing the level of waste coming from the production activities. At the same time, the speed at which goods and services are offered improves due to elimination of unnecessary activities. Thus, this essay discusses the use of Benchmarking and Lean Six Sigma in organization to improve their processes, activities and sales.
Companies struggle to remain at the helm of their competitive business. Thus, there are various techniques applied to ensure that they do not lose their competitive advantage. Some of the strategies available may be used solely or in collaboration with others. Benchmarking can be applied together with lean-six sigma to improve the state of businesses. The following ways shows the methods through which these strategies can be used interactively. The first thing an organization does is to engage in benchmarking. There are many forms of benchmarking that includes internal and external procedures. This means that an organization may focus on a single task, entire process or department or economy as a way of gathering enough data to enable it make a plan for change (Agrawal and Rakwal, 2012). This goes hand in hand with comparison between the two institutions that are not only at the same level or may be selling or dealing with the same kind of products. The lessons learnt or knowledge gained from the endeavor will be used to schedule and come up with a new process that will not only see the institution reduce wastage but also increase commitment to quality production (Assarlind and Aaboen, 2014).
Lean-six sigma will come into play at this point when information and data is available for application. To change the way things are done in an institution, management must evaluate the current processes in organization so as to locate the defaults that may be hindering effectiveness and efficiency in performance. Business process changes are internal initiatives that tend to re-organize systems and make them better. Changes come with challenges of implementation due to the following reasons. First, workers and managers must show support for the new system. In addition, it must be aligned to the prevalent culture in organization so as to see the light of the day (Basu, 2009). Second, managers must champion for the changes. Communication is one of the most powerful tools that any entity can use to mobilize for support. Six-sigma assumes that an entity should seek to stability in terms of production and business operations. Moreover, the new processes should be well defined, analyzed, controlled, measured and improved. The plan should suite the organizational needs. Quality improvement is at the centre of change as customer demands high quality products. Changing the infrastructure can be a challenging task as huge capital investment is made by the institution (Deforche and Saelen, 2012).
Some of the institutions that have applied these strategies in their business portfolio include Motorola and Microsoft. In the year 1986, Bill Smith came up with a six sigma strategy to improve quality and reduce wastage at Motorola. The reason as to why the company did this is that it suffered economically due to massive wastage of resources. This would lead to reduced sales as Motorola handsets were sold at a higher price than those of competitors. This meant that the company oversaw decline in customer clientele (Desai, 2010). Mr. Smith decided to change the process from the point where input gets into the company to the point where they leave the institution for market. Therefore, he mobilized workers and changed some of the systems to ensure that they were on the same line and could serve the purpose intended. The standard set by the company for its production activities would e attained through close quality mobilization. Another organization that utilized lean-six sigma is general electric under the leadership of Jack Welch. This happened in the year 1995 where Jack intensified the use of this method that saw the entity move from sales of $13billion to hundreds of billions (Harmon, 2007). He ruled the organization through democratic means by delegating critical roles to its managers. Therefore, managers would assume roles that were assigned to the head of the institution so long as they restrain themselves to laws and regulations. In addition, they would from time to time engage in service improvement that was necessary for the growth of the institution. Thus, the company experienced growth during the reign of Jack. At the same time, he set the pace for others who came after him to follow (Hennig, 2010).
Microsoft under the leadership of its founder Bill Gates has been accused by its competitors for unfair competition. This is because of the trend adopted by the institution benchmarking some of the best practices in the industry. The release of the x box consoles by Microsoft raised a lot of question on copyright issues as other institutions such as Apple (Weinstein, 2009). They struggled to make the best consoles that consumers would accept and subscribe to. Thus, the competition intensified as the entity gathered information and benchmarked best performers in the same industry. Some of the consoles developed performed poorly in the market. However, with consistence research endeavor, Microsoft came up with new ways of offering consoles such as through personal computers (Johnston and Marshall, 2013). A good number of consumers and clients were able to access the product with easiness hence increased sales. Moreover, the business of software development and sales seemed challenging in the early 1970’s. Apple intended to sell its software’s directly to consumers where they availed them through agents. Thus, the company had full knowledge of the trends in the market. This forced Microsoft to change its business strategies as a way of counteracting competition (Klitzke and Lang, 2009).
There are many ways through which improvement strategies can be applied to organization. One of the organizations that needs process improvement is coca-cola company. Though the company has made tremendous progress in the past, it has been hit in some regions by competitors such as Pepsi. This culminates from the leadership style in application and systems in use. To change this, I would use benchmarking to evaluate the best organizations in the beverage industry. This process would follow the steps below. The first step is to evaluate our organization and establish the strength and weaknesses. This may involve conducting a SWOT (strength, weaknesses, opportunities and threat) which help an institution make decisions for change. The next step is identification of the best institution that seems to do well in the market. Pepsi products have been doing well in United States and India (Lertwattanapongchai and William Swierczek, 2014).
By dominating the market, the company makes it hard for other companies to venture into the industry. The identification process depends on the kind of goods or specific products coca-cola is offering to particular market. A team will be selected to pay a visit to competitor’s production plants to enquire more about their success. This means that they have to inform Pepsi management that they are conducting benchmarking. This is to clarify issues that may arise in the event the team is dispersed to go and carry out the research. This team will be selected on merits and will comprise of workers from various departments (Lim and Lusch, 2010). Upon approval by the other party or the competitor, the team will make a visit and gather all information on system improvement and strategies in place. The recommendations will therefore be tabled to the organization management to be debated and decision made in regards to system improvement (Upson and Notarianni, 2010). The same team will be tasked with research on the available options for the entity in the market. The reason behind this is that some of the critical information may not be availed by the company. Thus, internet search may help come up with critical data about the market and the current trends. This ensures that the decision undertaken is inclusive of all the factors that may tend to hinder smooth running or realization of the desired change. At this point, the entity will be determined and eager to put into actions the best practices that may lead to success (M., 2015).
The second strategy to implement is lead and six sigma methodology. Coca-cola company may benefits a lot from this initiative in the sense that six sigma is intended to deal the production process. The first move to make is to engage in SWOT analysis. Carrying out the analysis is important in the sense that an individuals or organization understands its weaknesses. Some of the weakness may be tied up to factors such as labor inefficiencies, culture and increased cost of production (Sarkar, Ranjan Mukhopadhyay and Kumar Ghosh, 2014). For me, I would utilize the strategy to ensure that business processes are aligned to the objective stipulated in the organization master plan. First, raw materials should be sourced from credible or sustainable dealers or producers. This is to eliminate delays experienced during transportation and supply activities (Nielsen and Cleal, 2011). The ordering of input resources may bring about inefficiencies in the event an entity suffers consistent delays. Consequently, production time will be longer hence delaying the supply of products in the market for consumers to purchase. At the same time, the level or percentage of wastage during production need be looked at. In the preparation of soda and other privileges, water and ingredients are used. The company sources the ingredients from various suppliers in the country as well as worldwide. Some of these ingredients are consumed during production an action that leads to low production in volume (Peñaloza, Toulouse and Visconti, 2012).
In implementing six-sigma, I will target the following issues that affect production. They includes cycle time, pollution, customer satisfaction and costs. Cycle time represents the period between the entry of raw material and conversion to finished products. If this time takes long then goods are more likely to face delays in reaching the market (Schröder, 2010). Consumer will eventually suffer extortion from unscrupulous traders who take advantage of product shortages to hike prices. In addition, the company will be losing profit that it could have made by selling products to existing customers. Pollution is concerned with the level of wastage or unused material that passes through the production line (Ray and Das, 2010). Disposal of these y-products may pose some challenges to the entire industry. The environment should be given priority when disposing unused materials. These materials are not only harmful to the environment but also pose danger to human life. Customer satisfaction is the ultimate goals of coca-cola. Thus, enduring that the entity runs effectively to achieve it will be a priority. Cost reduction comes in form of resource maximization and waste recycling (Salah, Rahim and Carretero, 2010).
In conclusion, process improvement comes in different forms as individual/group and organization face diverse challenges. The level of production largely depends on the efficiency of the system in place. This insinuates that in the event the system suffers inefficiency, the production goes down. Supply on the other hand will reduce an action that leads to increased prices. The company makes losses due to some of these inefficient methods or approaches to production. With six sigma and benchmarking initiatives, organizations are able to divert negative outcomes. They are in a position to evaluate and correct mistakes happening in the operational level.
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