Internal benchmarking

Internal benchmarking (sometimes called process compatibility) is a system where the different locations within an organization that do or produce similar products compare how they are producing the similar outputs. The purpose of this activity is to learn from each other and adapt the best practices at all locations thereby reducing costs and improving quality of the similar products and / or processes. Reference IBM Technical Report TR02.834 dated March 1979 authored by H. James Harrington.

Benefits

Decreases the cost of producing the output
Increases customer satisfaction
Improves the organization’s reputation
Improves the quality of your product
Reduces rework and scrap
Reduces support cost
Allows product to be exchanged between locations

Internal benchmarking process

At IBM the product development, manufacturing engineering, production control, quality engineer, cost accounting, production and customer engineering personnel formed a team from all locations that manufactured similar products. This team would meet to review each step in the production process bi-annually. The data at each step in the process was compared to related to:

How the operation was performed
The equipment that was used
The cost of the activity
The time required to do the activity
The measurements and the distribution of the measurements
The quality levels
The interchangeability of the in-process product with the processes at the other location
The operator instructions
Review of performance data at the higher levels of assembly and at the customer locations

AS a result of these reviews, agreed-to procedures were established and a centralized location was defined to evaluate any proposed changes to the process that may be suggested between the bi-annual meetings. Usually at these bi-annual meetings a number of good ideas are generated that are assigned to the different locations to evaluate. This led to an ongoing continuous improvement of all the common products at a rate of 10–20% per year.