Benchmarking is a company-wide process for analyzing company performance against industry leaders. Companies use it to better understand how their top products perform and allows them to develop plans to improve or adapt specific technologies or practices. Benchmarking uses a set of metrics to measure performance, such as cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure. This results in new metrics of performance that is then compared to others.
A subset of benchmarking involves ‘teardown’. Many universities and a few companies do this for profit. The most known is Portelligent. David Carey, president of Portelligent (www.teardown.com). The Austin, Texas company produces teardown reports and related industry research on wireless, mobile, and personal electronics, and writes teardown articles for EETimes magazine. An example is seen in Figure 1.
At Hewlett-Packard, benchmarking was a very serious activity. All product lines conducted benchmarking on competitors’ products. For instruments, this was a lot easier than for a complex computer system. But in all cases, the detailed process was the same:
Document all benchmarking activities by narrated video, high-resolution camera, X-ray and microscopes
Benchmark advertised performance using industry standards. Discover the maximum or minimum performance metrics
Benchmark physical parameters: size, energy usage, heat produced, etc.
Benchmark electrical parameters: power supply, number of PCBs, special electrical devices, etc.
Benchmark the product disassembly and calculate the D&B DFM/A metrics
Benchmark each PCB assembly: solder type, conformal coatings, heat sinks, number of parts, different part types, IC Testing
Benchmark each printed circuit board: size, layers, design rules, wiring efficiency, special features-distributed capacitance
Benchmark custom integrated circuits from each PCB, including silicon type, number of gates, design rules, etc.
Collect all the benchmarking metrics, photos, videos and analysis into a multi-volume report from each HP organization
HP was very humble about benchmarking. It was always looking for better ideas, or exceptional performance and putting to work what it learned. Most of the time, HP exceeded other competitors’ performance, but it wanted to know how close the competitors were coming.
Figure 1. Teardown benchmarking performed on an “Ingestible remote camera” by Portelligent.
A working definition is “the search for industry best practices that lead to superior performance.” Benchmarking is a process that aims to change operations in a structured way to achieve superior performance, based on an understanding of a company’s performance and how it compares with the best in the world. The basic philosophical steps of benchmarking, which are fundamental to success, are:
Know your operation
You need to assess the strengths and weaknesses of your internal operation, keeping in mind that competitors will, in turn, be analyzing you and that if you don’t know your own strengths and weaknesses you will not be able to defend yourself.
Know the industry leaders or competitors
This helps you compare yourself with industry best practices and differentiate yourself from your competition.
Incorporate the best
Learn from your industry’s leaders or from companies with particularly good functions that are important to your operation.
Install the best of the best practices found, capitalize on your existing strengths and bring your weaknesses up to strength.
Benchmarking is the formalized and disciplined application of these basic steps to improving operations, as described in Figure 2. Table 1 shows some of the key reasons for benchmarking. The contrasting approaches ‘with benchmarking’ and ‘without benchmarking’ are detailed.
Industry practices change. We have not only to establish the performance gap between our practices and the best in the industry, but also to project future performance levels; will the gap widen, narrow, or stay the same?
Figure 2. Benchmarking process steps. [Source: Martin Tarr]
By projecting the gap, we can define the goals and targets you must achieve to close the gap and meet or exceed desired or competitive performance, as shown in Figure 3a & b. This shows the differences between the internal metric and that projected for industry best practices plotted against time, starting at the time of the benchmarking investigations. The analysis phase then identifies best practices and determines how you can modify, adapt, or apply them directly for use within your company. This needs a thorough understanding of the practices and why they are superior
Table 1. Some of the key reasons for benchmarking and the contrasting approaches with and without a benchmarking view.
Figure 3. a. Conceptual projection of the benchmark gap [Source: Martin Tarr]
Figure 3b. 10-year logistics productivity trend—the ‘Z’ chart [Source: Martin Tarr]
Benchmarking analysis templates are available, along with other “Improvement and Quality Tools” from CItoolkit.
1. Portelligence; www.techinsights.com.
2. Tarr, Martin, Benchmarking, www.mtarr.co.uk/
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