Benchmarking
Logo here
Paul G. Russell, CPP/Fellow
Packaging Process Manager
Hewlett-Packard Company
March 2002
Overview
• Process used to collect information
• Analysis
• Transferring into action
Where packaging has influences in the customer experience
lifecycle
repurchase & recommend
use &
grow
awareness &
consideration
loyalty
first 30 days
Disposal or return
select & buy
Brand Image
& Promise
Communicates Solutions
Unpacking & OOBE
Getting it home
Specifications
Packaging Cross Functional Interaction
Materials Engineering
Marketing
Manufacturing Engineering
Supplier Packaging
 Receiving
 Material Handling
Outbound Product Packaging
 Technical Specification/Design
Price leverage
Graphics Standards
 Customer Perception
 Legal Requirements
 Language Issues
Material Handling
Electrostatic Discharge (ESD)
Process Flow
 Manufacturability
 Reliability
 Manufacturing Costs
OEM Contract Mfg.. Relationship
Post Mfg. Support (conflict resolution)
Quality Assurance
Environmental Test Standards
 Product/Packaging Design
Packaging
Distribution/Logistics
Process
Shipping Costs
Regulatory Compliance
R&D
Suppliers
Sales & Service
Product Design
 Mechanical Stability
 Reliability
 Logistical Considerations
 Design for Mfg.
Managing Relationships
Customer Satisfaction
 Warranty/D.O.A.
 Environmental Concerns
What is benchmarking
Performance
Process
Strategic
Strategy Development
Project Prioritization
Maintain Leadership
• It is a process of identifying, sharing,
and using knowledge and best
practices. It focuses on how to
improve any given business process
by exploiting top-notch approaches
rather than merely measuring the
best performance.
• It is a combination of competitive
intelligence and looking at best in
class
•Helping to know yourself so you
can judge others
•Helping you to know your
domain so you can determine an
advantage
Performance Benchmarking
Competitive Analysis Program (CAP) – direct comparison of product to product
•
Process
• HP provides information and samples (if possible), 3rd Party conducts
analysis
• Share results with participating site and post results to program web site
•
Elements Captured
• Component and Total Cost Analysis
• Comparisons (% Package Cost/Street Price)
• Physical properties
• Graphics - Printing process used, # of colors, # of languages, Symbols used
• Materials (box, cushion, thermoform, & other)
• Attributes - environmental, ergonomics, out-of-box experience, localization, etc
• Forensics Photographs
Competitive Analysis Program (CAP)
Process Flow
Pkg samples
and
information
clarification
HP Division
CAP
submission
form and
samples
Competitive
Analysis
Program
No
Competitive
samples
Enough
info and
samples
Obtain
Competitors
products
Publish individual
report to HP Division
Document &
Photograph
Load to HP web
database
Analysis
Return all provided samples
HP responsibility
3rd party responsibility
Performance Benchmarking
Performance Benchmarking
CAP Summary Example
% of
P kgoutM arket H P V T otal P roduct
ofS hare
P kg $
C ube (in) env iro ergo box
P roduct C ategory
pack out
(m in/sec)
P allet Load E fficiency
1200x 1000
48x 40
A rea
U nits/
A rea
U nits/
E fficency Layer E fficency Layer
H ig h -E n d
H P M o d el X
C om petitor M odel
C om petitor M odel
C om petitor M odel
M id -R an g e
H P M o d el X
C om petitor M odel
C om petitor M odel
L o w -E n d
H P M o d el X
C om petitor M odel
C om petitor M odel
X
X
X
56
12
16
16
L o w est
+ 18%
+ 59%
+ 35%
1.1
1.3
1.45
2.07
96.98
98.92
93.26
79.49
10
8
5
5
93.95
95.83
90.35
77
10
8
5
5
X
X
48
14
10
+ 27%
L o w est
+ 59%
1.04
1.25
1.23
79.68
88.71
80.88
8
8
5
96.48
85.94
78.35
10
8
5
X
X
35
34
13
+ 58%
+ 9%
L o w est
96.98
94.36
89.01
10
12
8
93.95
91.41
86.22
10
12
8
NA
NA
NA
B est
M iddle
W orst
Performance Benchmarking
CAP - Forensics Photograph Website
Performance Benchmarking
Critical Focus Areas
•
Product Selection
•
•
Get agreement on how products will be selected for comparison (industrial design, price point,
features, etc.)
Determining Quotable Volumes
•
Using generic on-going monthly volumes for costing (5K, 10K, 25K)
– Use "threshold volume" for generic numbers. This assumes in a competitive environment companies are
all using technologies and processes that are cost effective at threshold volumes.
– Map to your typical volume runs.
•
•
Highly People Dependent
•
Use product line representatives to determine what products (yours and the competition)
should be benchmarked and volumes to quote. Poor upfront data leads to poor results.
•
Check information obtained via 3rd party with internal engineers to validate assumptions and
findings.
Sourcing Products
•
Develop clear budget expectations upfront for buying competitors products. Using a “buy &
return” method is difficult and can exceed regional sourcing capabilities.
•
Leverage internal competitive test labs – they may already have what you want
•
Purchase products quickly, once products are identified, as they have a tendency to roll to the
next generation
Performance Benchmarking
Process Benchmarking
using a survey instrument
We used a questionnaire that
addressed 4 major categories:
• Procurement processes
• Packaging processes and interactions
• Marketing approach and customer
value
• Environmental focus
For each area, subcategories of
interest include:
• Structure
• Process
• Metrics
• Future (Packaging only)
• Customer values (Marketing only)
• E-commerce and total buy
(Procurement only)
A gilent
C om pany A
C elestica International Inc
C isco
C om paq
D ell
E pson
C om pany B
IB M
Intel E nterprise S erv er G roup
C om pany C
C om pany D
S un M icrosystem s
C om pany E
H ew lett-P ackard
W orks ta tions
Stora ge
Se rve rs U N IX
Se rve rs N T
Pe rs ona l A pplia nc e s
L a s e r Supplie s
L a s e r Printe rs
Ink S upplie s
Ink P rinte rs
Im a ging
H om e PC
Fa xe s or A ll-in-O ne
B usine s s P C
C om pany
C orporate
Who we looked at
O ther
unspecified*
unspecified*
unspecified*
M icroelectronics
unspecified*
*N O T E : D ue to an error in the electronic v ersion of the surv ey, respondents could
not enter tex t into the "other (specify)" response for this question
Process Benchmarking
Critical Focus Areas in
using a Survey Instrument
?
• Selecting right players and getting
them to participate can be difficult
• Use of a 3rd Party is critical
• Pre-established relationships are
helpful (conferences and seminar)
• Develop the right questions
• Spend about half of your total project
time designing/optimizing the
questions
• Sell the benefits/value to participants
• Give them examples of what they’ll
get for their effort (report)
• Make them part of a team
• Provide frequent updates
• Get you hands on the raw data
• Allows drill down and complete
understanding of the details
• Provides opportunity to validate 3rd
party analysis
Process Benchmarking
Strategic Benchmarking
through interviewing
• Know your strategic opportunities
• Identify companies, outside our
sector, which are best in class in
those areas
• Engage companies
• Why them and your intent
• Non-disclosure agreements
• Reciprocal
• Agree on process and amount of
time
• Conduct interviews and document
• Compile into recommended lists of
projects or process modifications
Critical Focus Areas
Interviewing In Teams Of Two
• Each Interviewer takes a different role
• Each is tracking and recording different types
of information on different levels
• Each can offer help when the other gets
stuck
• Having two interviewers is indispensable for
reconstructing and interpreting later in the
synthesis process
Good information is:
“Two people are
80% more
effective in
gathering
information than
by one person
alone”
• Specific attributes which are important to you
• Useful for creating a clear understanding
• Focused on key drivers for your business
• Captures key issues/challenges
• Identifies what isn’t known by the interviewee
• Adds value in both directions
Ask permission to follow up and/or
come back
Strategic Benchmarking
Analysis
• For each approach
Raw Data
(Performance, Process, Strategic)
• Bring in a fresh person
• review first draft findings
• distill it down to the key areas
Processed Data
Knowledge
• Team works with the new person
• explain the unique elements
of the raw information and
first draft analysis
• Key activities during this phase
include:
• Analyzing trends
• Identifying best practices
• Determining opportunities
Understanding
• Team identifies critical few
opportunistic strategies
Pulling it all together
Used HP change management process
• Developed a list of opportunistic
strategies
• Tactical projects mapped into
strategies
• Identified key stakeholders to own each
strategy
• Internal packaging council (control
resources)
• Get their input and use their language
• Gain acceptance and buy off
• Use council meetings to track progress
and keep everyone on the same page.
• Develop/modify reward structure to drive
the right behaviors.
Conclusion
Benefits I hope came across:
• Exposure to our benchmarking
methodologies
• How we identify key opportunities
• How we transfer this knowledge into
actionable strategies and projects
Thank You
Any questions?
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