Benchmarking Tool Benchmarking Purpose provide realistic goals and

Benchmarking Tool: Benchmarking Purpose: provide realistic goals and direction; monitor performance; improve processes to match the best in Higher Education. Benchmarking is the technique of comparing practices and processes to the best in the industry. Remember: Some processes should be compared to norms outside of Higher Education! D

D Benchmarking Establishing benchmarks • Call similar departments at other universities or businesses. • Consult other departments within Clemson University. • Contact individuals who have experience with or ties to other organizations.

D Project Charter Understanding Metrics What is a metric? • A measured variable that can be tracked and used to detect errors, inefficiency, or improvement. It can be a process metric or and organizational metric. Process metrics apply to specific processes or programs like time, cost, or quality. Organizational metrics address organization-wide issues like employee satisfaction and turnover. Choose one or more to describe accurately your process’ efficiency.

D Project Charter Understanding Metrics Kinds of Metrics • Time Metrics – Value-added time – Non-valueadded time – Processing time – Cycle time • Cost Metrics – Cost savings – Opportunity cost – Decreased waste • Quality Metrics – Customer satisfaction – Percent complete and accurate • Output Metrics – Backlog – Work in process

D Understanding Metrics Project Charter You must have a baseline to measure improvement. The Lean Office will help establish your baseline metrics.

M Objective Data To improve your process, you need to define what category you want to improve: quality, cost, time, or output. Quality: Satisfaction Accuracy Cost: Savings Waste avoidance Time: Cycle time Waiting Output: Backlog Work in process

M Objective Data For every problem, there are usually many causes. Identify the main contributors. Lean calls these the “vital few. ” They are more important than the “trivial many. ” Rule of Thumb: 80% of a problem is the result of 20% of the causes

M Objective Data Ways to Quantify Count: Measure: • How many vendors were paid on time? • How many vendors were paid late? • How many days early were vendors paid? • How many days late were vendors paid? Good Better • How long did it take for a bill to move through the process? Best

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart • Check sheets gather data on various effects and how often they occur. • This helps you separate the significant from the trivial.

M Objective Data Tool Options Choices: • Check sheet • Histogram • Example: Causes of late payment X X X X X Lost bill Waiting for approval Run chart Late arrival Waiting for check to be cut

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart Example: Timeliness of vendor payment X X X X X Paid 4 - Paid 2 - Paid 1 - Paid 35 days 3 days 0 days 2 days 4 days early late

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart • Histograms are bar charts that show the frequency of an event. • They are easily created from check sheets. • They help formulate hypotheses regarding root causes of problems.

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart Example: Causes of late payment Lost bill Waiting for approval Late arrival Waiting for check to be cut

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart Example: Timeliness of vendor payment Paid 4 -5 days early Paid 2 -3 days early Paid 1 -0 days early Paid 1 -2 days late

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart • Run Charts are line graphs that show variation in the process over time. • They help identify when problems are happening and allow us to focus on the particular circumstances in which the problem occurs.

M Objective Data Tool Options Choices: • Check sheet • Histogram • Run chart Example: Bills paid late Mon Tue Wed Thu Fri

M Benchmarking -Revisited Do you have the right benchmarks? • Now that you understand your process thoroughly, identify which elements and indicators are key to process success? These are your Key Performance Indicators. • Gather new information as necessary to compare your indicators with best practices. • Which of these is the biggest problem for your process?

M Benchmarking -Revisited Progress Check By now you have: • measured your current status; • identified industry norm; • identified performance gaps, and • gathered the information necessary to establish meaningful goals and targets in the next phase.

M Target Goals Lean Rule of Thumb 60/40 Rule • Do not try to do it all at once! • Make your goal realistic and achievable. • When in doubt, aim for about 60% of the ideal. • Remember that Lean is an iterative process.

M Target Goals Correct Course Improve Verify