Benchmarking Outside The Box

Benchmarking Outside The Box

Best practices can rise from where you least expect them. Many manufacturers are learning more about their operations by studying companies outside their industry.

My own business always bores me to death; I prefer other people's."

While Oscar Wilde wasn't talking about business in the sense of companies, he does make a good point. Other people's businesses can be more interesting because they're not what we are used to doing. And it provides an opportunity to get the creative juices flowing about what your own company could achieve.

In fact, it's the reason smart manufacturers benchmark -- to see what other companies are doing and to emulate or avoid the practices they observe.

There are myriad examples of benchmarking outside the box. Mercedes-Benz High Performance Engines Ltd., which provides engines for Formula One racecars, uses real-time information to reduce inventory costs, increase output from engineering and operations, and streamline processes. It benchmarks its performance outside of the automotive industry.

Another classic example, office products manufacturer Xerox Corp. was dissatisfied with its fill-order rate, so it benchmarked L.L. Bean, a clothing store catalogue retailer.

"In fact, L.L. Bean was three times as proficient as Xerox in moving requested items from inventory to the customer," according to "Benchmarking Best Practices," a report from the Government of Alberta, Canada. "A fact-finding team from Xerox visited L.L. Bean's facility and found out why. The secret to the cataloger's success was an inventory system organized not simply by general categories but by frequency of sales. Under that system, the most-frequently ordered items were also the ones most accessible."

According to the 2006 IndustryWeek Best Plants statistical profile, IW Best Plants winners and runners-up average 6.5 benchmarking studies per year. Some manufacturing facilities benchmark in excess of 20 studies per year. While much of the benchmarking efforts are within the same industries, there are many who have learned to think outside the box.

Caskets And Tractors

What does a funeral casket manufacturer have in common with a farm equipment maker? More than you'd think, according to Mary Jo Cartwright, director of manufacturing operations at Batesville Casket Co.'s Manchester, Tenn., plant. While on a tour of a John Deere plant, Cartwright noticed the company's use of visual management screens, which she describes as "Taco Bell screens." At the time there wasn't an immediate need for the screens, but Cartwright filed away the information just in case.

Batesville Casket's Manchester plant applies best practices used by farm equipment and wheelchair manufacturers.

Eventually there was a need, and today Batesville's Manchester facility uses what it calls a visual link system.

"There is a unit in front of the operators," Cartwright explains, "and on the screen it will tell them what the build is -- how to make that casket."

She points out that her facility used to do more batch work, so there would be several of the same kind of caskets being built at once. Batesville has now moved into mixed models. The screens help operators know exactly what to build.

For Batesville Casket, a recipient of the 2004 IndustryWeek Best Plant honor for its Manchester plant as well as a 2006 honor for its Batesville, Ind., facility, benchmarking is an important part of the culture. Not only does the company benchmark itself against other companies, it hosts tours for other companies to learn best practices from a casket maker.

"We are proud of what we do, and we commit to sharing best practices," Cartwright says.

How To Benchmark

Each year IndustryWeek hosts its IW Best Plants conference to honor Best Plants winners and educate others on what it takes to be a world-class facility. The conference features plant tours at area plants. The tours feature various industries and there is limited space for tour attendees. That means there is a chance attendees may not be able to tour a facility that most closely resembles what they do at their plants.

Occasionally, there is grumbling that the ABC tour is booked and attendees have to go to the XYZ factory instead. "What could we possibly learn from XYZ when we make ABC?" they lament. Inevitably, though, these folks end up learning just as much, if not more, from another industry's best practices as they might have from a direct competitor.

For Scotsman Ice Systems, Fairfax, S.C., (an IW Best Plants winner in 2006) representatives benchmarked several manufacturers' information technology applications. Although manufacturers that Scotsman visited had similar IT requirements, they weren't all in the same industry (Scotsman produces ice-making units and refrigerators). The result: Scotsman was able to learn from others' successes, failures and challenges.

To aid benchmarking efforts, the company even created a benchmarking book that contains questions that need to be addressed during a benchmarking event.

Give And Take

While manufacturers generally open their factory doors in a spirit of allowing others to learn, sometimes the benchmarkee can become the benchmarker.

Sometimes, Cartwright notes, visitors to a Batesville plant will ask a simple question, and "it makes me think about it in a more thoughtful way. There isn't a time when I don't take something from them. I ask them: 'What areas of opportunity did you see for us? Is there something that you do that you think could apply to us?' We live in it every day, so we can walk by it and never see it."

Cartwright also stresses how important it is for Batesville to visit other plants. Her advice is to figure out weaknesses and visit plants that are strong in those areas. In doing so, she has applied many best practices to her own facility from those tours.

One such tour was of Sunrise Medical, a wheelchair manufacturer located in Avon Lake, Ohio.

"It was an industry that was definitely struggling with foreign competition [as is Batesville]. We brought back and applied a lot of their ideas on poka yoke. They kept it simple; it wasn't fancy."

Another benchmarking tip Cartwright offers is: Don't be afraid to ask questions.

"Most times people go through the motions of a plant tour and don't really get engaged. I think people are overwhelmed in industries they are not familiar with." She suggests that rather than feeling overwhelmed by trying to take in everything, to instead ask specific questions about why things are done. You never know where you'll get a good idea.

On the flip side, she also cautions: Don't go into a benchmarking tour believing you have all the answers.

A lot of times people will come through the Batesville Manchester facility and assume they're already doing things better, Cartwright says. "It's almost like they can't gain anything from it. I'm kind of strange -- I can go into any plant and learn something from them. Every plant -- no matter what they do or how big they are -- I guarantee there is some idea in there that I can either take or can build on."

Management Practices
Benchmarking studies conducted in the past year

Year Median Mean Minimum Maximum
2002 4.0 7.3 0 49
2003 6.0 7.1 0 25
2004 6.0 7.2 1 26
2005 3.5 5.0 0 20
2006 5.0 5.7 1 20
2002-2006 4.0 6.5 0 49

Source: IndustryWeek's Best Plants 2006 Statistical Profile

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