Benchmarking and Lean Six Sigma Management Approaches - Case Study Example

Benchmarking and Lean Six Sigma Management Approaches Student’s name Institutional Affiliation Introduction In the modern business arena, management tools have become essential for they help managers to scale the organizational performance. Benchmarking is one of the managerial tools that help managers to improve the organizational performance by scaling, identifying and applying various business models and practices for effective and efficient firm operations (Sarialtin, 2015). Additionally, Benchmarking is a valuable management tool that allows the manager to compare the performance of the company about sales within an industry (Franco and Ernesto, 2016). In this aspect, organizational executives compare the company's products to those of the competitors as well as with other internal firms. In other words, the primary purpose and objectives of benchmarking are to help the company gain superior performance by improving internal production processes to understand the external environment of the business (Bowerman et al., 2014). From this perspective, it is important for current businesses to integrate, tailor and incorporate best managerial practices through innovation, and without imitating their competitors. Lean Six Sigma is another important administrative tool that scales organizational performance and operational practices for continuous improvement. Lean Six Sigma constitutes two management methodologies: Lean and Six Sigma methodologies (Subramoniam et al., 2012). The primary objective of having the Lean methodology in management is to eliminate waste during the manufacturing process, storage and distribution of the products within the company ( Bhamu, and Singh Sangwan, 2014). In other words, Lean methodology stimulates organizational managers to focus and consider customers' value. In this aspect, managers carry out analysis concerning the market demands, and hence, working on products in alignment with clients needs. Six Sigma methodologies is an essential management tool that helps organizational managers to eliminate process variation basing on consumers' demand for product quality. Measuring process performance and adopting process change are primary activities that determine the effectiveness of Six Sigma methodology. Therefore, combining Lean and Six Sigma methodology is of great importance for it helps the company to manufacture and deliver quality services to their clients on time; producing quality goods in manageable costs with minimal waste. This paper demonstrates how companies use both Benchmarking and Lean Six Sigma methodologies to facilitate change in business processes to enhance and sustain their competitive advantage. The paper pools together various theoretical frameworks discussing the management tools that help the company to improve performance and quality production at the minimal waste with manageable production costs. Benchmarking Concepts Poveda and Elbarkouky (2016) define Benchmarking is an analytical process that involves a series of managerial activities that aims to identify the best practice that will lead to superior organizational performance. Benchmarking allows managers to monitor and leads to continuous improvement in production and complete corporate performance. In his study Huggins (2010) found that Benchmarking is the best methodology for both small and big business for it helps a firm to thrive and perform best in the midst of competitors. Additionally, Benchmarking is involved rigorous and strategies course of activities and actions for measuring and scaling business operations within an industry in improving performance (Martinez‐Moyano and Richardson, 2013). Organizations compare their activities of activities with their rivals within the industry. Therefore, Benchmarking allows managers to gather relevant information in the market that benefits the entire organizational performance. For instance, Incubation of new technologies in the business arena has become one of the major Benchmarking drivers for it brings various companies within an industry to compare their innovative productions. Today, benchmarking is one of the major tools that global organizations have been using to establish and monitor total quality management. More importantly, Benchmarking brings together companies, and in turn, they exchange ideas on how to improve their production and tools to use to mitigate final costs of production (Björklund, 2014). There are three main platforms of Benchmarking: process Benchmarking, Product Benchmarking and Strategic Benchmarking. Process Benchmarking involves comparing two or more companies on how they manage particular production process and work practices. Process Benchmarking is commonly used by manufacturing and construction companies for it includes site visitation, and to collect data. Strategic Benchmarking involves comparing managerial practices between or among organizations within an industry: measuring and comparing organizational structures. Multinational companies operating in various geographical locations carry out strategic Benchmarking to improve employees' performance and determine the future of the enterprise. Product Benchmarking is the most sensitive measuring and comparison activity within among companies within an industry. According to Huggins (2010), Benchmarking allows managers to identify organizational challenges and weaknesses and how to face and improve them. In other words, Benchmarking help managers to find and fill the performance gaps within the organization (Björklund, 2014). Lean Six-Sigma Methodology According to Drohomeretski et al. (2014) today Lean Six Sigma is the most successful business approach for it helps the company to have continuous improvements. The advantageous factor of the Lean Six Sigma approach is that it applies to all industries and in all departments (supply chain and warehouses). As stated above Lean Six-Sigma methodology constitutes the combination of two approaches, Lean and Six Sigma. Lean involves improvement of the assembly methods by reducing production time and provides quality products to clients at minimal waste. Waste constitutes all kinds of non-value adding activities including production processes that might delay the customers from getting quality products on time. Lean is an approach that production organizations apply to take away non-adding value activities in the firm. Taking away non-add value activities increases the companies production performance, and it shortens the time required to deliver goods and services to customers and reduces production cost. Six-sigma approach involves assembling and refining quality production of goods and services by manufacturing products that clients demands in the various market segment (Venanzi, and Laporta, 2015). Therefore, a combination of lean and six sigma approaches help the companies to build and gain competition advantage. Several studies indicate that companies using the Lean Six-sigma approach are more successful than using a single method (Lean or six sigma). Global companies must come up with new ways of improving organizational production process to survive in the current fast-paced and competitive market (Drohomeretski et al., 2014). Continuous production of quality products that meets customers’ demands and delivering them on time is the key and important strategy in any company operating in contemporary markets. According to Martínez-Jurado et al., (2014) quality production and reduction of waste is the most successful device that helps the organization to dominate the markets where competition is very high. Lean Six Sigma is a managerial tool that helps the managers to build the best practices within an organization to reduce production costs at the minimal waste and the creation of customers' value. According to Keskin et al., (2013) Lean Six Sigma is a process of building organizational production knowledge, develop best business models and develop operational improvement tools for quality production. In his study, Besseris (2014) found that Lean Six Sigma is the most effective and efficient operational method for it allows managers to deal with product quality issues, time management, and improvement in production cost and offer the greatest opportunity in the utilization of capital. The principal of Lean Six Sigma focuses much on providing clients with quality products; meeting customers’ needs. Benchmarking and Lean 6 -Sigma in business process change According to Anderson and McAdam (2016), business process change is a systematic approach to developing and building activities that make the company adapt to ever-changing business environments. Benchmarking and Lean Six Sigma methods are tools that help managers to establish and develop techniques of business change processes. There are three types of benchmarking used among the industries: internal, best practice and competitive benchmarking. Internal benchmarking is an internal activity that brings together all departments within an organization. Internal benchmarking is of great importance especially when the company is strategizing to embrace process change (Panat et al., 2014). The internal analysis allows employees to develop organizational production culture, build governing structures and performance comparison of various departments. Best practice benchmarking involves analyzing the companies' practices and comparing them and hence sieving the best practices that will add value to company's operation. Competitive benchmarking is an external activity that brings together firms within an industry to compare their production and operational techniques. Competitive benchmarking help businesses to build technologies that will change companies operations to gain competitive advantage. On the other hand, lean six-sigma allows the company to embrace change by developing new ways of eliminating waste across all departments, production of quality products at reduced costs, and present goods and services that satisfy customers (Björklund, 2014). Therefore, combing benchmarking and lean six-sigma in business process change is of great importance specifically in process cost reduction, eliminating waste in production, improving product cycle, delivering goods and services on time and a better understanding of the market structure. Modern companies are developing new patterns of production in the attempt of improving and organizational performance to gain competitive advantage (Bowerman et al., 2014). The underpinning factor is that most of the companies fail to compile with benchmarking and lean six sigma approaches because they are time-consuming and expensive to implement. How have organizations used one or both to improve their processes? Global companies use benchmarking for three purposes: to improve performance, manage the cost of production, gain strategic advantage and develop and build organizational learning. Both multinational and local companies use benchmarking to identify and develop new production methods, which are useful and efficient (Bhamu and Singh, 2014). A case study of Apple benchmarking on its new iPhone has been under the lens of the competitors. The opponents criticize Apple Company for its products high prices, little RAM and slow processor Apple (Apple Annual Report, 2015). In this aspect, the company can improve its products quality and slash the market prices. Benchmarking allows the company to identify and understand relative cost production and continuous production improvement. From this perspective, Apple Company executives must come up with new metrics on developing and improving its devices to regain and retain competitive advantage. Gaining strategic advantage helps companies to stay ahead of the close rivals. Apple strategic position helps the company to stay ahead of competitors at least two years) through continuous innovation of new gadgets. Moreover, benchmarking help the company to generate new production ideas and development of production infrastructures. Through benchmarking process, Apple has been investing time and resources heavily in the development of new products that fits the current market segments. Lean Sigma Six approaches are the most effective approach that helps multinational companies to improve the production process. Total quality management within an organization results from the proper implementation of lean sigma six for it involves elimination of waste and quality production enhancement. Apple Inc. has the lean six-sigma approach that constitutes three Chinese principles: Shin, Guanxi (relationship) and Zhi (customers) (Apple Annual Report, 2015). In modern times, customers no longer focus on the prices of the commodities in the market but the quality of the product and their level of satisfaction. Apple is committed to offering a quality product to its customers by eliminating non-adding value activities within the organization and continuous development of new products. The relationship is the Apples central concept that helps the team to optimize value stream. The relationship of the Apple covers all stakeholders including customers, suppliers, employees, community and the competitors (Grant, Wise, 2016). Building a strong relationship with their clients' allows the company to develop goods and services that meet the consumers' needs. Finally, the lean six-sigma approach helps the company to create and build customers' value. The designs of Apple products align with the customers’ demands. The company carries out continuous customers’ analysis to manufacturing products that meet clients' requirements. Conclusion Today, stiff competition, increasing customers’ demands and development of new technologies are primary drivers that stimulate companies to build and develop new management tools to retain and gain competitive advantage. Benchmarking and lean six-sigma are two major approaches that new businesses are using to build and develop competitive strategies. Benchmarking involves comparing organizational practices either internally or externally to improve the performance. Lean six sigma approach help the managers to improve organizational operations to eliminate waste, build product quality and continuous development of new products through innovation. Therefore, benchmarking and lean six sigma approaches are the most effective and efficient tools that small, medium and big should adapt to gain competitive advantage. References Anderson, K. and McAdam, R., 2016. Reconceptualising benchmarking development in UK organisations: the effects of size and sector. 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