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Chapter 1: Introduction to Benchmarking on internal business processes of an organization. Often, key aspects of industrial processes were measured and compared with those of other firms to speed up and improve the efficiency of production--for example, by increasing productivity of workers and reducing manufacturing defects. By the early 1980s, benchmarking turned its focus outside of organizations. Firms such as Xerox, IBM, and Motorola were routinely benchmarking their performance against other firms in order to gain competitive and strategic advantage. By 1990, it was recognized that benchmarking provides the greatest benefits when it focuses on the customers of an organization. Ultimately, the health--and often the survival--of an organization depends on the satisfaction and value customers receive from an organization's products and services. Today, management of road maintenance is undergoing a similar transformation from being internally focused on production and resource usage to being externally focused and satisfying customers' needs and desires. WHAT IS CUSTOMER-DRIVEN BENCHMARKING? Customer-driven benchmarking is a management process to achieve continuous improvement that will eventually delight the customer. Customer-driven benchmarking involves assessing, adopting, and improving upon "best" practices that have been shown through measurement to lead to higher levels of performance--better products and services to customers. These better performances are achieved with the same or fewer resources and are applicable to a particular environmental setting. The central ideas in customer-driven benchmarking are the following: It is a type of continuous quality improvement. You do not do customer-driven benchmarking once and then you are done. By improving continuously, you will not merely exceed your current levels of performance or the performance level of others--you will eventually exceed customer 8

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expectations. As a result, your customers will be loyal supporters of your maintenance program and commend your accomplishments to other citizens and elected officials. Customer-driven benchmarking involves thinking more in terms of the attributes of products and services that customers of maintenance are buying, such as smooth and comfortable roads and attractive roadsides. The focus will not be on maintenance activities such as pothole patching, ditch cleaning, and sign repair, nor will it be on outputs or production rates such as number of potholes filled or linear feet of ditches cleaned. Central to customer-driven benchmarking is measuring the outcomes of maintenance that are important to customers. Outcomes include customer satisfaction and the conditions that result from providing maintenance products and services. Best performances reflect the best customer outcomes relative to the resources used, given a quantity of work performed and a set of environmental conditions such as weather, terrain, and traffic. Customer-driven benchmarking involves comparing performances of different organizational units--internal, external, or both--that operate under similar environmental conditions such as weather, terrain, and traffic. It entails identifying best practices associated with best performers and then implementing practices that lead to equal or better performances. Figure 2 offers another way of thinking about customer-driven benchmarking by making the role of the customer more explicit. You determine customer preferences, expectations, and satisfaction by surveying them. You measure the attributes of the roads that customers care about--for example, smoothness of roads and legibility of signs. You identify practices that best serve customers based on the measured performance of a group of peers. Finally, you adopt improved practices and adjust your maintenance program accordingly. Implicitly, the customer drives the mix of activities that make up the maintenance program. 9