Best Practice of Benchmarking in the Aerospace Industry

The business environment has evolved dramatically over recent decades, which has caused almost every aspect of an organisations management practices to change accordingly (Anderson and McAdam, 2004). Successful companies in every industry engage in a range of practices, with the objective of achieving high levels in performance and in the pursuit of business excellence (Ahmed and Rafiq, 1998). This has lead to the emergence of Benchmarking as a methodology for continuous improvements and gaining a competitive advantage (Anand and Kodali, 2008).

The purpose of this assignment is to critically reflect on the application of best practice of Benchmarking within the aerospace industry. The assignment will report on current research surrounding the area of Benchmarking and will evaluate the level of maturity of Benchmarking practices within aerospace engineering. The assignment will conclude by considering limitations and providing recommendations for future research.

Industry

The area of engineering can be described as an art, discipline and profession which involve applying knowledge to solve problems that safely realize improvements to the lives of individuals (EngineeringExpo, 2011). According to Native Access (2011), Engineering can be grouped into the following main area: civil engineering; chemical engineering; electrical engineering; mechanical engineering; and engineering sciences. This report will will examine aerospace engineering which is a branch of mechanical engineering with particular consideration to aerospace design and manufacturing.

Aerospace engineering involves the design and production of aircrafts, spacecrafts, aerospace equipment, satellites and missiles (Native Access, 2011). It can be broken down into two main overlapping areas: aeronautical engineering, which deals with crafts that stay within the Earth’s atmosphere; and astronautical engineering, which deals with crafts that operate outside the Earth’s atmosphere(EngineeringExpo, 2011). The reports will examine both areas of aerospace engineering in relation to best practices in Benchmarking.

Literature Review

According to Asrofah et al., (2010), benchmarking is the process of identifying “best practices” in relation to both products and the processes by which those products are created and delivered. Hence, the objective of benchmarking is to understand and evaluate the current position of an organisation in relation to “best practices” and to identify areas and means of performance improvement (Asrofah et al., 2010). Maire et al., (2005) suggest that the identification of “best practices” can be found inside a particular industry or evident in other industries. Anderson and McAdam (2004) provide an alternative definition and defines benchmarking as a continuous, systematic process for evaluating the products, services and work processes of an organisation that are recognised as representing “best practices”, for the purpose of organisational improvement. Regardless of the definition examined, benchmarking can be regarded as the tools that can support management in their pursuit of continuous improvement (Chen, 2002).

Benchmarking is a vital component of any Total Quality Management (TQM) initiative and was first practiced in Japan as a means of ‘striving for the best of the best’ (Bank, 2000). The Xerox Corporation is known as one of the first Western firms to adopt this approach in 1979, with the objective of reducing its production cost of a photo copier to better compete with rival firm Canon (Asrofah et al., 2010). In the case of Xerox, benchmarking enabled the organisation to gauge how well they were performing against Canon who appeared to be undertaking similar activities but at a lower cost (Oakland, 2003). Hence, gaining such an understanding enabled Xerox to redesign their processes and ultimately reduce their production cost (Bank, 2000). Thus, allowing them to regain their competitive power (Stapenhurst, 2009).

Chen (2002) states that benchmarking has become a competitive technique adopted by many companies such as IBM, 3M, DuPont and Motorola hoping to minimise unit costs and product defects so as to improve productivity and better meet customer expectations. Thus, it would appear that benchmarking is a valuable tool for creating and sustaining a competitive advantage (Stapenhurst, 2009). However, such examples consider benchmarking from a manufacturing perspective and fail to incorporate other business functions such as logistics, customer service, sales and marketing (Asrofah et al., 2010). Therefore, it would be recommended that future empirical research is conducted covering other business functions relating to the application of benchmarking.

Anderson and McAdam (2004) argue that benchmarking provides a clear signal of success or failure and that it has grown as one of the most popular tools of business management in the competitive arena since the early 1990s. Asrofah et al., (2010) supports this argument and states that the popularity of benchmarking has grown considerably during the last five years. Recent research shows that the adoption of benchmarking practices within UK firms range between 60 and 78 per cent (Anderson and McAdam, 2004). In contrast, a study among key US industry sectors found that only 31 per cent of businesses benchmarked their products and services regularly (Ahmed and Rafiq, 1998). Therefore, it would be fair to suggest that the adoption of benchmarking practices is fragmented and that there appears to be lack international recognition (Asrofah et al., 2010). Maire et al., (2005) supports this view and states that in spite of its success, benchmarking does not always achieve unanimity among those who have to select progress approaches in their company. Figure 1 illustrates the evolution of benchmarking and its distinct generations of development.

Figure 1: The evolution of benchmarking

The figure suggests that strategic and global benchmarking are relatively new approaches. Ahmed and Rafiq (1998) support this idea and state that these approaches, to a large extent, are aspirations for the future. Therefore, these are potential areas of benchmarking which could be examined in greater detail.

Oakland (2003) suggests that a number of internal and external drivers have influenced the growth of benchmarking. Internally refers to self-assessment results which provide opportunities to learn from adapting best practices; the introduction of new technologies and changes in processes; and targets that require improvements in business performance (Oakland, 2003). Externally refers to fierce competition where competitors are constantly trying to get ahead and steal markets; customers continually demanding better quality, lower prices and shorter lead times, etc; and legislation where changes in the law places greater pressure for improvements (Oakland, 2003). Therefore, it can be suggested that benchmarking should not be considered as a reflex action but rather organisations must approach benchmarking proactively to ensure continuous learning relating to improving business activity, processes and management practices (Bank, 2000).

According to Asrofah et al. (2010), the process of benchmarking has many defining features such as: it must be purposeful, objective, measurement based, information intensive and action generating. Asrofah et al. (2010), argue that benchmarking should have sincere intentions and should not be done merely for the sake of an organisations image. Therefore, if not approached correctly it can result in a waste of financial and human resources, wasted time and ultimately it may tarnish company’s image (Asrofah et al., 2010).

Benchmarking can be categorised into a number of different approaches (Oakland, 2003; Bank, 2000; Stapenhurst, 2009). Ahmed and Rafiq (1998) identify a variety of benchmarking approaches which are illustrated in table 1.

Benchmarking Types

Feature

Internal

Involves the measurement and comparison of activities, functions and processes within an organisation

External

Involves the comparison of similar operations, systems and processes with other organisations

Competitive

Where comparisons are made between similar functions, activities with direct competitors

Industry

Where comparisons are made with a group larger than direct competitors

Generic

Where comparisons are not restricted to any one industry or market

Process

Involves comparisons between discrete work processes and systems

Performance

Involves comparisons and scrutiny of performance attributes such as price time to market and robustness etc

Strategic

Involves benchmarking at a higher level than operational. It seeks to address strategic or process issues

Table 1: Types of benchmarking

It is clear from the table that there are numerous formats of benchmarking. It is recommended that an organisation examines all benchmarking approaches before deciding on a single solution to a benchmarking initiative (Lee et al., 2006).

Asrofah et al. (2010), identify the following benefits of benchmarking: it allows an organisation to gain a better understanding of strengths and weaknesses of processes; improves cycle time; improves supplier management; reduces production costs; and it allows for new methods, ideas and tools to improve a company’s effectiveness in solving problems. Oakland (2003) highlights further benefits to benchmarking which include: highlighting sensitivity to changing customer needs; it encourages innovation; allows for developing realistic stretch goals; and allows for establishing realistic action plans. However despite these apparent benefits, it is also argued that there is a lack of understanding regarding benchmarking and that not all organisations find it easy to deploy the tools effectively (Asrofah et al., 2010). Lee et al., (2006) supports this argument and highlights the following limitations: it requires significant commitment of resources in terms of people, money and time without any guarantee that it will bring cost benefits; often companies chose not to benchmark due to a lack of time and resources; failure to link benchmarking to a firms competitive priorities; difficulty in finding suitable partners to benchmark against; a lack of understanding of the concept and the difficulty to benchmark against tacit factors such as services and skills.

The success in benchmarking can be measured by the extent to which practitioners of benchmarking have attained their objectives, justified costs by the benefits attained from benchmarking and their perception of the overall success of the process (Asrofah et al., 2010). Therefore, any company contemplating its use must first be aware of its advantages and potential limitations (Dervitsiotis, 2000). In doing so, practitioners will be able to gain a comprehensive understanding of benchmarking which will enable them to initiate an effective approach to business improvements (Asrofah et al., 2010). Thus, allowing for striving towards performance excellence and ultimately minimising the potential pitfalls of benchmarking (Lee et al., 2006).

Ahmed and Rafiq (1998) argue that firms need to adopt an integrated approach to benchmarking as the only way to climb the mountain of sustained improvement. They examine a number of common frameworks, assess their role in benchmarking, and examine ways they may fit together in an integrated fashion to build a holistic approach to benchmarking. The frameworks discussed include: EFQM Business Excellence Model; Balance Scorecard; Service Quality (SERVQUAL) framework; Gap Analysis techniques; and Analytic Hierarchy Process (AHP) technique. The findings of their study suggests that to continuously improve and create business excellence it is necessary not to utilise any single one tool but rather to employ a range of techniques to address different sets or sub-areas for improvements (Ahmed and Rafiq, 1998). They also state that it is important that each technique is used appropriately, in a manner which maximises the strengths of the application and mitigates its weaknesses. Therefore, it is fair to suggest that an integrated approach to benchmarking can be regarded as an important source to fuel continuous improvements.

Lee et al., (2006) provide additional research to support the adoption of benchmarking and suggest that a number of factors are influential in its successful application. The factors examined include: Top management commitment; internal assessment; employee participation; role of quality department; and customer orientation. The research conducted by Lee et al., (2006), was based on a cross industry analysis with the purpose of providing a guideline to organisations with little or no experience in adopting benchmarking for improvement. The findings of their study suggested that there is a relationship between industry and benchmarking adoption as a strategic tool for process assessment and continuous improvements (Lee et al., 2006). Hence, they recommend applying their study to other industry sectors in order to improve productivity, enhance learning and growth potential. Therefore, it can be suggested that their research should be extended to the aerospace industry, as it provides a foundation for organisations with little or no experience in adopting benchmarking to understand techniques which will allow for its successful application.

Industry Application

The aerospace industry represents a key strategic sector for most nations, as it is viewed as a symbol of competency and pride, an incubator of advanced technologies, a generator of highly specialised jobs and, most of all, an engine of growth and wealth (Lefebvre and Lefebvre, 1997). As a result of this, the industry is faced with fierce and rapidly changing competition worldwide where powerful new players are emerging and the growth within industrialised nations such as China, Brazil, Japan, India, Korea, Indonesia and Singapore are causing a great deal of uncertainty (Lefebvre et al., 2004). Therefore in such dynamic business environment, aerospace operators must focus on their core competencies which will enable them to undertake more complicated task and ultimately gain a competitive advantage (Lefebvre and Lefebvre, 1997).

Asrofah et al. (2010), states that the practice of benchmarking is often used by organisations striving towards Total Quality Management (TQM), seeking ISO certification (ISO9000) and for strategic planning. Wilson (2005) supports this view and discusses benchmarking as a tool for achieving industry standard certification, particularly highlighting its application within the aerospace industry against other industry standards. The research conducted in the area of benchmarking regarding the aerospace industry has shown that the tools of benchmarking are yet to mature within the industry sector. There are various academic studies surrounding benchmarking; however, there is shortage of empirical studies relating to benchmarking within the aerospace industry and evidence supporting its application practically (Taylor, 2006).

Chao et al., (2004), discuss benchmarking from a process perspective and highlight its application within NASA for design and new product development. The objective of their paper was to identify best practices and lessons learned by NASA’s design and review experiences, through benchmarking the activities of NASA against other industry techniques, which would lead to developing strategies to improving current processes (Chao et al., 2004). The results of their study showed that success in new product development for NASA was not solely dependent on efficiency but rather safety played a major role, which was followed closely by reliability, quality and costs (Chao et al., 2004).

Kurtoglu et al., (2009) provides another example of benchmarking within the industry and highlights its application on diagnostic technologies for electrical power systems. Their study was based on developing a formal framework for benchmarking of diagnostic technologies which would provide a systematic, empirical basis for testing diagnostic software and would also be beneficial for providing performance assessments for different diagnostic programs (Kurtoglu et al., 2009). Similar to the study of Chao et al., (2004), they approached benchmarking from an internal process and highly technical perspective with the aim of developing strategies to support other practitioners in defining new ways of improving processes. The limitations to their studies were that: a high degree of previous knowledge was required to fully comprehend the various concepts and frameworks discussed; and their studies focused strongly on the activities of NASA and failed to discuss other partners in much detail, which limited the possibility of a broader understanding.

Schwartz and Bold (2000) provide a more comprehensive industry analysis in their study of technology planning in a changing environment. The purpose of their study was to discover and pull together the best and most appropriate practices of technology development, in order to develop a robust management process for NASA (Schwartz and Bold, 2000). Their study was based on interview questions to a selection of companies similar to NASA in terms of size, structure and interest. The companies included United Technologies, Gillette, Delphi Automotive, General Electric, AT&T, Hughes Electronics, and ABB. The interview questions were focused on all aspects of technical resources management in terms of level of effort and organisation management needs assessment, technology reviews, finding allocation, program monitoring and maintenance, and technology transfer (Schwartz and Bold, 2000). The results of their research highlighted the difficulties of building and managing technology investment portfolios. Hence, they concluded that no one process was right for every organisation (Schwartz and Bold, 2000). They plan to develop future benchmarking studies with other ‘NASA-like’ companies such as 3M and Honeywell.

Lefebvre et al., (2004), provide another practical example of benchmarking within the aerospace industry. The focus of their study was on the critical capabilities of manufacturing subcontracting firms in the aerospace industry. Lefebvre et al., (2004), highlight the importance of strategic benchmarking for identifying the critical capabilities of best manufacturing subcontractors within the industry. The study was based on a large scale survey which was carried out in three widely different countries with respect their aerospace subcontracting base, which included the USA, Canada and the UK (Lefebvre et al., 2004). The results of their study suggested that, cultural factors and business practices are linking closer together with increased globalisation; however, there were still some clear distinctions between the various countries in terms of critical capabilities (Lefebvre et al., 2004). Therefore, their study provides a useful assessment of subcontracting for the aerospace industry where competitive excellence is said to be an increasing standard subject to worldwide competitive pressure (Lefebvre et al., 2004).

Benchmarking Best Practices

Benchmarking is said to be growing in popularity within the aerospace industry (Schwartz and Bold, 2000). According to EngineeringExpo (2011), Exmac Automation (a leading supplier of automated materials handling equipment), has recently discussed the benefits of transferring automotive assembly process technologies into the aerospace industry. EngineeringExpo (2011), states that Exmac Automation has completed several engine handling projects for large companies such as Rolls-Royce, Jaguar, Aston Martin and Land Rover; and can certainly help aerospace operators better understand how automotive systems operate and highlight the similarities between automotive assembly and engine aircraft assembly. Hence, they suggest conducting various benchmarking exercises to determine best ways to move engines and to improve processes and platform layouts (EngineeringExpo, 2011). Therefore, gaining such an understanding will enable aerospace operator measure and improve the current abilities against “best practices” from other industry sectors.

Boeing

According to SupplyChainBrain (2008), Boeing has incorporated benchmarking best practice strategies not only within their processes but into all their business interest. They discuss aspects of Boeings 25 years of benchmarking experience from its initial conception by a team of specialist investigating strategies for achieving business excellence to its growth and companywide adoption through corporate leadership and management endorsement. According to SupplyChainBrain (2008), Boeing has benefited from having a dedicated central benchmarking group that act as a vechel for sharing internal information across the enterprise which is said to have resulted in tremendous success for the company and has enabled them to maintain the lead position of the aviation industry for 40 years.

BAE Systems

BAE Systems is another aerospace player who has used benchmarking as a tool for improving their internal business activities. According their Corporate Responsibility Review (2008), they used benchmarking as a vehicle to reduce the number of days lost due to work related injuries by improving the safety, health and working environment for their employees. Accordingly, they managed to reduce the gap between 2007 company performance and external benchmarks by 10% in 2008. Hence, they managed to achieve their performance objectives and plan to continue to perform at a consistently higher level than the industry average year-on-year (Corporate Responsibility Review, 2008).

Conclusion

The methodology of benchmarking can be regards as a strategic tool that can support management in their pursuit of continuous improvement and business excellence (Chen, 2002). It is fair to suggest that benchmarking can assist an organisation in understanding their current position in terms of strengths and weaknesses, and has the potential to enable a firm to develop strategies to ensure learning, innovation and business improvements. Despite its potential, the research conducted into the topic area has shown that its application has been relatively fragmented and is lacking in terms of international recognition. Additionally, there appears to be a shortage of empirical evidence to support the potential benefits an organisation can achieve by initiating a benchmarking programme.

The aerospace industry represents a growing and highly competitive market, which can be argued, would benefit greatly from the application of a benchmarking programme. Despite this, the research conducted suggests that there is a general lack of understanding in terms of the application and the concepts behind benchmarking within the industry. Therefore, it would be fair to suggest that benchmarking is at an embryonic state of maturity within the industry as a whole. Aerospace operators should consider the examples or “best practices” of key industry players such as NASA, Boeing and BAE System as benchmarks for the successful application of a benchmarking programme. Doing so, will arguably heighten the aerospace competitive marketplace and will develop an environment based on continuous improvement and business excellence.

Therefore in conclusion, it is recommended that future empirical study is conducted in the area of benchmarking, with particular consideration of its application to the aerospace industry. Such studies will enable firms to understand and realise the potential benefits of a benchmarking initiative and will also allow established industry players to not only sustain a competitive advantage but develop competencies and new ways of performing business activities. Thus, creating a superior competitive advantage and forcing other industry players to adopt a similar philosophy in order to continue competing within the industry sector.

References

Ahmed, P. K., & Rafiq, M., 1998. Integrated Benchmarking: A Holistic Examination of Select Techniques for Benchmarking Analysis. Benchmarking for Quality Management & Technology. Vol 5, (3), pp. 225-242

Anderson, K., & McAdam, R., 2004. A Critique of Benchmarking and Performance Measurement Lead or Lag? Benchmarking: An International Journal. Vol 11, (5), pp. 465-483

Asrofah, T., Zailani S., & Fernando, Y., 2010. Best Practices for the Effectiveness of Benchmarking in the Indonesian Manufacturing Companies. Benchmarking. Vol 17, (1), pp. 115-143

BAE Systems (2008) Corporate Responsibility Review[Online] Available from World Wide Web: http://production.investis.com/annualreport07/performance/corprespons/objectives/ [accessed 12 April, 2011]

Bank, J., 2000. The Essence of Total Quality Management. 2nd ed. London: Pearson Education

Chao,L. P., Tumer, I & Ishii, K., 2004. Design Process Error Proofing: Benchmarking for NASA Development Life-Cycle. Benchmarking. Vol 4, (14), pp. 1-10

Chen, H., 2002. Benchmarking and Quality Improvements: Quality Benchmarking Deployment Approach. The International Journal of Quality & Reliability Management. Vol 19. (7), pp. 757-773

Dervitsiotis, K. N., 2000. Benchmarking and Business Paradigm shifts. Total Quality Management. Vol. 11, (4-6), pp. 641-646

EngineeringExpo (2011) Virtual Exhibition for the Engineering Industry [Online] Available from World Wide Web: http://www.engineeringexpo.net/news/n0030.html [accessed 12 April, 2011]

Kurtoglu, T., Jensen, D., & Poll, S., 2009. Systematic Benchmarking for Diagnostic Technologies for an Electrical Power System. Benchmarking. Vol 4, (12), pp. 1-8

Lee, Y. P., Zailani, S & Soh, K. L., 2006. Understanding Factors for Benchmarking Adoption: New Evidence from Malaysia. Benchmarking: An International Journal. Vol 13, (5), pp. 548-565

Lefebvre, E., & Lefebvre, L. A., 1997. Global Strategic Benchmarking, Critical Capabilities and Performance of Aerospace Subcontractors. Benchmarking. Vol 1, (1), pp. 1-19

Lefebvre, L. A., Lefebvre, E., & Harvey, J., 2004. Strategic Capabilities in the Aerospace Industry: A Three-Country Perspective. Benchmarking. Vol 1, (1), pp. 975-978

Maire, J., Bronet, V., & Pillet, M., 2005. A Typology of “Best Practices” for a Benchmarking Process. Benchmarking. Vol 12, (1), pp. 45-60

Native Access (2011) Resources for Engineering [Online] Available from World Wide Web: http://www.nativeaccess.com/types/index.html [accessed 12 April, 2011]

Oakland, J. S., 2003. Total Quality Management: Text with Cases. 3rd ed. London: Butterworth-Heinemann

Schwartz, P. C., & Bold, M. M., 2000. Technology Planning in a Changing Environment. Benchmarking. Vol 5, (1), pp. 583-586

Stapenhurst, T., 2009. The Benchmarking Book: A How to Guide to Best Practice for Managers and Practitioners. 1st ed. London: Butterworth-Heinemann

SupplyChainBrain (2008) Supply Chain Management Information Resource [Online] Available from World Wide Web: http://www.supplychainbrain.com/content/research-analysis/apqc/single-article-page/article/benchmarking-for-business-excellencenbspnbspnbspnbspnbsp/ [accessed 12 April, 2011]

Taylor, R. L., 2006. Acquisition Strategy and Source Selection for Co-Designing a New-Development Spacecraft. Benchmarking. Vol 3, (10), pp. 1-12

Wilson, L. A., 2005. Benchmarking Sector Specific Standards. ASQ World Conference on Quality and Improvement Proceedings. Vol 59, (1), pp.19-28

Part 2: Personal Reflection

Title: A critical reflection of the team presentations

Introduction

The purpose of this assignment is to critically reflect on the strengths and weaknesses of our team’s presentation. The assignment will discuss our content and approach in comparison to other team presentations and will take into account the feedback given by our tutors. The assignment will draw on personal reflections gained from my learning experience during the course of the module and will briefly discuss core competencies which have been developed as a result of my involvement in the group assignment.

Team Dynamics

I will begin my analysis of the presentations by briefly discussing my perceptions and feelings at the start of the group activity. I will discuss a bit about my skills and strengths highlighting my current abilities and my awareness of potential development areas.

My initial thoughts before undertaking the group assignment were mixed because I was assigned to my second choice industry sector and this was an area which I was not familiar with. Despite this, I was keen to begin the assignment as it would give me the opportunity to gain knowledge in an industry area I knew very little about.

My previous studies on different modules have taught me that I play different roles within teams which hold equal importance to the performance and dynamics of the teams I am involved in. According to Belbin’s team role theory, my dominant team roles include implementer, coordinator, shaper and plant. Therefore, I play a key role in creating ideas, clarifying objectives, allocating responsibilities and motivating other team members to contribute. This was ideal for motivating other team members to have a share and ensured that we completed the assignment to a good standard and to the allocated deadline. However, as I am goal or task orientate I tend to place more emphasis on completing assignments. Hence, this may have added addition pressure on some of the other team members who may have approached the assignment at their own rate of learning. This is a potential area of development as I should also take into consideration other individuals abilities as this could potentially impact the dynamics of the team.

Consideration was given to Tuckman’s stages of group development theory, during our initial group meetings to avoid the pitfalls ‘Groupthink’ and potentially working together as a dysfunctional team. Cameron (2009) highlights some negative group behaviours such as private discussions and withdrawal from the group which were factors we considered to ensure positive behaviours were present for supporting group and task needs. This was achieved by regular communication between all group members via email and online group discussion pages and openly sharing information which supported all group members with their individual contributions to the assignment.

Despite this, it is impossible to achieve perfect dynamics and there were some evident weaknesses to our team’s performance. Such weaknesses were evident at the early stages of forming the group which included, initially agreeing targets and not keeping to them, lack of focus and clear direction about how to approach the assignment, and some disagreements about how to assign the different roles for the presentation. These factors could have been influenced by a lack of understand of the task requirements and the fact that other assessment deadlines were due at a similar time, resulting in a lack of focus. Once these hurdles were overcome, we found that the group worked a lot better together and that we were making healthier progress for completing our presentation.

Presentation Reflections

Industry Presentations

Overall, I felt that there was a general good standard and quality of information presented by the other groups. However, there was clear evidence that some groups were more meticulous about the quality, content and analysis of their presentations. I felt the groups which were strongest were the ones who had an even flow of group members involved in verbal contributions; the groups who did not read directly from the slides presented but rather had put together some form of a script; the groups which were cl