It has been estimated 75 per cent of business performance improvement projects fail to produce the intended results.
One reason for this high failure rate is that plans are based on incomplete or inaccurate information. In order for real planning to take place, managers have access to information on a timely basis and they must have confidence in its accuracy and utility.
They must also be trained in using the data with which they are provided. A prerequisite to meaningful assessment is to measure the initial position for only by so doing can one track progress towards an intended target.
In the process of performance improvement planning a purchasing department should gather information relating to procurement and logistic operations, analyze it and present it in a comprehensible and digestible form to senior planners within the municipal organization. For managers to make rational decisions they must have access to current, accurate and comprehensive data, provided to them on a timely basis.
The presentation of information in a raw form slows the process of factoring that information into decision planning. It is, therefore, highly beneficial to receive information in a processed form, so it’s first complied and analyzed by those having specific understanding of the subject to which it relates before it is provided to senior decision-makers.
The monitoring of the process of supply should be directed towards effecting improvement whenever possible. The general goal is to cut both the time and cost involved in sourcing suppliers. The intent in this regard is to identify and correct all internal obstacles to optimal procurement. Since the optimal result is dynamic, the process of such improvement is ongoing.
In other words: further improvements can always be made. As with supplier performance monitoring, performance should be measured across a range of criteria. Benchmarking is one of the more widely utilized techniques for measuring the extent of acceptable performance. It is a highly-respected practice in the business world, which looks inward and outward to find best practice and high performance and then measures actual business operations against those goals.
Two types of benchmarks may be used: internal and external. Both can be used in conjunction with other improvement tools.
Under an internal program of benchmarking, performance targets are fixed, current performance is assessed, methods are devised for improving the standard of performance to a target level and then a measurement is taken after a reasonable period of time to determine whether progress has been made towards reaching those targets.
Under external benchmarking, the performance of an organization in key areas is compared with that of its principal competitors. The goal of external benchmarking is to bring about continuous improvements in service delivery by:
- Identifying examples of best practice from other organizations, whether in the public or private sector;
- monitoring progress in making improvements against the leading organizations so identified;
- learning from those who have achieved excellence in selected areas; and
- setting appropriate performance measures and developing realistic targets for improvement.
The ultimate goal is to raise the level of performance at least to par with the best competitor in each area. One of the biggest mistakes made in setting upon external benchmarking is to look only to organizations within the same industry.
Such a narrow focus is unnecessary, since many business processes are common throughout the industry. For this reason, NASA employs the same fundamental Human Resources requirements for hiring and developing employees as does American Express and British Telecom and is able to use the same customer satisfaction survey as Brooklyn Union Gas.
One attraction of benchmarking is that it can provide the basis for an ongoing program of review. A mistake frequently made in corporate strategic planning is to assume all past initiatives have generated an improvement over the prior situation.
