Benchmarking in services

Citation

Motwani, J.G. and Sower, V.E. (2006), "Benchmarking in services", Benchmarking: An International Journal, Vol. 13 No. 3. https://doi.org/10.1108/bij.2006.13113caa.001

Benchmarking in services

Jaideep G. MotwaniChair and Professor of Management at the Seidman College of Business, Grand Valley State University. He has written more than 100 articles in the areas of competitive strategies, inventory management, technology management, quality management, benchmarking, and small business management. These articles appear in journals such as IEEE Transactions on Engineering Management, Operations Research, Business Horizons, Omega, Journal of Operational Research Society, European Journal of Operational Research, Expert Systems with Applications, International Journal of Operations & Production Management, Journal of Small Business Management, International Journal of Production Research, among others. Prior to his current position, Dr Motwani served as the Director of Seidman Business Services at Grand Valley State University. As Director, Dr Motwani worked very closely with small businesses as a consultant, trainer, and facilitator. His current research interests are in areas of ERP, lean systems, market orientation, e-commerce, and operations strategy.

Victor E. SowerProfessor of Management at Sam Houston State University. He has published more than 40 articles in peer reviewed journals and proceedings in the areas of quality management, health care quality improvement, technology management, inventory management, and cross cultural ethics. These articles appear in journals such as Health Care Management Review, Benchmarking for Quality Management & Technology, Journal of Management Education, International Journal of Operations & Production Management, International Journal of Quality & Reliability Management, International Journal of Management and Systems, Production & Inventory Management Journal, Industrial Management & Data Systems, Quality Progress, International Journal of Computer Applications in Technology, and Teaching Business Ethics. He is also the co-author of two books. He is certified by the American Society for Quality (ASQ) as a Quality Engineer. He has received awards for his teaching and his research. Prior to entering academics he spent 18 years in the process engineering and manufacturing management areas. His last position prior to entering the academic community was as General Manager of a manufacturing division of a Fortune 500 company.

Benchmarking in services

Benchmarking is defined as:

… an improvement process in which a company measures its performance against that of best-in-class companies, determines how those companies achieved their performance levels, and uses the information to improve its own performance (Bemowski, 1992, p. 20).

Under the best of circumstances, benchmarking can be difficult, time-consuming, and costly.

Service benchmarking is made more difficult than benchmarking in manufacturing because it appears that those things which are important to the customer may differ significantly from one service industry to another (Sower et al., 2001). There are lists of the determinants or dimensions of service quality which purport to be universal. Perhaps the best known of these is that of Parasuraman et al. (1985). However, these lists have been criticized by subsequent researchers who suggest that service-specific dimensions are required to completely address customers’ definition of quality in a specific industry (Carman, 1990; Ford et al., 1997).

Because of the question about the universality of the definition of quality in the service industry and the impact on benchmarking activities, the editors felt it beneficial to obtain as broad a cross-section of papers for this special issue as possible. The industries represented by the nine papers in this issue cover a broad spectrum of service industries from sports to banking; from laboratory services to hospitality and tourism.

The first paper, “Identifying and studying ‘best-performing’ services: an application of data envelopment analysis (DEA) to long term care” by Jo Ann Duffy, James Fitzsimmons and Nikhil Jain demonstrates the power of DEA in identifying and studying “best performing” services. The DEA models used actual nursing home data to create a set of “peer” best performers.

The second paper, “Profitability in professional sports and benchmarking: the case of NBA franchises” by Mahmoud Nourayi addresses the applicability of continuous improvement and benchmarking in sports management. The author analyzed the performance of NBA teams over three seasons and found, not surprisingly, a significant correlation between winning percentages and attendance. Using public information some critical success factors for winning teams were determined which could be of value in benchmarking and continuous improvement projects by NBA teams.

The third paper, “The internal performance measures of bank lending: a value-added approach” by Wei-Shong Lin and Albert Kuo-Chung Mei characterizes performance measures proposed in previous studies on three dimensions:

1. 1.

   final vs internal measure;

2. 2.

   monetary vs non-monetary measure; and

3. 3.

   degree of aggregation.

They propose the use of internal measures rather than final measures because internal measures are more predictive, more responsive time-wise, and address the quality of each lending process.

The fourth paper, “Integrating quality function deployment (QFD) and benchmarking to achieve greater profitability” by Ashok Kumar, Jiju Antony, and Tej Dakkar uses a real world example of a furniture company to illustrate how the service function of a manufacturing firm used QFD and benchmarking methodologies to identify product and process innovations that resulted in significant improvement in market share and profitability of the company.

The fifth paper, “A framework for information services: benchmarking for countries and companies” by Sameer Prasad and Jasmine Tata presents a typology-building methodology developed in social sciences and strategic management that allows for the comparison of information services around the world as a function of their level of development and cultural characteristics.

The sixth paper, “Laboratory service evaluation: laboratory product model and the supply chain” by G.M. Rynja and D.C. Moy redefines the analytical laboratory beyond just an analytical result reporting service. They propose extending performance measurement and evaluation to encompass environmental and social aspects because laboratory performance evaluation-based solely on economic measures is questionable and may adversely affect the laboratory’s environmental performance. The authors propose the laboratory product model (LPM) as an approach which takes life cycle thinking into account in assessing the performance of laboratories. The LPM defines a generic unit of production as an information product which facilitates the development of benchmarking performance measures.

The seventh paper, “Understanding the challenges of implementing best practices in hospitality and tourism SMEs” by Li-Jen Jessica Hwang and Andrew Lockwood suggests a model identifying seven key capabilities leading to adoption of best practices. The model is based on studies of small and medium sized enterprises (SMEs) in the hospitality and tourism industry in the UK. The paper discusses the diversity of strategies for developing best practices as well as barriers and challenges encountered.

The eighth paper, “Benchmarking customer service on the internet: best practices from family businesses” by Nancy Levenburg seeks to determine “best practices” in internet-delivered customer service by examining the practices of service sector market leaders. This study also measures performance results of adopting selected customer service applications.

The last paper, “Success factors for achieving high service revenues in manufacturing companies” by Heiko Gebauer, Thomas Friedli, and Elgar Fleish addresses difficulties that many manufacturing organizations experience in attempting to increase service revenues. The paper is based on an extensive benchmarking project the authors conducted with a number of manufacturing organizations. The study identifies success factors and the changes necessary to implement them successfully in order to increase service revenues.