Various articles for Quality and Management

 QUALITY GURUS

                       

In a previous article we talked about the scientist of quality gurus, Dr.. Deming, now will be talking about another scientist he is......

Joseph M. Juran

24 Dec 1904 -Dr.Joseph Juran born in Romania,and 1951 - publishing "Quality Control Handbook"

mid 50's - Like Demning, travelled to Japan to conduct top and middle level executive seminars

the chairman emeritus of the Juran Instituite and an ASQC Honorary member. Since 1924, Juran has pursued a variety career in management as an engineer, executive, government administrator, university professor, labour arbitrator, corporate director, and consultant. Specialising in managing for quality, he has authored hundreds of papers and 12 books, including Juran's Quality control handbook , Quality Planning and Analysis, and Juran on Leadership for Quality.

Juran's trilogy:

is an approach to cross functional management that is composed of three managerial processes: planning, control, and improvement

Quality planning: 
This is the activity of developing the products and processes required to meet customer's needs. It involves a series of universal steps which can be abbreviated as follows:

• Establish quality goals
• Identify the customers- those who will be impacted by the efforts to meet the goal.
• Determine the customers' needs
• Develop product features that respond to customers' needs
• Develop processes that are able to produce those product features
• Establish process controls, and transfer the resulting plans to the operating forces

Quality control: 
This process consists of the following steps:

• Evaluate actual quality performance
• Compare actual performance to quality goals
• Act on the difference

Quality improvement: 
This process is the means of raising quality performance to unprecedented levels ("breakthrough"). The methodology consists of a series of universal steps:

• Establish the infrastructure needed to secure annual quality improvement.
• Identify the specific needs for improvement -the improvement projects
• For each project establish a project team with clear responsibility for bringing the project to a successful conclusion
• Provide the resource, motivation, and training needed by the team to:
  1.Diagnose the cause
  2.Stimulate establishment of remedies
  3.Establish controls to hold the gains

Cost of quality: 
The cost of quality, or not getting it right first time, Juran maintained should be recorded and analyzed and classified into failure costs, appraisal costs and prevention costs.

• Failure costs
  Scrap, rework, corrective actions, warranty claims, customer complaints and loss of custom
• Appraisal costs
  Inspection, compliance auditing and investigations
• Prevention costs
  Training, preventive auditing and process improvement implementation

Juran proposes 10 steps to quality improvement:

1. Build awareness of the need and opportunity to improve
2. Set goals for that improvement
3. Create plans to reach the goals
4. Provide training
5. Conduct projects to solve problems
6. Report on progress
7. Give recognition for success
8. Communicate results
9. Keep score
10. Maintain momentum

Total Quality Management

TQM

TQM

DEFINITION:

  Total Quality Management (TQM) is an enhancement to the traditional way of doing

business. It is a proven technique to guarantee survival in world-class competition. Only 

by changing the actions of management will the culture and actions of an entire organization 

be transformed. TQM is for the most part common sense. Analyzing these words.

Total — made up of the whole

Quality — Degree of Excellence a Product or Service provides

Management — Act, art or manner of handling, controlling, directing etc.

TQM CONCEPTS:

The above principles are bandied freely around in the above discussion. Its worth

dwelling with each for a moment.

Be customer–focused means everything you do will be done by placing the customer

in the centre. The company should regularly check customer’s attitudes. This will include the external and internal customer concept.

Do it right first time so that there is no rework. This essentially means cutting down

on the amount of defective work.

Constantly improve, this allows the company gradually to get better. One of the

axioms use by TQM people is ‘‘A 5% improvement in 100% of the areas is easier than a

100% improvement in 5% of the areas.

Quality is an attitude The attidue is what differentiates between excellence and

mediocracy. Therefore it’s very important to change the attitude of the entire workforce

i.e., basically the way the company works company’s work culture.

Telling the staff what is going on means keeping the entire workforce informed

about he general direction the company is headed in typically this includes them briefings,one of the main elements to TQM.

Training and education of the workforce is a vital ingredient, as untrained staff tend

to commit mistakes. Enlarging the skill base of the staff essentially makes them do a wider range of jobs and do them better. In the new system of working under TQM educating the staff is one of the principles.

Measurement of work allows the company to make decisions based on facts, it also

helps them to maintain standards and keep processes with in the agreed tolerance levels.

The involvement of senior management is essential. The lack of which will cause the

TQM program to fail.

Getting employees to make decision on the spot so that the customer does not face

any inconvenience in empowering the employees.

Mailing it a good place to work. In many an organisation there exists a lot of fear in

the staff. The fear of the boss, fear of mistakes of being sacked. TQM program is any

company filled with fear cannot work, therefore fear has to be driven out of the company before starting of TQM program.

Introduce team working, its boosts employee morale. It also reduces conflict among

the staff. It reduces the role of authority and responsibility, and it provides better more

balanced solutions. In a lot of companies teamwork is discouraged, so TQM programs

must encourage it.

Organise by process, not by function. This concentrates on getting the product to

the customer by reducing the barriers between the different departments.

BASIC APPROACH

TQM requires six basic concepts :

1. A committed and involved management to provide long-term top-to-bottom organizational support.

2. An unwavering focus on the customer, both internally and externally.

3. Effective involvement and utilization of the entire work force.

4. Continuous improvement of the business and production process.

5. Treating suppliers as partners.

6. Establish performance measures for the processes.

There concepts outline an Excellent way to run an organization. A brief paragraph

on each of them is given here.

1. Management must participate in the quality program. A quality council must be

established to develop a clear vision, set long-term goals and direct the program. Managers participate on quality improvement teams and also as coaches to other teams. TQM is a continual activity that must be entrenched in the culture it is not just a one-shot program. TQM must be communicated to all people.

2. The key to an effective TQM program is its focus on the customer. An excellent

place to start is by satisfying internal customers. We must listen to the ‘‘Voice of the

customer’’ and emphasize design quality and defect prevention.

3. TQM is an organization–wide challenge that is everyone’s responsibility. All

personnel must be trained in TQM, statistical process control (SPC) and other appropriate quality improvement skills so they can effectively participate on project teams. People must come to work not only to do their jobs, but also to think about how to improve their jobs, people must be empowered at the lowest possible level to perform processes in an optimum manner.

4. There must be a continue striving to improve all business and production processes.

Quality improvement projects, such as on-time delivery, order-entry efficiency, billing

error rate, customer satisfaction, cycle time, scrap reduction and supplier management

are good places to begin.

5. On the average 40% of the sales is purchased product or service, therefore, the

supplier quality must be outstanding. The focus should be on quality and life cycle costs rather than price. Suppliers should be few in number so that true partnering can occur.

6. Performance measures such as uptime, percent non-conforming, absentecism

and customer satisfaction should be determined for each functional area.

Quantitative data are necessary to measure the continuous quality improvement 

activity.

Quality Management Systems

QUALITY SYSTEMS are made up of the quality organization and the written guidelines used to define the quality organization as they relate to the rest of the organization. Quality systems are the result of the quality policy established by the executive management team. The two most important elements of quality systems are the quality manual and the organization's standard operating procedures. When developing the quality manual, it is recommended that attention be paid to following the guidelines established by the ANSU ASQC Q9000-1, Q9001-1, Q9002-1, Q9003-1, and Q9004-1 standards. These are the American equivalents to the ISO 9000 series of quality standards. The ANSI/ASQC standards are available from the American Society for Quality Control,611 East Wisconsin Avenue, Milwaukee, WI 53202 and from ASTM. Even if the organization has no intention of applying for ISO registration, the quality guidelines in the ANSI/ASQC Q9000-1 series of quality systems are among the best available to control quality.

Six Sigma

Six Sigma Overview

1.1 What is Six Sigma?

Sigma ( σ) is a letter in the Greek alphabet that has become

the statistical symbol and metric of process variation. The

sigma scale of measure is perfectly correlated to such characteristics

as defects-per-unit, parts-per-million defectives, and

the probability of a failure. Six is the number of sigma measured

in a process, when the variation around the target is

such that only 3.4 outputs out of one million are defects under

the assumption that the process average may drift over the

long term by as much as 1.5 standard deviations.

Six Sigma may be defined in several ways. Tomkins (1997)

defines Six Sigma to be “a program aimed at the near-elimination

of defects from every product, process and transaction.”

Harry (1998) defines Six Sigma to be “a strategic initiative

to boost profitability, increase market share and

improve customer satisfaction through statistical tools that

can lead to breakthrough quantum gains in quality.”

Six Sigma was launched by Motorola in 1987. It was the

result of a series of changes in the quality area starting in the

late 1970s, with ambitious ten-fold improvement drives. The

top-level management along with CEO Robert Galvin developed

a concept called Six Sigma. After some internal pilot

implementations, Galvin, in 1987, formulated the goal of

“achieving Six-Sigma capability by 1992” in a memo to all

Motorola employees (Bhote, 1989). The results in terms of

reduction in process variation were on-track and cost savings

totalled US$13 billion and improvement in labor productivity

achieved 204% increase over the period 1987–1997

(Losianowycz, 1999).

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Quality costs

Manufacturing a quality product, providing a quality service, or doing a quality job – one

with a high degree of customer satisfaction – is not enough. The cost of achieving these goals

must be carefully managed, so that the long-term effect on the business or organization is a

desirable one. These costs are a true measure of the quality effort. A competitive product or

service based on a balance between quality and cost factors is the principal goal of responsible

management and may be aided by a competent analysis of the costs of quality (COQ).

The analysis of quality-related costs is a significant management tool that provides:

- A method of assessing the effectiveness of the management of quality.

- A means of determining problem areas, opportunities, savings, and action priorities.

The costs of quality are no different from any other costs. Like the costs of maintenance,

design, sales, production/operations, and other activities, they can be budgeted, measured

and analyzed.

Having specified the quality of design, the operating units have the task of matching it. The

necessary activities will incur costs that may be separated into prevention costs, appraisal

costs and failure costs, the so-called P-A-F model first presented by Feigenbaum. Failure

costs can be further split into those resulting from internal and external failure.

Prevention costs:

These are associated with the design, implementation and maintenance of the quality

management system. Prevention costs are planned and are incurred before actual operation.

Appraisal costs:

These costs are associated with the supplier’s and customer’s evaluation of purchased

materials, processes, intermediates, products and services to assure conformance with the 

specified requirements.

Internal failure costs:

These costs occur when the results of work fail to reach designed quality standards and are detected before transfer to the customer takes place.

External failure costs:

These costs occur when products or services fail to reach design quality standards but are not detected until after transfer to the consumer.

Quality Planning

Quality is:

1. When a product is consistently represented.

2. An attitude of excellence with an objective of error-free

performance shared by all employees.

3. Achieved through dedicated and Skilled employees, modem facilities, controlled manufacturing processes, continuing education, and a positive work environment.

4. Directly related to superior value and performance and is provided to customers in terms of productivity improvements, reduced operating costs, and outstanding service.

 Quality is simply defined as: providing goods and services that meet or exceed customer

requirements.

- To provide goods and services that meet this definition, the executives of the organization must have a strategic plan to lead the company along this path. The plan should contain

both long-term and short-term objectives. The window for long-term objectives should be no more than four years and preferably three years. The world changes so fast that planning more than four years ahead is not practical. Markets change at almost a constant pace. Customers' requirements do the same.

A long-term strategic plan should consist of four main programs.  There should be: (1) a program for futuristic quality  planning, (2) a program for service and product improvement,  (3) a program for employee involvement and education, and (4) a program for business systems. 

These programs require a mission statement so that the goals of the  program are understood. As with the quality policy statement, the mission statements for these programs should be 

short and to the point. This gives precise direction to steering committees implementing these programs. Mission statements for the programs I recommend are:

1. Futuristic quality planning-Develop and drive business  decisions that utilize quality tools and concepts to assure 

the successful introduction and implementation of new 

products, processes, and services to our customers.

2. Service and product improvement--Develop and implement programs to improve office and manufacturing operations, 

processes, and systems leading to improvements 

and consistency in service and products, and reductions 

in internal waste.

3. Employee involvement and education-Utilize the inherent knowledge and expertise of our employees to identify and 

participate in opportunities for improvement, and provide 

appropriate education as needed in support of these goals.

4. Business systems--Develop and manage the business systems required to assure quality, improve operations, and 

support our internal and external customers.

These programs require further definition to understandhow they are applied to effect continuous improvement.

Quality Improvement

What is Quality Improvement ?

  Quality Improvement is a formal approach to the analysis of performance and systematic efforts to improve it.

Quality Improvement –  involves both prospective and retrospective reviews. It is aimed at improvement -- measuring where you are, and figuring out ways to make things better. It specifically attempts to avoid attributing blame, and to create systems to prevent errors from happening. Quality Improvement activities can be very helpful in improving how things work. Trying to find where the “defect” in the system is, and figuring out new ways to do things can be challenging and fun.

Quality Assurance

    The Definition Of Quality Assurance:

·     Assurance: The act of giving confidence, the state of being certain or the act of making certain.

·     Quality Assurance: is a management system designed to control the activities at all stages (product design; production; delivery and service), to prevent quality problems and ensure only conforming products reach the customer.

  ISO 9000: 2000, Section 2.2.11 defines quality assurance as the "part of quality man­agement focused on providing confidence that quality requirements are fulfilled."The Quality Assurance department ensures that the practices and methods adopted throughout the company result in products and services which meet customer requirements first time, every time. 

  The ideal role of the department is to oversee the whole process of QA within an organization, to provide guidance and advice on the assignment of roles and respons­ibilities to be played by each function and person, and to address weaknesses in the system. QA needs to be an integral part of all an organization's processes and func­tions, from the conception of an idea and, then, throughout die life cycle of the product or service - determining customer needs and requirements, planning and designing, production, delivery and after-sales service. Finally, the definition of the (Quality Assurance) can be summarized into a science which finds out the preventive actions of the mistakes causes.

Objective of Quality Assurance

The main objective of QA is to build quality into the product and/or service during the upstream design and planning processes. Quality assurance uses such techniques as internal audits and surveillance to ensure that the quality organization is accomplishing two goals:

·     The organization is following the procedures as they are stated in the quality manual.

·     The procedures, when followed, are effective and yield the desired results.

New strategies for meeting global competition must include quality assurance. Implementation of quality assurance requires documented policies, procedures, and work instructions.

Quality circle

A quality circle is a small group of between three and 12 people who do the same or similar work, voluntarily meeting together regularly for about one hour per week in paid time, usually under the leadership of their own supervisor, and trained to identify, analyse and solve some of the problems in their work, presenting solutions to management and, where possible, implementing solutions themselves.

The idea of the quality circle was first introduced by a number of large Japanese firms in a systematic attempt to involve all their employees, at every level, in their organisation’s drive for quality.

There are two main tasks assigned to quality circles: the identification of problems; and the suggestion of solutions. A secondary aim is to boost the morale of the group through attendance at the meetings and the formal opportunity to discuss work-related issues. Meetings are held in an organised way. A chairman is appointed on a rotating basis and an agenda is prepared. Minutes are also taken. They serve as a useful means of following up proposals and their implementation. The success of quality circles has been found to depend crucially on the amount of support they get from senior management, and on the amount of training that the participants are given in the ways and aims of the circles.

Kaoru Ishikawa, a professor at Tokyo University who died in 1989, is attributed with much of the development of the idea of quality circles. They created great excitement in the West in the 1980s, at a time when every Japanese management technique was treated with great respect. Many firms in Europe and the United States set them up, including Westinghouse and Hewlett-Packard. It was claimed at one time in the 1980s that there were as many as 10m people participating in quality circles in Japanese industry alone.

However, the method also came in for a good deal of criticism. Even Joseph Juran, one of the two American post-war germinators of the quality idea (the other was W. Edwards Deming), considered that quality circles were pretty useless if the company’s management was not trained in the more general principles of total quality management.

   Others criticised the way in which the idea was transferred from one culture to another without any attempt to tailor it to local traditions. It may, such critics suggested, be well suited to Japan’s participative workforce, but in more individualistic western societies it became a formalised hunt for people to blame for the problems that it identified. The original intention was for it to be a collective search for a solution to those problems.

   Quality circles fell from grace as they were thought to be failing to live up to their promise. A study in 1988 found that 80% of a sample of large companies in the West that had introduced quality circles in the early 1980s had abandoned them before the end of the decade. In his book “Quality: A Critical Introduction”, John Beckford quotes the example of a western retailer that took almost every wrong step in the book. These included:

• training only managers to run quality circles, and not the staff in the retail outlets who were expected to participate in them;

• setting up circles where managers appointed themselves as leaders and made their secretaries keep the minutes. This maintained the existing hierarchy which quality circles are supposed to break out of;

• expecting staff to attend meetings outside working hours and without pay;

• ignoring real problems raised by the staff (about, for example, the outlets’ opening hours) and focusing on trivia (were there enough ashtrays in the customer reception area).

Benchmarking

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time, and cost. Improvements from learning mean doing things better, faster, and cheaper. 

Benchmarking involves management identifying the best firms in their industry, or any other industry where similar processes exist, and comparing the results and processes of those studied (the "targets") to one's own results and processes to learn how well the targets perform and, more importantly, how they do it. 

The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. 

Also referred to as "best practice benchmarking" or "process benchmarking", it is a process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice companies' processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.

Popularity and benefits from benchmarking

In 2008, a comprehensive survey on benchmarking was commissioned by The Global Benchmarking Network, a network of benchmarking centers representing 22 countries. Over 450 organizations responded from over 40 countries. The results showed that:

1.     Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of organisations) of 20 improvement tools, followed by SWOT analysis(72%), and Informal Benchmarking (68%). Performance Benchmarking was used by (49%) and Best Practice Benchmarking by (39%).

2.     The tools that are likely to increase in popularity the most over the next three years are Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking. Over 60% of organizations that are not currently using these tools indicated they are likely to use them in the next three years.

Collaborative benchmarking

Benchmarking, was originally invented as a formal process by Rank Xerox, is usually carried out by individual companies. Sometimes it may be carried out collaboratively by groups of companies (e.g. subsidiaries of a multinational in different countries). One example is that of the Dutch municipally-owned water supply companies, which have carried out a voluntary collaborative benchmarking process since 1997 through their industry association. Another example is the UK construction industry which has carried out benchmarking since the late 1990s again through its industry association and with financial support from the UK Government.

Procedure

There is no single benchmarking process that has been universally adopted. The wide appeal and acceptance of benchmarking has led to various benchmarking methodologies emerging. The seminal book on benchmarking is Boxwell's Benchmarking for Competitive Advantage published by McGraw-Hill in 1994.  It has withstood the test of time and is still a relevant read. The first book on benchmarking, written and published by Kaiser Associates, is a practical guide and offers a 7-step approach. Robert Camp (who wrote one of the earliest books on benchmarking in 1989)  developed a 12-stage approach to benchmarking.

The 12 stage methodology consisted of 1. Select subject ahead 2. Define the process 3. Identify potential partners 4. Identify data sources 5. Collect data and select partners 6. Determine the gap 7. Establish process differences 8. Target future performance 9. Communicate 10. Adjust goal 11. Implement 12. Review/recalibrate.

The following is an example of a typical benchmarking methodology:

1.     Identify your problem areas - Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, or financial ratio analysis. Before embarking on comparison with other organizations it is essential that you know your own organization's function, processes; base lining performance provides a point against which improvement effort can be measured.

2.     Identify other industries that have similar processes - For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges. These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms.

3.     Identify organizations that are leaders in these areas - Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study.

4.     Survey companies for measures and practices - Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants.

5.     Visit the "best practice" companies to identify leading edge practices - Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group.

6.     Implement new and improved business practices - Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process.

Cost of benchmarking

The three main types of costs in benchmarking are:

• Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.
• Time Costs - Members of the benchmarking team will be investing time in researching problems, finding exceptional companies to study, visits, and implementation. This will take them away from their regular tasks for part of each day so additional staff might be required.
• Benchmarking Database Costs - Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice now.

The cost of benchmarking can substantially be reduced through utilizing the many internet resources that have sprung up over the last few years. These aim to capture benchmarks and best practices from organizations, business sectors and countries to make the benchmarking process much quicker and cheaper.

Technical Benchmarking/Product Benchmarking

The technique initially used to compare existing corporate strategies with a view to achieving the best possible performance in new situations (see above), has recently been extended to the comparison of technical products. This process is usually referred to as "Technical Benchmarking" or "Product Benchmarking". Its use is particularly well developed within the automotive industry ("Automotive Benchmarking"), where it is vital to design products that match precise user expectations, at minimum possible cost, by applying the best technologies available worldwide. Many data are obtained by fully disassembling existing cars and their systems. Such analyses were initially carried out in-house by car makers and their suppliers. However, as they are expensive, they are increasingly outsourced to companies specialized in this area. Indeed, outsourcing has enabled a drastic decrease in costs for each company (by cost sharing) and the development of very efficient tools (standards, software).

Types of benchmarking

• Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.
• Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.
• Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.
• Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.
• Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single function to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.
• Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed.

Metric Benchmarking

Another approach to making comparisons involves using more aggregative cost or production information to identify strong and weak performing units. The two most common forms of quantitative analysis used in metric benchmarking are data envelope analysis (DEA) and regression analysis. DEA estimates the cost level an efficient firm should be able to achieve in a particular market. In infrastructure regulation, DEA can be used to reward companies/operators whose costs are near the efficient frontier with additional profits. Regression analysis estimates what the average firm should be able to achieve. With regression analysis firms that performed better than average can be rewarded while firms that performed worse than average can be penalized. Such benchmarking studies are used to create yardstick comparisons, allowing outsiders to evaluate the performance of operators in an industry. A variety of advanced statistical techniques, including stochastic frontier analysis, have been utilized to identify high performers and weak performers in a number of industries, including applications to schools, hospitals, water utilities, and electric utilities.

One of the biggest challenges for Metric Benchmarking is the variety of metric definitions used by different companies and/or divisions. Metrics definitions may also change over time within the same organization due to changes in leadership and priorities. The most useful comparisons can be made when metrics definitions are common between compared units and do not change over time so improvements can be verified.