Absolute Benchmarking

Absolute Benchmarking is a groundbreaking technique developed to understand how well your company is doing versus how well it could be doing. Absolute Benchmarking is a quantitative, practical technique that quickly identifies your company's biggest opportunities for improvement. Assigning "stretch" goals or making strategy without understanding the limits to which your value stream can stretch is potentially a recipe for a meltdown in performance. Stretch goals should not be used as a proxy for understanding performance drivers. For executives and managers Absolute Benchmarking is as fundamental to understanding operations performance and profit potential as revenue and expenses are fundamental for accountants to understand income statements.

The efficient frontier is a concept in modern financial portfolio theory. A combination of assets, i.e. a portfolio, is referred to as "efficient" if it has the best possible expected level of return for its level of risk. In applying this concept to Absolute Benchmarking of manufacturing and supply chains, the Factory Physics approach has produced a powerful, practical advance in optimizing and controlling performance.

There are two types of Absolute Benchmarking: Flow Benchmarking and Inventory Benchmarking.

Flow Benchmarking provides information on how well your process flow is working versus how well it could be working. Understand if your cycle times as short as they could be. Determine the optimal amount of WIP for your process. Get a quantitative understanding of your capacity. Click here for more description of this extremely powerful technique.

Inventory Benchmarking and Optimization provides the answer to the constant questions we hear about inventory optimization: What is the optimal amount of inventory for your company? Click here for more information on this easy-to-use, powerful management tool for practical decision making.

FPI provides Absolute Benchmarking as an initial assessment and as part of ongoing efforts in our Factory Physics implementations to get the most effective results possible in improving performance. Is your company truly Lean? Do you have any way to know? To answer those questions or for information on conducting an Absolute Benchmark of your company contact:

Ed Pound
Factory Physics, Inc.
979-846-7828 x151