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ENGINEERING: Benchmarking Underway in the Structural Steel Industry


Recent Gauteng Business News

Since the registration earlier this year of the Southern African Institute of Steel Construction (SAISC) with the United Nations Industry Development Organisation (UNIDO) as a UNIDO Subcontractor and Procurement Exchange Centre (SPX) to promote the involvement of its members in the South African Competitive Supplier Development Program (CSDP), progress has been made to establish a network of 15 to 20 trained and approved development specialists in South Africa to directly assist suppliers on the benchmarking system. “The first 25 member companies in the structural steel industry are currently being processed,” says SAISC industry development director, Kobus de Beer.

The benchmarking system which the SAISC has chosen to use was developed by UNIDO and is widely acclaimed throughout the world

“It is the best benchmarking tool I have come across,” says de Beer. “It involves the assessment of companies’ standing in terms of practice and performance using a technique that is both time efficient and enables meaningful comparisons to be made with the ‘best in the business.’”

The tool was established collaboratively by two internationally reputed benchmarking specialist companies, Winning Measures and Comparison International and allows benchmarked companies to obtain immediate feedback on their performance in comparison with their global competition. “The approach is similar to that espoused in the ‘Balanced Scorecard’ process made famous by authors Kaplan and Norton. In essence this is a four step process starting with analysis which ultimately informs appropriate action: asking where you are going (strategic focus), the assessment of how you are doing (benchmarking), implementing the required change to get you to where you are going and, finally, the action of continuous improvement along the path.

“This combination of educated, strategic analysis and appropriate ongoing action produces sustainable results,” says de Beer.

The analysis portion of the UNIDO programme is extremely comprehensive with 50 elements of the business measured including business skills and experience, improving products and services, how quickly do employees react, how do we know what our customers really want, achieving constant quality and many others.

With respect to the mechanics of the programme De Beer explains that the process consists of four key stages: preparation and training of the company, data collection and direct feedback, analysis and initial feedback and reporting and action planning.

“From the underlying philosophy of this benchmarking tool to the way in which it is implemented, it is abundantly clear that it is not just an academic exercise in information gathering but also fundamentally an action programme. The numbers are there to inform the appropriate action which the organisation needs to undertake to become world class,” says de Beer.

He adds that a key aspect of the programme is that it is entirely confidential. “One knows what one’s own position is relative to other companies in the world but not the identity of the other companies.”

An integral part of the benchmarking service that the Institute will offer to its members is ‘profiling’. “This is a system of codes representing the overall offering of a company – specific products it produces, its capacity, the quality assurance system to which it complies, etc – which is used by end-users anywhere in the world to find suitable suppliers. South African companies which are profiled will be in a very favourable position to attract work both foreign and local,” says de Beer.

UNIDO defines benchmarking as the ‘practice of being humble enough to admit that someone else is better at something, and wise enough to try and learn how to match or even surpass them at it’.

“If humility and wisdom are part of what is required to be the best, then South African industry has what it takes,” says de Beer. “But, of course, a great deal of intelligent effort is also required and benchmarking, fundamental to the ongoing health of any industry, is a very good place to start.”

De Beer says that in the increasingly competitive global market, being world-class is essential. “While this applies to all South African industries, it is particularly pertinent to the steel construction industry, which looks to recoup its massive investment over the past years in equipment, factory layout changes, new factories, training and generally upgrading the industry’s capacity for both service and quality,” he says. “In addition, in line with best practice procedures the industry now has, inter alia, electronic draughting, electronic data transfer, electronic materials handling processes, in short, state-of-the-art practices.”

SAISC executive director, Dr Hennie de Clercq, says that the UNIDO benchmarking process is one of the most important offerings of the Institute. “Of course,” says de Clercq, “one of the fundamental aspects to the success of the programme is the facilitator who should be experienced in both business and the industry and, in this regard, Kobus de Beer has all the necessary credentials,” he concluded.

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