What is Best practice

The term "best practice" has been used in so many ways that it is losing much of its meaning.

From the experience on the Australian Best Practice Program the following elements of "best practice" are highlighted.[ABPDP: Lessons from Best Practice practitioners; Best Practice program; Record of BP Practitioners Networking meeting 7&8/12/93, Melbourne; pp. 36- 37]

  1. A shared vision for world class performance. A vision supported by a comprehensive integrated and cooperative strategy that results in continuous improvement in cost, quality and timeliness.
  2. A commitment to change throughout the organisation driven by the full and public support of the CEO.
  3. A learning organisation committed to continuous improvement that manifests itself in a highly skilled and flexible workforce and recognises the value of all people within the organisation.
  4. A cooperative industrial relations environment that incorporates effective consultation throughout the organisation. Where appropriate this will mean that the relevant unions contribute to the process of change.
  5. Flatter organisation structures supported by the devolution of responsibility; the empowerment of workers and improved communication. This frequently involves team-based work organisation.
  6. A specific focus on customers, both internal and external.
  7. The integration of suppliers into the business process.
  8. The development and use of performance measurement systems and benchmarking throughout the organisation.
  9. The pursuit of innovation in technology, products and processes and their successful integration into the organisation.
  10. Innovative human resource policies, including a commitment to occupational health and safety and equal employment opportunity.
  11. The integration of environmental management into all operations.
  12. A commitment to the development of external relationships (networks) that enhance the competitive capabilities of firms.

Best Practice incorporates the following principles:

In applying these principles there are SPECIFIC INGREDIENTS-

Key Elements are:

The necessary changes are: [ABPDP; op.cit. p. 6]

  1. Altering the nature of the interactions between management and the workforce, between the workforce and support staff and between customers and suppliers. Greater communication and cooperation is still required in all these relationships.
  2. Adjustments in the ways training and skills development are viewed. There needs to be a move away form viewing training as a cost to seeing it as an investment.
  3. An emphasis on developing and using quantitative and qualitative processes and outcomes such as benchmarking and Key Performance Indicators (KPI) to measure progress towards best practice.
  4. A realisation of the importance of both customers and suppliers in improving the competitiveness of an enterprise.

    Companies should not wait for a crisis before reviewing the performance of their organsiation. More subtle signs such as:

    • reduced market share;
    • increased defects;
    • decreased productivity and
    • low staff morale;
    all highlight the need for change.

    Smart companies develop a vision and strategy that set out the direction in which the company should go. This is a far more effective vehicle for change and continuous improvement than the negative influence of a crisis.

    Training has emerged as central to a successful change process and a fundamental element of best practice reform. The type and form of training introduced are seen as crucial to the success of the change. BP practitioners emphasised the need to extend training from traditional technical skills to conceptual and interpersonal skills.

    Recognition of the interdependence of customers and suppliers was common to all BP practitioners. Customers and suppliers should be regarded as part of the company.

    In measuring effectiveness of change, qualitative measures were also emphasised:

    • improved organisational culture
    • more harmonious industrial relations achieved by improving communication and understanding between managers, unions, and employees;
    • multi-skilling of employees and
    • a greater customer focus.

    The need to look outwards as well as inwards meant most BP companies benchmarked company performance against other companies. The usual traditional quantitative measures were supplemented by benchmarking and KPIs to measure the success of particular processes. Benchmarking means pursuing continuos improvement; it is not an outcome.

    Integrating new techniques within an overall organisational change process is the preferred approach for change. BP does not mean short term, easy solutions.

    External assistance can be an important catalyst for the expansion, acceleration, and commitment to change, especially from the CEO.

    There is no one model for change. Each company must apply the principles of best practice according to their own organisational culture and circumstances.

    Process

    This very simplified (and artificially linear ) outline combines the two aspects of the ongoing business plan with the need to manage the change.
    1. Commitment from CERO & Senior Management; Issue Statement of Intent to implement change process leading to BP
    2. Conduct Strategic Analysis of organisation's position; SWOT
    3. Declare Vision and Mission
    4. Identify Customers/Clients and their Needs and desired Outcomes (Objectives)
    5. Apply BP process principles throughout-
      • Continuous Improvement
      • Participation, Involvement
      • Benchmarking
      • Customer focus
      • etc.
      • Set up Consultative Committees etc.
    6. Define Functions/Activities to meet customer needs and achieve outcomes.
      • Marketing
      • Production
      • Systems
      • Research
      • Product Development
      • etc.
    7. Identify/Develop Benchmarks, Indicators
    8. Develop and Implement Strategy
      • Operational documentation
      • Structure - team formation
      • Implementation
      • Resources to implement
    9. Support Implementation with communication strategy, training system etc.
    10. Review progress; Ongoing Kaizen

    A simple summary of the best practice process is to say that it requires two things-

    1. a total commitment to continuing improvement and
    2. a total commitment to a consultative and inclusive way of managing the change.

    Best practice trends

    The Australian Manufacturing Council, as well as supporting Best Practice companies, has explored through research the dynamics of best practice, innovation and export expansion

    Best Practice in Action (1995)

    This publication provides summaries of companies and projects funded under the Best Practice Demonstration Program.

    Leading the Way (1994)

    This outlines the Best Manufacturing Practice (BMP) Model which consists of the following elements:
    • Effective People Practices
    • Leadership
    • Benchmarking
    • Technology
    • Quality
    • Development of linkages

    The report "Wealth of Ideas" (1994) explores the way linkages sustain innovation and growth.

    For a company the linkages are with:

    • Leading edge customers
    • Suppliers
    • R&D Providers
    • Other industry linkages

    The most recent report explores "The Innovation Cycle" (1995) and concluded that:

    • Australian firms can be innovative,
    • Exporting and innovation are closely intertwined, and
    • Firms make innovation happen.

    Innovative firms -

    • -create the need for new ideas;
    • -trawl the market for solutions;
    • -are set up to maximise the contribution of their key resource - the skilled people whom they employ.

    To find out how your organisation can pursue excellence, please contact PEM. Any questions, feedback or comments are welcome, just click here

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    Updated January 8, 1997