A Benchmarking Methodology for the Australian Water Industry

This report was produced for the Urban Water Research Association of Australia, a now discontinued research program.

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A Benchmarking Methodology for the Australian Water Industry

Report no. UWRAA 135

May 1994


This project, sponsored by the Water Authority of Western Australia and funded by the Urban Water Research Association of Australia, had as its major objective the development and pilot testing of a benchmarking methodology suitable for use in the Water Industry. A secondary objective was to train a core of Water Industry personnel in the application of this methodology.

As a result of a nomination and selection process overseen by the Steering Committee, seven domains were selected as a basis for developing and testing the methodology. These domains, and the organisations within which the Prime Sites were located, were:

(1) Fleet Management, Water Authority of WA

(2) Mailed Payments Processing, Water Authority of WA

(3) Safety Surveillance of Headworks, Rural Water Corporation

(4) Sludge Treatment, Melbourne Water

(5) Submersible Pump Maintenance, Hunter Water

(6) Water Quality Monitoring & Testing, Melbourne Water

(7) Primary Treatment of Sewage, Sydney Water Board

In addition to these Prime Sites, two to five Reference Sites, drawn from the above organisations and both the Brisbane City Council and the South Australian Engineering and Water Supply Department, were established for comparative purposes. Additionally, a limited number of non-Water Industry organisations were identified as potential best practice sites and agreed to participate in the project. Sydney Water Board later withdrew its Prime Site status, but continued to contribute to the project via Reference Sites and access to their own independent benchmarking project. In total 30 Sites participated in the project.

As a result of experience gained from pilot testing a preliminary methodology at these 30 Sites, a six-phase benchmarking methodology has been developed. These major phases are:

Phase 1: Getting Started

Phase 2: Selecting Benchmarking Domains

Phase 3: Defining and Describing Domains

Phase 4: Selecting Benchmarking Partners

Phase 5: Exchanging Information

Phase 6: Managing Change

Following two introductory chapters, a chapter of this report has been devoted to each of these phases. Specific recommendations for implementing the methodology are provided, phase by phase, in the last chapter. Additionally, an Appendix has been devoted to each of the domains. Finally, an extensive bibliography is included to assist readers seeking further information.

In general it was found that the benchmarking methodology could be most easily applied to those domains having either a routine or engineering technology, as opposed to those involving craft or nonroutine technologies. Additionally, domains which operated in relative independence of other domains were more easily benchmarked than those involving either sequential or reciprocal relationships with other domains.

Additional complicating factors included environmental characteristics (such as regulatory requirements) and scale of operations, both of which impeded straight forward comparisons of performance.

Although the underlying methodology for benchmarking is conceptually simple, some difficulty was encountered in applying the methodology. In particular, the experiences of the 30 Sites studies suggest that four of the key assumptions underlying benchmarking must be questioned. These are (1) that best practice can be defined; (2) that best practice can be located and identified; (3) that best practice organisations will be willing to cooperate in the transmission of their competitive advantage; and (4) that best practice can be successfully transferred into one’s own organisation.

In summary, a practical methodology for benchmarking has been developed which, properly applied, will pay dividends for the Water Industry. Moreover, the opportunity exists for Industry wide cooperation with respect to selected domains. However, benchmarking practitioners may have to be content in some instances with achieving better, rather than best, practice.

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