ABenchmarking Methodology for the Australian Water Industry

ReportNo WSAA 77

May 1994




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


As aresult of a nomination and selection process overseen by the SteeringCommittee, seven domains were selected as a basis for developing and testingthe methodology. These domains, and the organisations within which the PrimeSites 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


Inaddition to these Prime Sites, two to five Reference Sites, drawn from theabove organisations and both the Brisbane City Council and the South AustralianEngineering and Water Supply Department, were established for comparativepurposes. Additionally, a limited number of non-Water Industry organisationswere identified as potential best practice sites and agreed to participate inthe project. Sydney Water Board later withdrew its Prime Site status, butcontinued to contribute to the project via Reference Sites and access to theirown independent benchmarking  project.In total 30 Sites participated in the project.


As aresult of experience gained from pilot testing a preliminary methodology atthese 30 Sites, a six-phase benchmarking methodology has been developed. Thesemajor phases are:


Phase 1:            GettingStarted

Phase 2:            SelectingBenchmarking Domains

Phase 3:            Defining andDescribing Domains

Phase 4:            SelectingBenchmarking Partners

Phase 5:            ExchangingInformation

Phase 6:            ManagingChange


Followingtwo introductory chapters, a chapter of this report has been devoted to each ofthese phases. Specific recommendations for implementing the methodology areprovided, phase by phase, in the last chapter. Additionally, an Appendix hasbeen devoted to each of the domains. Finally, an extensive bibliography isincluded to assist readers seeking further information.


Ingeneral it was found that the benchmarking methodology could be most easilyapplied to those domains having either a routine or engineering technology, asopposed to those involving craft or nonroutine technologies. Additionally,domains which operated in relative independence of other domains were moreeasily benchmarked than those involving either sequential or reciprocalrelationships with other domains.


Additionalcomplicating factors included environmental characteristics (such as regulatoryrequirements) and scale of operations, both of which impeded straight forwardcomparisons of performance.


Althoughthe underlying methodology for benchmarking is conceptually simple, somedifficulty was encountered in applying the methodology. In particular, theexperiences of the 30 Sites studies suggest that four of the key assumptionsunderlying benchmarking must be questioned. These are (1) that best practicecan be defined; (2) that best practice can be located and identified; (3) thatbest practice organisations will be willing to cooperate in the transmission oftheir competitive advantage; and (4) that best practice can be successfullytransferred into one’s own organisation.


Insummary, a practical methodology for benchmarking has been developed which,properly applied, will pay dividends for the Water Industry. Moreover, theopportunity exists for Industry wide cooperation with respect to selecteddomains. However, benchmarking practitioners may have to be content in someinstances with achieving better, rather than best, practice.


Copiesof the Report are available from WSAA, price $A50. Orders may be placed throughthe Bookshop at www.wsaa.asn.au or by email to info@wsaa.asn.au.