19 Benchmarking of Bid Preparation for Capital Goods B. HIRSCH, M. KROMKER, K.-D. THOBEN, A. WICKNER BIBA (Bremen Institute ofindustrial Technology and Applied Work Science) Hochschulring 20, D-28359 Bremen, E-mail: kro@biba.uni-bremen.de Abstract. This paper describes an application example (case study) for the use of benchmarking strategies. The ESPRIT project 7131 focusses on the overall improvement of the bid preparation process. Three multinational companies representing industries with products engineered-to-order benchmarked their bid preparation process against each other. The method used for enterprise modelling was IDEFO, a technique based on the SADT approach (hierarchical decomposing of processes). Applying this technology, the "as-is" situation was captured and analyzed. Both bottlenecks as well as best practices were determined. A generally applicable "to-be" situation was defined and implemented. Keywords: Benchmarking, Bid Preparation, Enterprise Modelling, IDEFO, Software Design. 1. INTRODUCTION Every day companies producing capital goods l face a serious dilemma - a potentially interesting request is presented, but to be successful a convincing, attractive, and reliable bid 2 must be prepared - and this causes costs in terms of time as well as other resources. The task may become enormously complex when all EC member countries are fused into one "home market" and - in a broader perspective - when international competition turns into a global encounter. Especially small and medium-sized companies will face difficulties in their attempts to exploit the market potential. Companies must undergo tremendous change if they are to survive, grow, and prosper in this environment. Figure 1 gives an overview of the bid-related activities. Beginning with the reception of an inquiry, a technical concept meeting customer demands must be developed. Next, the costs for realisation have to be calculated and a realistic delivery date has to be estimated. Commercial conditions including the salesprice, transport, warranty, etc. have to be fixed. Finally, all relevant information is compiled into a document - the bid - which is submitted to 1 Typical examples for capital goods are machines, robots or assembly lines - goods, companies have to invest in in order to facilitate production. 2 Synonyms, and possibly more common expressions for the word bid, are offer, quotation or tender. A. Rolstadås (ed.), Benchmarking — Theory and Practice © Springer Science+Business Media New York 1995