Benchmarking

Knowledge Center

Internal, competitive, functional, generic and collaborative benchmarking. Explanation of Benchmarking.

Contents

  1. Summary
  2. Forum
  3. Expert Tips
  4. Resources

  Print





Why register?
Log in

Benchmarking exampleBenchmarking is a systematic tool that allows a company to determine whether its performance of organizational processes and activities represent the best practices. Benchmarking models are useful to determining how well a business unit, division, organization or corporation is performing compared with other similar organizations. A benchmark is a point of reference for a measurement. The term 'benchmark' presumably originates from the practice of making dimensional height measurements of an object on a workbench using a gradual scale or similar tool, and using the surface of the workbench as the origin for the measurements.


Business benchmarking is related to Kaizen and competitive advantage thinking.

 

use of Benchmarking. Benefits

  • Improving communication
  • Professionalizing the organization / processes, or for
  • Budgetary reasons
  • In outsourcing projects

Traditionally, performance measures are compared with previous measures from the same organization at different times. Although this can be a good indication of the speed of improvement within the organization, it could be that although the organization is improving, the competition is improving faster...


Five types of Benchmarking

  1. Internal benchmarking (benchmark within a corporation, for example between business units)
  2. Competitive benchmarking (benchmark performance or processes with competitors)
  3. Functional benchmarking (benchmark similar processes within an industry)
  4. Generic benchmarking (comparing operations between unrelated industries)
  5. Collaborative benchmarking (carried out collaboratively by groups of companies (e.g. subsidiaries of a multinational in different countries or an industry organization).

Typical steps in a benchmarking process

  • Scope definition
  • Choose benchmark partner(s)
  • Determine measurement methods, units, indicators and data collection method
  • Data collection
  • Analysis of the discrepancies
  • Present the results and discuss implications / improvement areas and goals
  • Make improvement plans or new procedures
  • Monitor progress and plan ongoing benchmark.

Cost of benchmarking

There are costs to benchmarking, although many companies find that it pays for itself. The three main types of costs are:

  • Visit costs - This includes hotel rooms, travel costs, meals, a token gift, and lost labour time.
  • Time costs - Members of the benchmarking team will be investing time in researching problems, finding exceptional companies to study, visits, and implementation. This will take them away from their regular tasks for part of each day so additional staff might be required.
  • Benchmarking database costs - Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice.

Limitations of benchmarking

  • Benchmarking is a tough process that needs a lot of commitment to succeed.
  • Time-consuming and expensive.
  • More than once benchmarking projects end with the 'they are different from us' syndrome or competitive sensitivity prevents the free flow of information that is necessary.
  • Comparing performances and processes with 'best in class' is important and should ideally be done on a continuous basis (the competition is improving its processes also...).
  • Is the success of the target company really attributable to the practice that is benchmarked? Are the companies comparable in strategy, size, model, culture?
  • What are the downsides of adopting a practice?

Book: Christopher E. Bogan, Michael J. English - Benchmarking for Best Practices -

Book: Peter Bolstorff, Robert Rosenbaum - Supply Chain Excellence -

Book: Joe Zhu - Quantitative Models for Performance Evaluation and Benchmarking -




Benchmarking Forum (22 topics) Help
  Benchmarking Websites
In the past I had access to PwC's globalbestpractices.com, a product no longer offered by PwC.
They provided benchmarking reports using an exchange of information basis. Clients who participate in one of the benchmarking survey tools received re...
     
  Benchmarking in Seconday Sales in FMCG
I am trying to understand how various FMCG companies benchmark their secondary sales. Can somebody guide me?...
     
  Benchmarking Notes of Caution
1. Be sure apples are being benchmarked with apples only, and not with oranges. Believe me this is not an easy task.
2. Products are benchmarked based on their features having perceived utilities by the end beneficiary, which may not be the same...
     
  Hospital Benchmarking
If anyone have review of hospital medical record statistical performance especially in developing countries, please let me know....
     
  Benchmarking for Monopolies?
Reading through the article and the reactions I wonder what benefits a monopoly industry could achieve from benchmarking! Especially where a monopoly is not yet exposed to international competetion, unless of course forced by legislation....
     
  Conditions for Successful Benchmarking
Benchmarking is OBTAINED from the observation of other firms that are identified as the best (or sufficiently good) in the processes of interest.

Benchmarking is AIMED at improving the processes of an organization. It aims to achieve maxim...
     
  Benchmarking is One Source of Progress
Benchmarking seems to be one source of progress, it is a vision of the way to act to become the best one.
But it is always the use that the peoples do with the tools, desire of change? Desire of progress for what? With whom and why?...
     
  Airlines Benchmarking
If anybody has review of airlines organization benchmarking, please let me know.....
     
  Best Practices or Next Practices?
C.K. Prahalad says best practices take companies only so far. At best they allow firms to catch up with their competitors, but it will not make them market leaders. Prahalad, who is obviously not the biggest fan of benchmarking, advises to loo...
     
  What is Benchlearning?
Do you have any information about "benchlearning"? Thank you for your attention....
     
  IT Process Cycle Efficiency Benchmark
Does any one have an idea for the benchmark 'Process Cycle Efficiency in IT Processes' (specifically the ITIL change management process). Thanks for your comment!...
     
  Benchmarking Benefits
From my experience and study, I found additional to the mentioned benefits the following list of benchmarking advantages:
1. Define the price per unit of the product / service.
2. Use results to improve your organization strategy.
     
  Benchmark in Value Chain Analysis
Benchmarking is a framework based on recommendations from the findings. This is a tool that can help to evaluate the action plan from time to an other. By benchmarking, you can know whether an institution is stagnant or dynamic....
     
  The Role of Benchmarking in Production vs. Quality
I'm in charge of both production and quality in my company. Given that those two functions are usually in collision, how can benchmarking help me to manage both functions efficiently without antagonism?...
     
  Benchmarking in Sailing
I'm trying to do benchmarking in sailing, it's the first time that my country is working in this project therefore I need some useful information in this matter. Is there anybody who can help me?...
     
  Benchmarking is a Reference Point
The way I see it, benchmarking is a reference point that is used as a comparison to everything that follows. If there is a new process in manufacturing and an audit it to be administered, then the first one becomes the benchmark to where all others a...
     
  How should I put together a Peer Group?
How do I determine the right companies to compose a Peer Group... Does anybody have an approach or criteria?...
     
  Benchmarking in Community service
I would like to know how best benchmarking can be used in community service by various related companies...
     
  Benchmarking and Quality (ISO 9001)
Hello, I am looking for information about the relation between benchmarking and quality. Is Benchmarking useful in a ISO9001 quality certification process? Thanks for your comments that will help me....
     
  Japanese Benchmarking: DANTOTSU
A Japanese word related to benchmarking is: DANTOTSU. It means: The way to be the best out of the bests....
     



Benchmarking Special Interest Group


Special Interest Group

Benchmarking Education & Events


Find Trainings, Seminars and Events


Expert Tips - Benchmarking Premium
  Top 20 Benchmarking Mistakes - Checklist of Things to Avoid
 
  How to Avoid Subjectivity in Benchmarking - How to Correct for Environmental Factors
 
  3 Crucial Elements for Benchmarking - Things to Remember when Planning Benchmarking
 
  Avoiding Cognitive Biases During Benchmarking - Benchmarking Best Practice
 
  How to Select the Benchmarking Team - Benchmarking Implementation
 
  The Benchmarking Applications and Categories - What can be Benchmarked?
 
  Avoiding Cognitive Biases During Benchmarking - Classical Example
 

Resources - Benchmarking Premium
Benchmarking Introduction - Explaining Benchmarking Approach and Process
 

News - Benchmarking Method

     
 

News - Benchmarking Performance

     
 

Videos - Benchmarking Method

     
 

Videos - Benchmarking Performance

     
 

Presentations - Benchmarking Method

     
 

Presentations - Benchmarking Performance

     
 

More - Benchmarking Method

     
 

More - Benchmarking Performance

     

Compare with: SWOT Analysis  |  Strategy Dynamics  |  Malcolm Baldrige Award  |  Game Theory  |  Industry Change  |  Outsourcing  |  CSFs and KPIs  |  Operations Research  |  Relationship Marketing  |  Value Engineering


Return to Management Hub: Decision-making & Valuation  |  Finance & Investing  |  Human Resources  |  Marketing  |  Strategy  |  Supply Chain & Quality


More Management Methods, Models and Theory

Sponsor
Sponsor this knowledge center

Special Interest Group Leader
Would you like to be our Benchmarking SIG Leader?

All you need to know about management

12manage for:



Management Smart Card

12manage in:





Copyright 2014 12manage - The Executive Fast Track. V12.0 - Last updated: 19-9-2014. All names tm by their owners.