|
 Benchmarking
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
- Internal benchmarking (benchmark within a corporation, for example
between business units)
- Competitive benchmarking (benchmark performance or processes
with competitors)
- Functional benchmarking (benchmark similar processes within an
industry)
- Generic benchmarking (comparing operations between unrelated
industries)
- 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 -
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Benchmarking Special Interest Group
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Benchmarking Education & Events
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Top 20 Benchmarking Mistakes
Below follows a list that I assembled of the most ...
Usage (application): Checklist of Things to Avoid
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How to Avoid Subjectivity in Benchmarking
The issue about best practices is that they're sub...
Usage (application): How to Correct for Environmental Factors
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3 Crucial Elements for Benchmarking
Benchmarking is a continuous, systematic process f...
Usage (application): Things to Remember when Planning Benchmarking
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Avoiding Cognitive Biases During Benchmarking
To discover correctly what makes a business succes...
Usage (application): Benchmarking Best Practice
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How to Select the Benchmarking Team
One of the most important elements in the preparat...
Usage (application): Benchmarking Implementation
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The Benchmarking Applications and Categories
You can benchmark any function or character...
Usage (application): What can be Benchmarked?
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Avoiding Cognitive Biases During Benchmarking
During World War 2 the statistician A. Wald was as...
Usage (application): Classical Example
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What is Benchmarking?
In this video (with Spanish subtitles) 5 questions...
Usage (application): Benchmarking
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Benchmarking Introduction
Introduction into the concept of Benchmarking by L...
Usage (application): Explaining Benchmarking Approach and Process
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News about Benchmarking Method
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News about Benchmarking Performance
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Videos about Benchmarking Method
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Videos about Benchmarking Performance
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Presentations about Benchmarking Method
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Presentations about Benchmarking Performance
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More about Benchmarking Method
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More about Benchmarking Performance
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Compare with: SWOT Analysis
| Strategy Dynamics
| Malcolm Baldrige Award |
Game Theory |
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Special Interest Group Leader
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Tonnis van Dam