|
 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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Special Interest Group (687 members)
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Recent topics
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 Benchmarking Approaches
Processing a benchmark often means investing a lot of time in getting relevant data and determining the best practices. What approaches do you use to ...
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Benchmarking Graphics
Performing a benchmark basically means comparing your organization with other organizations and acting on the difference.
What graphics do you pr...
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 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 ...
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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...
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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 ...
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Airlines Benchmarking
If anybody has review of airlines organization benchmarking, please let me know.....
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All you need to know about management
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Hospital Benchmarking
If anyone have review of hospital medical record statistical performance especially in developing countries, please let me know....
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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 pro...
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Advantages Generic Benchmarking
Comparing processes between unrelated industries (Generic Benchmarking) offers the following two advantages for a firm:
1. Possibility to impleme...
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Benchmarking Quotes and Proverbs
Here's a first quotation related to Benchmarking, let's collect them here:
If you know the enemy and know yourself, you need not fear the results...
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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...
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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 exchan...
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Benchmarking Benefits
From my experience and study, I found additional to the mentioned benefits the following list of benchmarking advantages:
1. Define the pr...
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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 manufacturin...
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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 t...
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