Benchmarking

Knowledge Center

• About
• Home
• Dictionary
• Encyclopedia
• Question?
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

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

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

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 Special Interest Group Special Interest Group (690 members)

Benchmarking Forum   Recent topics   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 ...           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...           Upgrade to ISO9001:2015 from ISO9001:2008 I own a ISO 9001:2008 company and want to upgrade it from 9001:2008 to 9001:2015. I need to do an internal audit for it. I want to know how can I upgr...           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 m...           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). Thank...           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 ...           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 Graphics Performing a benchmark basically means comparing your organization with other organizations and acting on the difference. What graphics do you pr...           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...           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...           Benchmarking in Community service I would like to know how best benchmarking can be used in community service by various related companies...           Benchmarking Benefits From my experience and study, I found additional to the mentioned benefits the following list of benchmarking advantages: 1. Define the pr...           What is Benchlearning? Do you have any information about "benchlearning"? Thank you for your attention....           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...           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...

Best Practices - Benchmarking   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...           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 ...           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 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 peopl...           Airlines Benchmarking If anybody has review of airlines organization benchmarking, please let me know.....           Hospital Benchmarking If anyone have review of hospital medical record statistical performance especially in developing countries, please let me know....           Japanese Benchmarking: DANTOTSU A Japanese word related to benchmarking is: DANTOTSU. It means: The way to be the best out of the bests....           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...           Advantages Generic Benchmarking Comparing processes between unrelated industries (Generic Benchmarking) offers the following two advantages for a firm: 1. Possibility to impleme...

Expert Tips - Benchmarking   Top 20 Benchmarking Mistakes       How to Avoid Subjectivity in Benchmarking       3 Crucial Elements for Benchmarking       Avoiding Cognitive Biases During Benchmarking       How to Select the Benchmarking Team       The Benchmarking Applications and Categories       Avoiding Cognitive Biases During Benchmarking

Resources - Benchmarking What is Benchmarking?   Benchmarking Introduction     News about Benchmarking Method         News about Benchmarking Performance         Videos about Benchmarking Method         Videos about Benchmarking Performance         Presentations about Benchmarking Method         Presentations about Benchmarking Performance         Books about Benchmarking Method         Books about Benchmarking Performance         More about Benchmarking Method         More about 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