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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

Special Interest Group

Benchmarking Special Interest Group.

Special Interest Group
Special Interest Group (713 members)


Forum discussions about Benchmarking. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.

topic Japanese Benchmarking: DANTOTSU
A Japanese word related to benchmarking is: DANTOTSU. It means: The way to be the best out of the bests....
topic Advantages Generic Benchmarking
Comparing processes between unrelated industries (Generic Benchmarking) offers the following two advantages for a firm: 1. Possibility to implement a leading practice from another industry into its o...
topic 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 of a hundred battles. Sun Tzu c. 544—496 BC, Militai...
topic Benchmarking Graphics
Performing a benchmark basically means comparing your organization with other organizations and acting on the difference. What graphics do you prefer to do the comparison? In industry benchmarking o...
topic 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 upgrade my ISO certification and what new modules have...
Comments6 comments
topic 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 antagonis...
Comments3 comments
topic 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?...
Comments3 comments
topic 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 institu...
topic The Benefits of Benchmarking
From my experience and study, I found additional to the mentioned benchmarking benefits in the summary the following list of benchmarking advantages: 1. Define the price per unit of the product / ser...
topic What is Benchlearning?
Do you have any information about "benchlearning"? Thank you for your attention....
Comments3 comments
🔥 History of Benchmarking
Bullivant divides the history of benchmarking into five periods, namely: Phase 1 Reverse engineering (1950-1975): dissecting products from the competition in order to identify technical improvements ...
topic Websites Offering Benchmark Information
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 on...
Comments1 comments
topic 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!...
topic 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 get data? Most used systems are: - Custom-made be...
topic 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?...
Comments1 comments
topic 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 fir...
Comments2 comments

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Best Practices

The best, top-rated topics about Benchmarking. Here you will find the most valuable ideas and practical suggestions.

🥇 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 ...
Comments1 comments

🥈 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 ...
Comments31 comments

🥉 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, u...
Comments1 comments

topic 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...
Comments2 comments

topic 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 prog...
topic Airlines Benchmarking
If anybody has review of airlines organization benchmarking, please let me know.....
Comments3 comments

topic Hospital Benchmarking
If anyone have review of hospital medical record statistical performance especially in developing countries, please let me know....
Comments1 comments

topic 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....
Comments3 comments

Expert Tips

Advanced insights about Benchmarking. Here you will find professional advices by experts.


Top 20 Benchmarking Mistakes

Checklist of Things to Avoid
Below follows a list that I assembled of the most crucial benchmarking errors: 1. Not having concrete goals and objecti...

How to Avoid Subjectivity in Benchmarking

How to Correct for Environmental Factors
The issue about best practices is that they're subjective given that organizations operating within the same industry ar...

3 Crucial Elements for Benchmarking

Things to Remember when Planning Benchmarking
Benchmarking is a continuous, systematic process for evaluating the products, services and work processes of organizatio...

Avoiding Cognitive Biases During Benchmarking

Benchmarking Best Practice
To discover correctly what makes a business successful one has to look at BOTH thriving AND floundering companies to spo...

How to Select the Benchmarking Team

Benchmarking Implementation
One of the most important elements in the preparation phase of a benchmark is the selection of the benchmarking team. ...

The Benchmarking Applications and Categories

What can be Benchmarked?
You can benchmark any function or characteristic that you can observe or measure. Typically, the main categories used in...

Avoiding Cognitive Biases During Benchmarking

Classical Example
During World War 2 the statistician A. Wald was assessing the vulnerability of airplanes to enemy fire. All the availabl...
Information Sources

Various sources of information regarding Benchmarking. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


What is Benchmarking?

In this video (with Spanish subtitles) 5 questions about benchmarking are answered: WHAT IS BENCHMARKING? It is an ac...

Benchmarking Introduction

Explaining Benchmarking Approach and Process
Introduction into the concept of Benchmarking by Luann Stokke, including the follwoing sections: 1. Benchmarking define...

Research Links

Jump to further research sources regarding Benchmarking.













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