|
 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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Forum about Benchmarking.
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Benchmarking Graphics
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The Benefits of Benchmarking
From my experience and study, I found additional to the mentioned benchmarking benefits in the summary the following lis (...)
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NEW History of Benchmarking
Bullivant divides the history of benchmarking into five periods, namely:
Phase 1 Reverse engineering (1950-1975): d (...)
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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. (...)
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The top-rated topics about Benchmarking. Here you will find the most valuable ideas and practical suggestions.
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Advanced insights about Benchmarking. Here you will find professional advices by experts.
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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 (...)
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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 (...)
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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 (...)
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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 (...)
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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.
(...)
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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 (...)
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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 (...)
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Various sources of information regarding Benchmarking. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.
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What is Benchmarking? Benchmarking
In this video (with Spanish subtitles) 5 questions about benchmarking are answered:
WHAT IS BENCHMARKING?
It is an ac (...)
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Benchmarking Introduction Explaining Benchmarking Approach and Process
Introduction into the concept of Benchmarking by Luann Stokke, including the follwoing sections:
1. Benchmarking define (...)
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