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Benchmarking is
a systematic comparison of organizational processes and performance to
create new standards or to improve processes. Benchmarking models
are used to determining how well a business unit, division, organization or
corporation is performing compared with other similar organizations. A Benchmark is often used for
improving communication, professionalizing the organization / processes or
for budgetary reasons. Traditionally, performance
measures have been compared with previous measures from the same
organization at different times. Although this can be a good indication of
the rate of improvement within the organization, it could be that although
the organization is improving, the competition is improving faster.
There are four types
of benchmarking methods:
1.
internal (benchmark
within a corporation, for example between business units)
2.
competitive (benchmark performance or processes with competitors)
3.
functional (benchmark similar processes within an industry)
4.
generic (comparing
operations between unrelated industries)
Typically,
benchmarking models involves the following steps:
- 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.
Benchmarking
is a tough process that needs a lot of commitment to succeed. 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. However 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...).
Historically, benchmarking is based on
Kaizen and
competitive advantage
thinking.
Book: Christopher E. Bogan, Michael J. English -
Benchmarking for Best Practices: Winning Through Innovative Adaptation - 
Book: Peter Bolstorff, Robert Rosenbaum - Supply Chain
Excellence: A Handbook for Dramatic Improvement Using the SCOR Model -
Book:
Joe Zhu -
Quantitative Models for Performance Evaluation and Benchmarking: Data
Envelopment Analysis With Spreadsheets and Dea Excel Solver -
Find more in the Benchmarking Forum on the 12manage website.
Compare also:
SWOT analysis |
Malcolm Baldrige Award |
Game Theory |
Industry
Change | Outsourcing
| Operations Research
More management methods
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