Benchmarking

Process

Benchmarking is the continuous process of measuring

products, service, and practices against the toughest
competition or those companies recognized as
industrial leaders.
Benchmarking is a never-ending discovery and
learning experience that identifies and evaluates best
processes and performance in order to integrate them
into an organizations present process to increase its
effectiveness, efficiency, and adaptability.

Why use benchmarking?

Benchmarking process provides a way to discover and

understand methods that can be applied to your
process to effect major improvements.
It not only tells you how good you need to and can
be, it also tells you how to change your process to get
there.

Type Of Benchmarking
Essentially, there are four generic types of
benchmarking :
1. Internal

Internal benchmarking involves looking within your own

organization to determine whether other locations are
performing similar activities and to define the best practices
observed.
This type of benchmarking is the easiest to conduct because
there are no security and/or confidentiality problems to
overcome.
Can borrow experienced personnel from other locations to
help improve your own process.

2. Competitive

Competitive benchmarking, which is also known as reverse

engineering, requires investigating a competitors products,
services, and processes.
The most common way to do this is to purchase competitive
products and services and then analyze them to identify
competitive advantages.

3. World-Class Operations

World-class operations benchmarking extends the

benchmarking process outside of the specific organization,
and its direct competition, to involve dissimilar industries.

4. Activity Type

Activity-type benchmarking is directed at process steps or

specific process activities, such as engineering change
control, order entry, invoicing, accounts payable collection,
payroll, or recruiting, and it transcends industries.

Benchmarking process involves :

Deciding what will be benchmarked

Defining the processes to compare
Developing measurements to compare
Defining internal areas, and external companies, to
benchmark
Collecting and analyzing data
Determining the gap between your process and the
best process
Developing action plans, targets, and measurement
processes
Updating the benchmarking effort

The six distinct phases of the benchmarking

process are :
1.
2.
3.
4.
5.
6.

Process design (planning)

Internal data collection
External data collection
Data analysis
Process upgrading
Periodic reassessment

The 30 steps to benchmarking results

The two major parts to the benchmarking process
include :

The internal benchmarking process, consisting of 14

potential activities
The external benchmarking process, consisting of 16
possible activities

Internal benchmarking process

Planning phase
Activity 1: identify what to benchmark
Identify what products, processes, and/or activities should be
benchmarked.

Activity 2: obtain management support

Obtain management support for the benchmark target
products, processes, and/or activities. This support must
include project approval and approved human and financial
resources.

Activity 3: develop benchmark measurements

This will involve both qualitative and quantitative data. Develop
a measurement matrix using your database.

Activity 4: determine how to collect data

Four of the most commonly used data collection methods are:
Exchange of process data, procedures, and flowcharts
Telephone interviews and surveys
Committees
Location visit