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Benchmarking is an ongoing investigation and learning experience. It ensures that the best practices are uncovered, adopted, and implemented. Benchmarking is a process of industrial research that enables managers to perform company-to-company comparisons of processes and practices to identify the "best of the best" and to attain a level of superiority or competitive advantage.

Benchmarking is a method of establishing performance goals and quality improvement projects based on industry best practices. It is one of the most exciting new tools in the quality field. Searching out and emulating the best can fuel the motivation of everyone involved, often producing breakthrough results.

The Japanese word dantotsu - striving to be the best of the best - captures the essence of benchmarking. It is a positive, proactive process to change operations in a structured fashion to achieve superior performance. The purpose of benchmarking is to gain competitive advantage.

Benchmarking: Definition. The formal definition of benchmarking is "The continuous process of measuring products, services, and practices against the company's toughest competitors or those companies renowned as industry leaders."

Benchmarking: Objectives. The purpose of benchmarking is derived primarily from the need to establish credible goals and pursue continuous improvement. It is a direction-setting process, but more important, it is a means by which the practices needed to reach new goals are discovered and understood.

Benchmarking legitimizes goals based on an external orientation instead of extrapolating from internal practices and past trends. Because the external environment changes so rapidly, goal setting, which is internally focused, often fails to meet what customers expect from their suppliers.

Customer expectations are driven by the standards set by the best suppliers in the industry as we as by great experiences with suppliers in other industries. Thus, the ultimate benefit of benchmarking is to help achieve the leadership performance levels that fully satisfy these ever-increasing customer expectations.

Benchmarking is an important ingredient in strategic planning and operational improvement. To remain competitive, long-range strategies require organizations to adapt continuously to the changing marketplace. To energize and motivate its people, an organization must:

  • Establish that there is a need for change
  • Identify what should be changed
  • Create a picture of how the organization should look after the change

Benchmarking achieves all three. By identifying gaps between the organization and the competition, benchmarking establishes that there is a need. By helping understand how industry leaders do things, benchmarking helps identify what must be changed. And by showing what is possible and what other companies have done, benchmarking creates a picture of how the organization should look after the change.


Embarking on a benchmarking activity requires acceptance of the following fundamentals:

  • Know the operation. Assess strengths and weaknesses. This should involve documentation of work process steps and practices as well as a definition of the critical performance measurements used.
  • Know industry leaders and competitors. Capabilities can be differentiated only by knowing the strengths and weaknesses of the leaders.
  • Incorporate the best and gain superiority. Adapt and integrate these best practices to achieve a Leadership position (Juran and Godfrey, 1999).
  Figure 1: The formal 10-step benchmarking process (Quality Resources, a division of The Kraus Organizational Limited, White Plains, NY throught ASQC Quarterly Press)

* Juran, Joseph M. and Godfrey, A. Blanton. Juran's Quality Handbook. McGraw-Hill. 1999.

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Revision Date June 5, 2008