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.
BENCHMARKING FUNDAMENTALS
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).
