Benchmarking
INTRODUCTION
“Benchmarking is a way to go backstage and watch another company’s performance
From the wings, where all the stage tricks and hurried realignments are visible”
Method of improving business performance by learning from others.
2
BENCHMARKING: WHAT IS IT?
Main emphasis is not on “best performance” but on improving a given business operation or a process by exploiting “best practices”
“Benchmarking is a process of identifying, understanding and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance”
- American productivity and quality centre
3
EVOLUTION
Time
Type
Description
First generation Reverse engineering Discovering the technological principles of a device, object of system through the analysis of its structure, function and operation
Second generation Competitive benchmarking Comparison of firm practices and performance measures with most successful competitor(s)
4
Third generation Process benchmarking Initiating firm focuses on its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmarked firms
Fourth generation Strategic benchmarking Observing how other compete
Fifth generation Global benchmarking Benchmarking with partners across the globe
5
ADVANTAGES
How well are we performing compared to other companies?
What are best practices?
What improvement opportunities should we focus on?
Identify current position of business
Allowing comparisons with previous benchmarking profiles and against recognised best practices
Encourage regular monitoring of progress
Increasing the competitiveness of organisation
6
TYPES
Strategic benchmarking
Used where business need to improve overall performance by examining long term strategies and general approaches
Performance benchmarking or competitive benchmarking
Used when organization consider their positions
“Benchmarking is a way to go backstage and watch another company’s performance
From the wings, where all the stage tricks and hurried realignments are visible”
Method of improving business performance by learning from others.
2
BENCHMARKING: WHAT IS IT?
Main emphasis is not on “best performance” but on improving a given business operation or a process by exploiting “best practices”
“Benchmarking is a process of identifying, understanding and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance”
- American productivity and quality centre
3
EVOLUTION
Time
Type
Description
First generation Reverse engineering Discovering the technological principles of a device, object of system through the analysis of its structure, function and operation
Second generation Competitive benchmarking Comparison of firm practices and performance measures with most successful competitor(s)
4
Third generation Process benchmarking Initiating firm focuses on its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmarked firms
Fourth generation Strategic benchmarking Observing how other compete
Fifth generation Global benchmarking Benchmarking with partners across the globe
5
ADVANTAGES
How well are we performing compared to other companies?
What are best practices?
What improvement opportunities should we focus on?
Identify current position of business
Allowing comparisons with previous benchmarking profiles and against recognised best practices
Encourage regular monitoring of progress
Increasing the competitiveness of organisation
6
TYPES
Strategic benchmarking
Used where business need to improve overall performance by examining long term strategies and general approaches
Performance benchmarking or competitive benchmarking
Used when organization consider their positions