TABLE OF CONTENTS
2. WHAT IS BENCHMARKING?
3. TYPES OF BENCHMARKING AND LİMİTATİONS
4. COSTS İN BENCHMARKİNG
5. CRITICISMS OF BENCHMARKING
6. ETHICAL PRACTICES CONCERNING BENCHMARKING
7. XEROX CORPORATION
It is often stated that those who benchmark do not have to reinvent the wheel. By following others one can make improvements and not focus on stale ideas. Benchmarking at first glance may be mistaken for a copycat form of developing strategic plans and for making improvements within an organization. This is not true. Benchmarking is a process that allows organizations to improve upon existing ideas. In order to eliminate myths and misconceptions about benchmarking it is important to know exactly what benchmarking is, the different types of benchmarking, the criticisms of benchmarking, and the ethical practices concerning benchmarking.
2. WHAT IS BENCHMARKING?
“Benchmarking is simply the process of measuring the performance of one's company against the best in the same or another industry”.Benchmarking is not a complex concept but it should not be taken too lightly. Benchmarking is basically learning from others. It is using the knowledge and the experience of others to improve the organization. It is analyzing the performance and noting the strengths and weaknesses of the organization and assessing what must be done to improve. The knowledge that is available for comparing operations and processes are vast. “An organization’s ability to evaluate its practices against specific business strategies and objectives is critical to leveraging its knowledge capital” Information is there for organizations and it should be evaluated, used, and shared. This is one of the primary goals of benchmarking. It is the process of using all of the knowledge and experience of others to develop new and fresh ideas. This is basic teamwork, which is the way progressive organizations are migrating. Many organizations are realizing how much more can be achieved if there is more collaboration between leaders in an industry.
Benchmarking is the process of determining who is the very best, who sets the standard, and what that standard is. In baseball, you could argue that seven consecutive World Series Championships made the New York Yankees the benchmark. If we were to benchmark "world conquest", what objective measure would we use to compare Julius Caesar to Adolph Hitler; Gengis Khan to Napoleon? Which of them was the epitome, and why? We do the same thing in business. Who is the best sales organization? The most responsive customer service department? The leanest manufacturing operation? And how do we quantify that standard?
There are three reasons that benchmarking is becoming more commonly used in industry .
Benchmarking is a more efficient way to make improvements. Managers can eliminate trial and error process improvements. Practicing benchmarking focuses on tailoring existing processes to fit within the organization.
Benchmarking speeds up organization’s ability to make improvements. In corporate America today, time is of the essence.
Benchmarking has the ability to bring corporate America's performance up as a whole significantly. If every organization has excellent production and total quality management skills then every company will have world class standards.
Benchmarking is not just making changes and improvements for the sake of making changes, benchmarking is about adding value. No organization should make changes to their products, processes, or their organization if the changes do not bring benefits. When using benchmarking techniques, an organization must look at how processes in the value chain are performed :
1. Identifying a critical process that needs improvement.
2. Identify an organization that excels in the process,...