Benchmarking

Benchmarking is a process used in management and particularly strategic management, in which businesses use industry leaders as a model in developing their business practices. This involves determining where you need to improve, finding an organization that is exceptional in this area, then studying the company and applying it's best practices in your firm. Benchmarking systematicly studies the absolute best firms, then uses their best practices as the standard of comparison, a standard to meet or even surpass.

Benchmarking recognizes that no company is exceptional at everything. That is why it is an ongoing process involving firms from any industry and any country. It is not a one-shot event. There is no room for complacency. Benchmarking requires that you constantly search for better solutions. If you continuosly search for best practices in the best firms around the world, you should become an exceptional company.

Every function and task of your business can be benchmarked, from production, to marketing, to purchasing, to information technology management, to customer service.

Procedure

1) Identify your problem areas - Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as Focus groups; or indepth marketing research, quantitative research, surveys, questionnaires, reengineering analysis, quality control variance reports, or financial ratio analysis.

References

• Camp, R. (1989) Benchmarking: The search for industry best practices that lead to superior performanceAmerican Societry for Quality Control, Quality Press, Milwaukee, Wis. 1989.