Benchmarking is a way of discovering what is the best performance being achieved – whether in a particular company, by a competitor or by an entirely different industry. This information can then be used to identify gaps in an organization's processes in order to achieve a competitive advantage.
Benchmarking is a process for obtaining a measure – a benchmark. Simply stated, benchmarks are the “what,” and benchmarking is the “how.” But benchmarking is not a quick or simple process tool. Before undertaking a benchmarking opportunity, it is important to have a thorough understanding of the company’s guidelines. Some companies have strict guidelines as to what information can be gathered, and whom practitioners can contact to get that information. Depending on the size of the company, practitioners may be surprised at what is readily available in-house.
Benchmarking is not just a matter of making inquiries to other companies or touring and documenting another company’s facilities or processes. When making use of benchmarking, a company should not limit the scope to its own industry, nor should benchmarking be a one-time event.
Primary Classifications of Benchmarking
Although there are many forms of benchmarking, they can be classified into three categories – internal, competitive and strategic.
Internal benchmarking is used when a company already has established and proven best practices and they simply need to share them. Again, depending on the size of the company, it may be large enough to represent a broad range of performance (i.e., cycle time for opening new accounts in branches coast to coast). Internal benchmarking also may be necessary if comparable industries are not readily available.
Competitive benchmarking is used when a company wants to evaluate its position within its industry. In addition, competitive benchmarking is used when a company needs to identify industry leadership performance targets.
Strategic benchmarking is used when identifying and analyzing world-class performance. This form of benchmarking is used most when a company needs to go outside of its own industry. Six Sigma often uses Hoshin to ensure that all employees are knowledgeable about the strategic direction for the company. Within a company’s Hoshin plan, goals are established relative to benchmarks set by world-class organizations. Often, these benchmarks are obtained from outside industries.
The benchmarking methodologies can be deployed in agreement with the nature of the business and the information needed. We typically follow the below process and call it (I . D . E . A . S)
Identify : The problem areas
Define : Industries with alike processes
Experience : Understand the leaders in the respective areas
Analyze : Conduct surveys to identify measures and best practices
Solution : Recommending and implementing strategic plans for improvement
We offers a benchmarking solution for each and every domain, whether you need a program for continuous improvement, an instant report, detailed peer group benchmark, or simply data to perform your own in-house benchmarking analysis, we provide all.