The Concept of Benchmarking

Benchmarking is aboriginal and foremost a apparatus for improvement, accomplished through allegory with alternative organizations recognised as the best aural the area. In this affiliate we will present some axial definition, altered blazon of benchmarking, and the action for application benchmarking. We do additionally try to position benchmarking I affiliation to alternative affection and advance accoutrement in use in the alignment as able-bodied as action and cardinal planning. Pre-condition for application benchmarking are additionally reviewed. (Andersen, et al., 1996)

BENCHMARKING DEFINITIONS

Somewhat philosophically, benchmarking can be authentic as follow:

Benchmarking is the convenance of actuality apprehensive abundant to accept that addition abroad is bigger at something, and actuality astute abundant to apprentice how to bout and alike beat them as it (APQC, 1993) (Andersen, et al., 1996)

A criterion is a abstinent -“best-in-class” accomplishment recognised as the accepted of arete for that business process. (APQC, 1993), (Andersen, et al., 1996)

The aboriginal acceptation of the chat is: A predefined position, acclimated as a advertence point for demography measures against.

There are several altered theories about breadth the chat criterion absolutely comes from. One of them claims it to arise from bounded surveying, breadth a criterion is a topological advertence point in the terrain. The position of alternative credibility is accustomed with advertence to this benchmark. (Andersen, et al., 1996)

Another approach says that the chat comes from the auction of fabrics, breadth the food usually had, and alternative still have, a adjudicator sunk into the adverse to admeasurement the bulk of fabric. Thus, the agent took measures adjoin a benchmark. (Andersen, et al., 1996)

A third one claims that criterion comes from fishing contests. The admeasurement of the angle is compared through agreement the angle on a bank and barometer the breadth of it by application a knife to accomplish a mark in the bench. When the abutting angle is put on the bench, one can calmly see whether its admeasurement matches the antecedent ones (Andersen, et al., 1996)

Operational analogue of benchmarking.

Many bodies see benchmarking alone as a adjustment for comparing key figures, actual generally financial, for the purpose of appearance a aggregation adjoin competitors or an industry standard. We would acerb like to emphasise that this is a far too bound appearance of benchmarking. Benchmarking ability accept been acclimated this way earlier, but is today a far added able tool. Do therefore, please, beam the credibility fabricated by the arrows in the analogue above:

  • The purpose of a benchmarking abstraction is not alone comparing for the auction of evaluation, but acquirements for accomplishing improvement.
  • One does not analyze alone key figures, although achievement measures are an important aspect in the comparison. Processes, i.e. how tasks are performed, are the axial aspect in the comparison.
  • By attractive at how those who are bigger accomplish their processes, one can apprentice from the companies that accept already accomplished a college achievement akin than oneself.
  • The acquirements efforts are not bound to advice attainable from competitors. It is rather encouraged to booty an alien view, gluttonous the best companies, behindhand of industry.
  • Benchmarking is not some left-hand assignment that one hires a adviser to do. Benchmarking should be done according to a structured process, breadth one cocky harvests the acquirements effects. (Andersen, et al., 1996)

DIFFERENT TYPES OF BENCHMARKING

Benchmarking is about comparing a aggregation with alternative companies. One can analyze the aggregation on a accomplished or one can analyze processes, function, products, etc. altered types of benchmarking can be ascertain based on what is compared and whom it is comparing against.

Compare what?

  • Performance benchmarking;
  • Process benchmarking;
  • Strategic benchmarking;

Compare adjoin whom

  • Internal benchmarking;
  • Competitive benchmarking;
  • Functional benchmarking;
  • Generic benchmarking

(Andersen, et al., 1996)

Benchmarking of what?

Three types of benchmarking can be define, depending on what is actuality compared:

  • Performance benchmarking is allegory of achievement measures (often financial, but additionally operational), for the purpose of free how acceptable one”s own aggregation is compared to others.
  • Process benchmarking is allegory of methods and convenance for assuming business processes, for the purpose of acquirements from the best to advance one”s own processes.
  • Strategic benchmarking is allegory of the cardinal choices and disposition fabricated by alternative companies, for the purpose of accession advice to advance one”s own cardinal planning and positioning. (Andersen, et al., 1996)

When Xerox launched benchmarking in the aboriginal 1970s, it was mainly acclimated for two purposes;

  • To -“wake up” the alignment and appearance that advance were necessary.
  • To actuate the alignment for advance and to appearance that improvements could be fabricated (by apropos to others who had fabricated it). (Andersen, et al., 1996)

Later, one has realised that too abundant focus on achievement measures (performance benchmarking) gives little advice about how to advance or abutting the gap to the partner. This ability generally advance to the three D”s of benchmarking; disbelief, denial, and despair. One does not accept the presented after-effects from the comparisons (disbelief), one denies the after-effects by claiming that the companies are not commensurable (denial), and one gets paralysed and clumsy to act because one does not apperceive how to bolt up with the competitors (despair). (Andersen, et al., 1996)

If learning, motivation, and advance are to be the aftereffect of a benchmarking study, it requires that the causes for the achievement gap are the focus of attention. The action itself has to be analysed, not alone the measures (process benchmarking).

A business action can be authentic as;

  • A alternation of logically connected, repetitive activities; that
  • Makes use of the organization”s resources; to
  • Refine an article (physical or mental); with the cold of bearing authentic and assessable results/products; for
  • Internal or alien customers.

(Andersen, et al., 1996)

Benchmarking adjoin whom?

Four types of benchmarking can be defined, depending on whom one compares against;

  • Internal benchmarking is allegory amid departmental, units, subsidiaries, or countries aural the aforementioned aggregation organisation.
  • Competitive benchmarking is absolute allegory of own achievement /results adjoin the best absolute competitors. i.e., those accomplish the aforementioned artefact or bear the aforementioned service.
  • Financial benchmarking is allegory of action or action adjoin non-competitor companies aural the aforementioned industry or abstruse area.
  • Generic benchmarking is allegory of own processes adjoin the best processes around, behindhand of industry. (Andersen, et al., 1996)

Internal benchmarking – A bendable start

Internal benchmarking is mainly acclimated aural ample corporations breadth altered units are evaluated and compared to anniversary other. If one assemblage performs bigger than the others, practices can be transferred internally for improvement. The advantages of centralized benchmarking are that it is generally attainable to ascertain commensurable processes, abstracts and advice are calmly accessible, and generally on a accepted format. (Andersen, et al., 1996)

Competitive benchmarking – A acute breadth

Competitive benchmarking is an addendum of adversary assay breadth instead of absorption on the industry average, focus is on the best competitors. Due to problems apropos administration of acute advice amid competitors and the acknowledged and ethical limitations affiliated to this blazon of benchmarking, aggressive benchmarking is generally apparent as apparent and too focused on key figures. (Andersen, et al., 1996)

Functional benchmarking – To apprentice from your closest

In anatomic benchmarking, benchmarking ally can be customers, suppliers, or alternative companies aural the aforementioned industry or abstruse area. It is alternative attainable to get in blow with such companies and the problems adverse these companies are generally agnate (Andersen, et al., 1996)

Generic benchmarking – Exercise in adroitness

Finding companies in absolutely different industries that accomplish agnate processes as one ability sometimes crave a solid allocation of creativity. The aforementioned goes for appointment ability for one industry to another. Still, the abeyant for anecdotic new technologies or practise that will advance to breakthroughs is accomplished in all-encompassing benchmarking. One archetype is the advance of bar coding from industry to industry. (Andersen, et al., 1996)

THE CORE OF BENCHMARKING

Benchmarking basically has four capital attractions;

  • Benchmarking helps the organisation accept and advance a analytical attitidue to its own business processes
  • Benchmarking promotes an alive action of acquirements in the aggregation an motivates change and improvements
  • Through benchmarking, the aggregation can acquisition sources for advance and new means of accomplishing things alfresco their own organisation.
  • Through benchmarking, advertence credibility for barometer the achievement of the company”s business action are established.(Andersen, et al., 1996)

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