Benchmarking

What is benchmarking?

Benchmarking is a strategic management tool that allows the company to set goals and measure productivity based on best industry practices. It is a practice in which the level of quality is used as a reference point to evaluate things through comparison.

The process helps in comparing and measuring the processes, programs, strategies and performance metrics with the standard measurements or with other similar companies. It involves the analysis of three important dimensions:

• Quality
• Time
• Costs

It is a useful technique to improve the performance of the company by identifying and implementing the best processes and practices to achieve these goals. The process includes the repeated evaluation of the performance aspects with the similar measurements of its peers, the identification of the gaps, the discovery of new methods to close gaps and also the excellence of the condition so that the gaps can be positive for the organization.

Types of benchmarking

1. Internal Benchmarking: When measurements and comparisons of key operations are made between teams, groups, and individuals within the organization, the Benchmarking As intern.
2. External Benchmarking: When the measurement and comparison of key operations with competitors is performed, it is referred to as an external Benchmarking.
   In addition, the process is called:

• Process-Benchmarking
• Performance-Benchmarking
• Strategic Benchmarking
• Application of Benchmarking

The process also involves gathering impressions from outside the organization and examining what others are doing to optimize their performance levels and the processes they use. Thus, the approach helps determine the processes behind exceptional performance. It can be used in the following areas:

• Human Resources Management
• Product development
• Product sales
• Maintenance
• Plant utilization
• Customer service
• Identification of the need for Benchmarking
• Understanding of existing processes and practices
• Obtain top management support and approval.
• Identification of best practices.
• Comparison of the company's processes and services with those of competitors.
• Preparation of a report on the differences between measured and actual results.
• Implement necessary steps to close performance gaps.
• Evaluation and review

Benchmarking does not provide the solution to many problems, but analyzes the situations and processes and helps to improve performance. It is a continuous improvement process. Therefore the Benchmarking-exercises are appropriately applied and regularly performed to achieve competitive advantage and improve performance in key business areas. In this process, a company's key activities are measured and compared with competitors and recognized industry leaders.