BENCHMARKING
Prepared by:
Ma. Annie Jane Caneda
Contents
- Introduction
- Definitions
- Why use benchmarking?
- Functions of benchmarking
- Types of benchmarking
- Approaches to benchmarking
- Benefits of benchmarking
- Seven steps to benchmarking
- Critical success factors
-
INTRODUCTION
What is benchmarking?
Benchmarking is a continuous process of
Comparison
• Projection
• Implementation
•
It involves:

1.
2.
3.
4.
Comparing:
Organization and its parts
Business processes Production processes
Organization's products and services
Different types of equipment
It involves:

Implementing defined best practices

Projecting future trends in best practices
and proactively leading to these trends

Meeting and exceeding
customer/consumer expectations
DEFINITION
BENCHMARKING IS:

Robert C. Camp, in his book Benchmarking - The Search for
Industry Best Practice That Lead to Superior Performance, has
defined benchmarking as
“The process of continually researching for new ideas, methods,
practices and processes, and either adopting the practices or
adapting the good features, and implementing them to obtain the
“best of the best”.
BENCHMARKING IS:

David T, Kearns, chief executive officer of Xerox Corporation,
defines benchmarking as
“The continuous process of measuring products, services, and
practices against the toughest competition or those companies
recognized as industrial leaders.”
BENCHMARKING IS:
“A systematic way to identify , understand, and evolve
superior products, services, designs, equipment,
processes, and practices to improve an organization's
real performance.”
Why use
benchmarking ?
Why use benchmarking ?

To set challenging but realistic goals

To define how goals can be accomplished

To define gaps between the organization's performance
and its competitors' performance

Because a breakthrough improvement is required to stay
competitive
Why use benchmarking ?

Because the organization is losing its market share and
needs to turn around

Because overhead costs are running too high

Because the competition's quality is much better

Because the competition is bringing product to market
much faster
Why use benchmarking ?

Because one function in the organization is trying to
impress upper management

To test the soundness of the organization's strategy

To define competitors' future strategies and resource
investment plans

Because there is a need to supplement the organization's
ideas with fresh thoughts
Why use benchmarking ?
Primary reasons

Setting goals

Identifying how the goals can be
accomplished
Functions of the
benchmarking
Functions of the benchmarking
process
Comparative analysis
(the what)
Product / system
knowledge
(the how)
Providing the "WHAT"

Without the ability to measure, you cannot control
your organization.

Obtaining quantitative data is absolutely essential in
the pursuit of becoming, and then staying, world
class.
What should be measured in the
benchmarking process?
a.
b.
c.
d.
e.
f.
How fast
How good
How much vs Where
When
How long
Size, shape, form, and fit
Use ratio measurements
To encourage free exchange of information
between organizations, it is often necessary to use
ratio measurements whenever applicable.
Providing the "HOW"

Another
real
advantage
of
the
benchmarking process is that it provides
insights into how others have become the
best.
Types of
benchmarking
Internal benchmarking

One of the easiest benchmarking
investigations is to compare operations
among
functions
within
your
own
organization.
Question no. 1

Why is it important to understand internal
processes before studying those of other
organizations?
Competitive benchmarking

Direct product or service competitors are
the most obvious to benchmark.
Functional benchmarking inve

Functional benchmarking investigates
leaders in dissimilar industries.
Generic benchmarkingve

Generic benchmarking is the purest form of
benchmarking, in that it may uncover
methods that are not implemented in the
investigator’s own industry.
APPROACHES
Approaches to benchmarking

Strategic Approaches Benchmarking

Organizatioal Approaches Benchmarking
BENEFITS
Benefits of benchmarking

Provides-a way to improve customer
satisfaction.

Helps eliminate the not-invented-here syndrome.

Includes the use or proven approaches,
methods, processes and technologies.
Benefits of benchmarking

Identifies your competitive position, strengths
and weaknesses.

Increases the effectiveness, efficiency and
adaptability of your processes.

Transforms complacency into an urgent desire
to improve.
Seven steps to
benchmarking
The seven steps to benchmarking
Benchmarking's
critical success
factors

Top management must actively lead and support
the benchmarking process.

Benchmarking must be defined correctly. It is not
just comparative analysis.


The organization must have a
comprehensive understanding of how its
item functions and performs before it
approaches benchmarking partners.
There must be a commitment to a
continuous, ongoing benchmarking effort.
Question no. 2

How are critical success factors important
in benchmarking?
Question no. 2

How are critical success factors important
in benchmarking?
Question no. 3

What is the essence of bench marking
process?
Question no. 4

Why benchmarking is important in business
in life?
Question no. 5

Is benchmarking can be just as effective for
making life decisions? Give example?
“If you know your enemy
and know yourself, you
need not fear the result
of a hundred battles.”
—Sun Tzu (500 B.C.)
Thank you!