In these days benchmarking is recognised as an essential technique for achieving continuous improvement areas. Benchmarking allows to analyse and improve key business processes, eliminate waste, improve performance, profitability and market share.
In the other words this is strategic management method aims at improving performance and practices within an organization.
Thanks to benchmarking a company is more opened up to new methods, ideas, and tools and consequently improve their efficiency and effectiveness. What is more, thanks to benchmarking a company can learn about their own business practices and the best practice of others. It therefore requires organisations to:
• identify what they do and why they do it
• have knowledge of what the industry does and in particular what competitors do
• be fully committed to achieving best practice
Benchmarking isn't cheap either. It comes at a moderate cost to the company, but if completed successfully, it is more than worth the expense to the organization. There are three main types of cost involved in benchmarking: visit costs, time costs, and database costs. Visit costs involve travel expenses and labour time lost. Time costs involve researching, finding the best of the best, visits to the benchmarkers, and implementation of the benchmarked methods. Database costs involve initiating the benchmarks into daily organization procedures, and creating a database of best practices/companies associated with each practice being completed.
The four stages of the benchmarking process are:
1. Plan – Decide what process is to be benchmarked, who is going to be benchmarked, and how you will obtain information about the benchmarked organization.
2. Analyze - determining the ma ...