Benchmarking is a technique of identifying, comparing and adapting the best business procedures and best practices from different Organizations who are successful in following such practices. If best practices are yielding business growth and prosperity in other Organizations, there should be no reason to adapt these practices in our own Organization.
However, it is to be noted that Benchmarking is not exactly "copying" other Organizational procedures, but to fit in the business model and philosophy into our own business taking into consideration our Organizational culture.
What is the necessity of Benchmarking?
Benchmarking becomes necessary in Organizations for the following reasons:
- Pressure to lower prices of your product which is Customer and market driven
- Cut-throat competition in today's businesses when every competitor wants to keep its nose ahead of other similar product or service companies
- Pressure to shorten the lead time to supply to the Customers
- Lower Organizational growth and performance as may be found from self assessments or management system audits
- Lower Technology compared to similar such Organizations can also lead to Organizations seriously think on "benchmarking" best technologies and technological practices
Benchmarking Process:
The steps involved in Benchmarking are as below:
- Identify what needs to be benchmarked. For example, its it cost, delivery time, quality practice, technology, etc.
- Once the benchmark metric is identified, then research Organizations who are successful in achieving this measure or metric. Also research the best practices followed by those Organizations
- Learn about the best practices and train internally
- Plan the implementation of best practices
- Implement and monitor the best practices
- Measure post implementation metric and improve
