BENCHMARKING

OBJECTIVES

To Improve Effectiveness of Organisation

Processes
To Enhance Product Quality & Performance

What is Benchmarking ?
"Improving ourselves by learning from others".
"Benchmarking is a continuous, systematic process for
evaluating the products, services, and work processes of
organizations that are recognized as representing best
practices for the purpose of organizational improvement."
Benchmarking is a continuous improvement strategy and a
change management process.
"Benchmarking is simply about making comparisons with
leading organisations, learning the lessons from these
comparisons and adapting the same"

Benchmarking is about

Comparisons
Target setting
Paradigm shift/ thinking new
Killing complacency
Get external perspectives
Learning from others
Getting new knowledge
Extracting & predicting future

Benchmarking Vs. Benchmarks

Benchmark is the value which gives
us the opportunity to identify the
areas where benchmarking process
is to be adopted for identification of
areas for improvement

If you know the enemy

& know yourself, your victory
will not stand in doubt
Sun tzu

Benchmarking Process
Continuous
A Continuous

the

Structured
Structured

BusinessPractices
Practices
Business
Products
Products
Services
Services
WorkProcesses
Processes
Work
Operations
Operations
Functions
Functions
Recognized
Recognized
For the
purpose
of

as

Process
Process

of

for

Organizations
Organizations

Comparing
Comparing

that are

Best-in-Class
-in-Class
Best
World-Class
World-Class
RepresentingBest
BestPractices
Practices
Representing

OrganizationalImprovement
Improvement
Organizational
Meeting/SurpassingIndustry
Industrybest
bestPractices
Practices
Meeting/Surpassing
EstablishingPriorities,
Priorities,Targets,
Targets,Goals
Goals
Establishing

Types of Benchmarking

Internal (20%)

Similar operations within an

organization

Competitive (10%)

The best direct competitors

Functional (35%)

The same function outside

the industry

Generic process (35%)

Innovative, exemplary work

processes

Types of
of Benchmarking
Benchmarking
Types

Internal
Internal
Definition :: Similar
Similaractivities
activities in
indifferent
differentlocations,
locations,
Definition
departments,operating
operating units
units
departments,
Advantages :: Data
Datacollection
collectioneasy,
easy,good
good
Advantages
results for
for diversified
diversifiedexcellent
excellent
results
companies
companies
Disadvantages ::Limited
Limited focus,
focus, internal
internalbias
bias
Disadvantages

Competitive
Competitive
Definition :: Direct
Directcompetitors
competitorsselling
sellingto
to
Definition
samecustomer
customerbase
base
same
Advantages :: Information
Informationrelevant
relevant to
tobusiness
business
Advantages
results comparable
comparablepractices/
practices/
results
technologies,history
historyof
of information
information
technologies,
gathering
gathering
Disadvantages ::Data
Datacollection
collection difficulties,
difficulties,
Disadvantages
ethicalissues,
issues, antagonistic
antagonistic
ethical
attitudes
attitudes

Functional
Functional
(Generic)
(Generic)
Definition :: Organizations
Organizations recognized
recognizedas
as
Definition
havingstate
state-of-the-art
-of-the-art products/
products/
having
services/processes
services/processes
Advantages ::High
Highpotential
potentialfor
fordiscovering
discovering
Advantages
innovativepractices,
practices,readily
readily
innovative
transferabletechnology/practices,
technology/practices,
transferable
accessto
torelevant
relevantdatabase,
database,
access
stimulatingresults
results
stimulating
Disadvantages ::Difficulty
Difficultytransferring
transferringpractices
practices
Disadvantages
intodifferent
different environment,
environment,
into
time-consuming
-consuming
time

Phases of Benchmarking
1. People Dont want,
dont ask

Happy with status quo

2.Dont want but ask

Involved just because it is

popular but dont listen

3.Want and ask

Uncomfortable & defensive

4. Seek, desire, listen

and use

Progressive, seek opportunities

Functional best practices - World class

Functional best practices (Country)
Industry best practices
Competitors best practices
Internal
Internal
bestPractices
Practices
best

Thinking
out of
Box

A View of Best Practices

We dont claim to be the global

fountainhead of management thought,
but we may be the worlds thirstiest pursuer
of big ideas from whatever source.
Jack Welch
CEO, General Electric

W HER E W E W ANT T O BE

LE APF ROG

25-50%
5-20%

Incremental
G ains

3- 5%

G OA L 4 World Class
B enchmarking

G OA L 3 Indust ry Best
S treamlining

G OA L 2 Meet Requirements
P roblem S olving

G OA L 1 Current Performance
P rocess Document at ion
W HER E W E A RE

Steps of Benchmarking
1

2
Form a
Benchmarking
Team

Determine
what to
Benchmark

Identify
Benchmark
Partners

TakeAction
Action
Take

Collect
and
analyze
information