Benchmarking is the search for best practices, the ones that will lead to superior performance. Establishing operating targets based on the best possible industry practices is a critical component in the success of every organization.
The basic steps of benchmarking:
- Know your operation. You need to accurately assess your strengths and weaknesses.
- Know your industry leaders or competitors. You must understand, and compare yourself to, the best practices in the industry and/or its leaders.
- Incorporate the best. Learn from industry leaders and your competition. If they are strong in given areas, uncover why and how they got that way. Find best practices wherever they exist and do not hesitate to copy or modify and incorporate them in your own operation. Emulate their strengths.
- Gain superiority. If careful investigations of best practices have been performed, and if the best of those best practices have been installed, then you will have incorporated the best of the best.
Benchmarking can be divided into two parts:
- Practices: the methods that are used.
- Metrics: the quantified effect of installing the practices.
Benchmarking should be approached by investigating industry practices first. The metrics can be obtained or created later. One cannot determine why a gap exists from the metrics alone: Only the practices on which the metric is based will reveal why.
Essential to the benchmarking process are carefully designed communications throughout the organization and concerted management support. There is also a definite place for employee involvement in benchmarking: The findings need to implemented. What better way to do so smoothly than through the efforts of those closest to the work process?
Excerpted from Robert C. Camp, Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance, Productivity Press, 1989, pages 4-6. |
