August 1, 2013

Benchmarking is a technique in which a company measures its performance against that of best in class companies, determines how those companies achieved their performance levels and uses the information to improve its own performance. Subjects that can be benchmarked include strategies, operations and processes. (ASQ)

There are two forms of benchmarking:

Performance: analysis of relative business performance through key performance metrics.

Process/Functional: analysis of key processes and functions.

The process for benchmarking is:

  1. Plan
  2. Collect Data
  3. Analyze
  4. Adapt and Improve

The starting point for any benchmarking is identifying areas within your own organization that have significant impact on your business and need to be improved.

The next is to analyze these internal processes, activities and metrics in detail so that you understand the details and aspects that need to be improved. This will allow you to accurately establish benchmark questions with which to engage in benchmarking.

It is also valuable to treat benchmarking like any other project, selecting key team members, establishing responsibilities, timelines, implementation milestones and assessment of impact.

This structure avoids site visit benchmarking becoming industrial tourism, where you just turn up at a company and ‘look for what interests you’.  This usually results in multiple people returning with the same information, huge gaps in the knowledge needed to create successful change and nothing really happening on your return. 

Following the above tips can ensure that when you visit a company for benchmarking purposes you will make the most use of your time and obtain the exact information required, implement change and create improvement.  

Denis Leonard has a degree in construction engineering an M.B.A. and a Ph.D. in quality management. Denis is a Fellow of the American Society for Quality, a Certified Quality Manager, Auditor, and Six Sigma Black Belt. He has been an Examiner for the Baldrige National Quality Award Board of Examiners a Judge on the International Team Excellence Competition and a Lead Judge on the National Housing Quality Award. A former Professor of Quality at the University of Wisconsin, he has experience as a quality manager in the home building industry as well as construction engineer, site manager, and in training, auditing, and consulting with expertise in strategic and operational quality improvement initiatives. His work has achieved national quality, environmental, and safety management awards for clients. 

Denis is co-author of The Executive Guide to Understanding and Implementing the Baldrige Criteria: Improve Revenue and Create Organizational Excellence.


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