Question

What is benchmarking? Discuss some of factors to be considered when using a third-party authority to conduct the benchmarking review.

Answer 1

BENCHMARKING :

       In simple words , benchmarking is an approach of setting goals and measuring productivity based on best industry practises. It developed out of need to have information against which performances can be measured. For example, a customer support engineer of a television manufacturer attends a call within 48 hours . if the industry norm is that all calls are attended within 24hours, then the 24 hours can be a benchmark

It is a process of continuous improvement in search for competitive advantage. It measures a company’s products, services and practises against those of its competitors or other acknowledged leaders in their field. It studies the circumstances and processes that help in superior performance.Efforts are made to learn, improve and evolve them to suit the organizational circumstances. Firms can use benchmarking process to achieve improvement in diverse range of management function like:

· Maintenance operations

· Assessment of total manufacturing costs

· Product development

· Product distribution

· Customer services

· Plant utilization levels

· Human resource management

Factors to be considered :

· Identifying the need for benchmarking and planning :   Define the objectives and benchmarking exercise.

. Clearly understand existing business processes: This step will involve compiling information and data on performance . This will include mapping processes.

· Identify best processes : Within the selected framework, best processes are identified.

· Comparing: While comparing gaps in performance between organisation and better performers is identified. Further gaps in performance is analysed to seek explanations.

· Evaluation : Periodically evaluates and reset the benchmarks in the light of changes in the conditions that impact the performance.