Question

Midstate Industries is a retail clothing store. Marilyn Mounds knows that customer satisfaction is key to the success of her store. Indicate by placing an “X” in the appropriate column whether the following measures are leading or lagging and qualitative or quantitative. Each item may classify as more than one measure.

10 points

	Leading	Lagging	Qualitative	Quantitative
Attractive display of clothing items
Dollars invested in display cases
Overtime pay during sale days
Quality of clothing
Earnings per share
Number of returns
Employee turnover
Net income
Customer satisfaction survey response
Training time for new employees

Answer the following questions related to benchmarking:

What is benchmarking?

What is a best practice?

What are the five items on which benchmarking is focused?

Answer 1

Measures marked with appropriate indicator :	Leading	Lagging	Qualitative	Quantitative
Attractive display of clothing items	X			X
Dollars invested in display cases	X		X
Overtime pay during sale days	X			X
Quality of clothing	X		X
Earnings per share		X		X
Number of returns		X		X
Employee turnover		X		X
Net income	X			X
Customer satisfaction survey response	X		X
Training time for new employees	X		X

Benchmarking : Benchmarking is comparing one's business processes and performance metrics to industry bests and best practices from other companies. The point of benchmarking is to identify internal opportunities for improvement. By studying companies with superior performance, breaking down what makes such superior performance possible, and then comparing those processes to how your business operates, you can implement changes that will yield significant improvements.

Best Practice : Best practices of industries are one which much reflect following things -

1.It must demonstrate through evidence that it yields a “better, faster, cheaper” result.

2.It must successfully demonstrate that it is a superior approach in more than one setting.

3.It must be able to prove it can help achieve organizational objectives.

Benchmarking is a simple, but detailed, five-step process:

• Choose a product, service, or internal department to benchmark
• Determine which best-in-class companies you should benchmark against – which organizations you’ll compare your business to
• Gather information on their internal performance, or metrics
• Compare the data from both organizations to identify gaps in your company’s performance
• Adopt the processes and policies in place within the best-in-class performers