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Bench Marking

This document provides an introduction to benchmarking. It defines benchmarking as comparing one's own processes and performance metrics to those of other organizations. The original purpose of benchmarking was to compare manufacturing processes, but it now includes comparing all business processes and strategies. There are several types of benchmarking, such as competitive, best-in-class, internal, functional, and collaborative benchmarking. Benchmarking provides benefits like improving operations, customer orientation, innovation, and decision-making. Potential pitfalls include lack of support, improper prerequisites, selecting the wrong benchmarks or partners, and not implementing benchmark findings. Marketing benchmarking specifically focuses on comparing elements of the marketing mix, information, planning, and operations.

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118 views3 pages

Bench Marking

This document provides an introduction to benchmarking. It defines benchmarking as comparing one's own processes and performance metrics to those of other organizations. The original purpose of benchmarking was to compare manufacturing processes, but it now includes comparing all business processes and strategies. There are several types of benchmarking, such as competitive, best-in-class, internal, functional, and collaborative benchmarking. Benchmarking provides benefits like improving operations, customer orientation, innovation, and decision-making. Potential pitfalls include lack of support, improper prerequisites, selecting the wrong benchmarks or partners, and not implementing benchmark findings. Marketing benchmarking specifically focuses on comparing elements of the marketing mix, information, planning, and operations.

Uploaded by

Hesham Zahran
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Benchmarking.

Introduction to Benchmarking.
Benchmarking relies upon a comparison between the activities of your own organization
and those of another. Originally benchmarking was used in manufacturing operations
where one process could be compared and contrasted with another.

Think about it in basic terms – you measure a piece of wood along your bench. You keep
one end of the wood level/flush with the end of the bench and cut a notch in the bench
itself with your chisel at the other end. Then you place other pieces of wood in the same
location – the shorter ones you reject and the longer ones you cut down. A benchmark is
a measurement tool.

Xerox is commonly cited as the original proponent. More recently the definition has
broadened to include all business processes, competitive advantages, performance and
strategies (Prasnikar et al 2005)

Basic types of benchmark.


Competitive or Industry/sector benchmarking enables an organization to compare its
performance with competitors trading in the same industry or sector.
Best-in-class benchmarking is similar to industry or sector benchmarking. However
managers would compare their organization to the market or sector leader i.e. the best-in-
class.

Internal or historical benchmarking is the internal procedure for comparing results from
past performance to current or forecasted performance.

Functional or external benchmarking involves comparing your business activities with


those of companies from other industries/sectors with similar processes.

Collaborative benchmarking involves two phases; firstly between two voluntary


collaborators within a sector, then secondly between the two collaborators and a party
outside the current sphere of competition. Of course this is better suited to the public
sector e.g. hospitals, police services since commercial rivals are unlikely to collaborate in
this manner.

Benefits of benchmarking (Gift 1996)


• It is an effective approach for achieving operational change. Benchmarks are the
catalyst that moves an organization to higher levels of performance.
• Since customer requirements are so rigorously defined, benchmarking improves
customer orientation.
• It focuses upon the processes that improve results - not simply results.
• Performance measures are often improved as a result of benchmarking.
• Decision making improves because the organization has enhanced customer
knowledge, process focus, and performance measures.
• Benchmarking improves innovation and creativity since self-imposed barriers to
success are removed.

Potential pitfalls with benchmarking.


• Benchmarking needs to be supported and driven by senior leaders.
• Prerequisites (such as organizational structure, processes) need to be in place.
• Conducting benchmarking for the wrong reasons can be problematic e.g. to
produce data - ignoring processes and insights gained into practices that produce
benchmarks.
• Selecting the wrong benchmarks.
• Selecting the wrong benchmark partner.
• Not gaining management support for plans resulting from benchmarks.

Marketing benchmarking.
When applying benchmarking techniques to an organization’s marketing activities you
are essentially comparing one or a number of your company’s marketing activities to
those of another part of the business, a competitor or a business that operates in another
industry. Vorhies and Morgan (2005) used the following marketing benchmarks in their
research:

• Pricing
• Product Development
• Channel Management
• Marketing Communications
• Selling
• Market Information Systems
• Marketing Planning
• Marketing Implementation

Essentially they focus upon the marketing mix, marketing information, planning and
operations. Each of these could be sub-divided and new factors introduced e.g. Customer
Relationship Management (CRM) – to suit your own organization’s marketing strategy.

References.
Camp, R.C. (1995) Business Process Benchmarking: Finding and Implementing Best
Practises. Milwaukee: ASQC Quality Press, p18.

Camp, R.C. (1989 Benchmarking: The Search for Best Practises that Lead to Superior
Performance. Milwaukee: ASQC Quality Press, p12.

Gift, R.G. (1996) Today’s Management Methods, P245 - 261.

Prasnikar, J., Debeljak Z. and Ahcan, A. (2005) Benchmarking as a Tool for Strategic
Management, Total Quality Management, Vol.16, No. 2, 257 - 275, March 2005.

Vorhies, D.W. Morgan, N. A. (2005) Benchmarking Marketing Capabilities for


Sustainable Competitive Advantage, Journal of Marketing, Vol. 69, Issue 1, p80-94.

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