HO3 - L13: Benchmarking Flashcards
What is benchmarking?
idea of measuring performance against a standard.
What categories does performance measure?
- Cost eg: Price, payment
- Quality eg: defect rates, warranty claims
- Delivery eg: cycle time, on-time delivery
4: Service eg: responsiveness, resolution of problems.
Each performance measure that you select should be: specific and measurable.
What is the aim of benchmarking?
To help companies become good or better than other operating in field.
What is best practice benchmarking?
Used when benchmarking is done against multinationals that have been deemed best in the world.
Professional management groups such as AMA offer regular seminars and published literature regarding those firms that recognized to be excellent in any number of function areas.
What are the steps involved in benchmarking process?
- Identify key performance measures
- Determine the competitor or leader in that area
- Identify the gap between the present and desired performance
- Align benchmarked goals to overall organisational goals
- Research the competitive (or non-competitive) intelligence
- Develop methods of measuring performance
- Undertake benchmarked activities
- Measure performance
- Continue improvement or repeat process in another area
What are the different categories of benchmarking?
- Internal
- Non-competitive
- External
- Performance/ Competitive
- Strategic
- Breakthrough
Explain Internal Benchmarking
Involves benchmarking operations within the same organisation (could be business
units in different countries). Implementation of activities should be quite straight
forward but may lack innovation.
Explain Non competitive benchmarking.
Benchmarking functional areas between organisations who are not in direct competition.
Explain external benchmarking.
Analysing outside organisations which are known to be best in class. Often hard to get
sensitive data.
Explain performance/competitive benchmarking?
Allows the initiator firm to assess their competitive position by comparing products
and services with those of target firms. Target firms will be in the same sector.
Explain strategic benchmarking.
Involves observing how others compete. Long-term strategies and general approaches
that have enabled high performers to succeed. This type is usually not industry specific,
meaning it is best to look at other industries
Explain breakthrough benchmarking.
Some people would argue that there is little point in benchmarking if you are only going to get as ‘good as the best. Instead of using benchmarking to copy the performance of ‘the best’ a more proactive role is
needed in order to get ‘better than the best’ and this will involve doing things different to the way they are doing them. This will result in competitive advantage
