Benchmarking types
INTERNAL BENCHMARKING COMPETITIVE
Is a comparison of a business process to a similar process
inside the organization to acquire the best internal.
business practices
Benefits: most cost efficient, relatively easy, low cost and
fast.
Challenges: fosters mediocrity, limits options for growth,
low performance improvement.
FUNCTIONAL Benchmarking
BENCHMARKING
is a comparison to similar or identical practices (e.g., the
picking process for assembling customer orders,
maintaining inventory controls of spare computer parts,
logistics to move operational forces, etc.) within the same
or similar functions outside the immediate industry.
Benefits: provides industry trend information, quantitative
comparisons and a better improvement rate.
Challenges: diverse corporate cultures, great need for
specificity - common functions can be difficult to find.
BENCHMARKING
is a direct competitor-to-competitor comparison of a
product, service, process, or method.
Benefits: comparing like processes, know your
competition better and possible partnership.
Challenges: difficult legal issues, relatively low
performance improvement and threatening.
GENERIC BENCHMARKING
In general it conceptualizes unrelated business processes or
functions that can be practiced in the same or similar ways
regardless of the industry (e.g., transferring funds, bar
coding, order fulfillment, admissions, replenishing
inventory, warehousing, etc.). Generic means without a
brand.
Benefits: high payoff, noncompetitive/nonthreatening
broad, new perspective and innovative.
Challenges: difficult concept, can be difficult to identify
best-in- class and it takes a long time to plan.
Definition:
• Benchmarking is defined as the process of measuring products, services, and processes
against those of organizations known to be leaders in one or more aspects of their
operations. Benchmarking provides necessary insights to help you understand how your
organization compares with similar organizations, even if they are in a different business
or have a different group of customers.
• Benchmarking can also help organizations identify areas, systems, or processes for
improvements—either incremental (continuous) improvements or dramatic (business
process re-engineering) improvements.