Benchmarking

Benchmarking :-

Benchmarking is the practice of comparing business process and performance metrics to industry bests and best practice from other companies. Dimensions typically measured are quality , time and cost.Benchmarking is used to measure performance using a specific indicators (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.

The 12 stage methodology of benchmarking:-

1. Select subject
2. Define the process
3. Identify potential partners
4. Identify data sources
5. Collect data and select all partners
6. Determine the gap
7. Establish process differences
8. Target future performance
9. Communicate
10. Adjust goal
11. Implement
12. Review and recalibrate

Cost of benchmarking :-

The three main types of costs in benchmarking are:

• Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.
• Time Costs - Members of the benchmarking team will be investing time in researching problems, finding exceptional companies to study, visits, and implementation. This will take them away from their regular tasks for part of each day so additional staff might be required.
• Benchmarking Database Costs - Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice now.