Benchmarking

BENCHMARKING

Benchmarking is a way to measure business and team success by comparing a process or the organization as a whole to other internal processes or to competitors. Benchmarking helps you understand industry norms and analyze how your company stacks up. You can also compare a process within one department to that of another to evaluate productivity or efficiency.

A brief overview of what benchmarking is: Setting a standard for a team, process, or the organization as a whole. Benchmarking allows you to continue to improve the business or business functions by creating a specific standard for performance. Benchmarking improves performance by identifying and applying best demonstrated practices to operations and sales.

Companies use Benchmarking to:

• Improve performance - Benchmarking identifies methods of improving operational efficiency and product design.
• Understand relative cost position - Benchmarking reveals a company’s relative cost position and identifies opportunities for improvement.
• Gain strategic advantage - Benchmarking helps companies focus on capabilities that are critical to building strategic advantage.
• Increase the rate of organizational learning - Benchmarking brings new ideas into the company and facilitates experience sharing.

How Benchmarking works:

• Select a product, service or process to benchmark
• Identify the key performance metrics
• Choose companies or internal areas to benchmark
• Collect data on performance and practices
• Analyze the data and identify opportunities for improvement
• Adapt and implement the best practices, setting reasonable goals and ensuring companywide acceptance

The six most significant types of benchmarking,

1. Internal benchmarking

Internal benchmarking is pretty straightforward. You compare a process or task to a similar process or task within the company. This requires the ability to track metrics for these two comparable systems or departments. This type of benchmarking is effective because it helps set and meet standards across the board, establishing consistency and ensuring that each department is as efficient as possible.

2. External benchmarking

External benchmarking is comparing an internal process to that of a competitor or even several other organizations. This approach can be a little trickier because it requires access to industry data or specific company data, which may not be available unless the other organization has agreed to share it with you. External benchmarking is extremely valuable. You can better understand where your business fits into the wider market and identify areas of weakness that you should be focusing on.

3. Competitive benchmarking

Competitive benchmarking is a type of external benchmarking that solely focuses on comparing your own processes and metrics to those of direct competitors. This form of benchmarking is significant because you can identify exactly why a competitor is succeeding or what drives customer satisfaction in your industry.

4. Performance benchmarking

Another important form of benchmarking is related to business performance. By tracking metrics and KPIs within the business, teams can continue to compare past outcomes to current standards, continuously updating the standard for improved performance. This type of benchmarking is focused on improving key business functions over time, since the idea is that benchmarks will continue to be raised and strengthened.

5. Strategic benchmarking

Strategic benchmarking is typically external and specifically analyzes how other companies got to be successful. What kind of business strategies do they employ? For example, what is successful about their marketing campaigns? Benchmarking the way you strategize can help you learn from what has worked for winning businesses in and out of your industry. This is especially helpful for new businesses or startups.

6. Practice benchmarking

This form of internal benchmarking relates to the practices and processes of your business. This requires you to have procedures in place to gather and analyze business data, like how employees and teams are completing their tasks or using certain technologies. Process mapping is one way to start practice benchmarking, and you can quickly identify and address any performance gaps in the company.

Feedbacks

Never underestimate the value of feedback when you start benchmarking. Gathering customer feedback can provide you with actionable insights into how the business is performing and which teams and functions need work. Putting a process in place for collecting feedback helps you set internal benchmarks for departments that interact with customers.

PROBLEM DESCRIPTION

Mr. D.S. Pughazhyendhii is a married man who lives in Bangalore which is a highly crowded city. His Family comprises five members including his wife, five-year-old boy, his father, and his mother. He visits his native place Madurai which is 500kms away from Bangalore once in a month. Also, he will be using his car to commute to his office. His budget falls between 8 to 10 lakhs on road. Please suggest to him with options so that he will buy a good car for his family.

Note: Pughazhyendhii is fond of big cars

Solution:

1. Ford Ecosport

2. Nissan Magnite

3. Hyundai Creta

4. Hyundai Venue

5. Maruti Baleno

Specifications

Car	Mileage (KMPL)	Power (BHP)	Torque (Nm)	Fuel Tank Capacity (Litres)	Fuel Type	Transmission Type	Price (Lakhs)
FORD ECOSPORT	21.7	98.63	215	52	Diesel	Manual	9.99
NISSAN MAGNITE	17.7	98.63	152	40	Petrol	Automatic	9.89
Hyundai Creta	16.8	113.42	144.15	50	Petrol	Manual	9.99
Hyundai Venue	23.7	98.6	240.26	45	Diesel	Manual	8.28
Maruti Baleno	19.56	81.8	113	37	Petrol	Automatic	9.10

CONCLUSION

He has to go to office daily in bangalore traffic and Monthlty once he has to drive long. Considering these conditions I would suggest him to buy Maruti Baleno instead of Hyundai Venue. Even the mileage is higher in Hyndai venue it has Diesel Engine and Manual Transmission. So For bangalore traffic I would suggest automatic transmission to avoid gear changing tension. And the pickup and smoothness of petrol engine is better than Diesel Engine.

So I am suggesting Maruti Baleno