Benchmarking

                                       Benchmarking process in Automobile sectors

What is Benchmarking

Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost.

Purpose of Benchmanrking

• Focuses on processes rather than outcomes
• Encourages information sharing 
• Implies a willingness to change and a desire to implement best practices.

Stages of Benchmarking

• A Step-by-Step Approach to Benchmarking
• Planning. Prior to engaging in benchmarking, it is imperative that corporate stakeholders identify the activities that need to be benchmarked
• Collection of Information.
• Analysis of Data
• Implementation
• Monitoring.

Goals of Benchmarking

• Determine what you're going to measure. To do this, you need to identify your key performance indicators (KPIs)
• Research your competitors and your industry. 
• Draw a line in the sand.
• Communicate targets based on researched benchmarks. 
• Measure and improve.

Benefits of Benchmarking

• Gain an independent perspective about how well you perform compared to other companies.
• Drill down into performance gaps to identify areas for improvement.
• Develop a standardized set of processes and metrics.
• Enable a mindset and culture of continuous improvement.
• Set performance expectations.

Pros and Cons

Pros 

• Industry benchmarks can help with budget projections.
• It can give you the idea of what other companies doing.
• Can improve the technologies with reduced cost and time.

Cons

• Lack of Information: Sometimes, the company is unable to gather adequate information for benchmarking.
• Increases Dependency: The companies tend to depend on other companies' strategies to become successful.