Last Updated on 13 September 2023
Benchmarking is about finding the best example you can find of how to operate the process you are investigating, and then comparing that to how it is currently working. You will be comparing your processes against ‘competing’ processes to see what you can learn to improve them. Because both your process and the competing processes will be improving and evolving over time, you can use this tool again and again to repeatedly find improvement ideas.
You can benchmark how they are operating, gaining ideas on differences that can be used by your process. You can also use benchmarking to look how well they are operating, showing you what can be achieved and helpful in setting your targets.
Who can you benchmark against?
Keep an open mind when selecting your benchmark, but to give you some ideas any of the following could serve as your ideal benchmark:
- Direct competitors in your market
- Best-in-class leaders in your market
- World class operators (worldwide leaders)
- Other departments or locations of your organization handling the same process
- Similar processes throughout your organization
- Different shifts such as contrasting day shift against night shift performance
How do you perform benchmarking?
1. Project selection
Identify the area which is underperforming, falling short of expectations, or trailing behind others’ performance. This is likely your best candidate for improvement.
2. Find a benchmark
Choose which competitors are doing that function better than you.
Internal competitors have the advantage that you can get more data. external competitors increase the options and variety of ideas.
3. Gather intelligence
You’ll need to gather as much information as you can on the process you’re benchmarking against. If it is internal, speak to the process controller, and really get to the bottom of what makes their process better.
External benchmarks are trickier. There may be sources of information, such as on the internet that you can access. Better still is contacting them. They may be happy to give you a tour and show you how they do things, but usually there will need to be something in it for them. If they can benchmark one to one of your processes and you can benchmark to one of theirs, especially if it is in areas you don’t compete, you may be able to come to a profitable arrangement.
If you don’t have access to the actual data, you can brainstorm the reasons for the differences in achievement.
4. Improvement plan
Create a step by step plan to bridge the gap between how well your process is performing and what you now know you can achieve.
5. Implementation
Follow through the improvement plan, bringing necessary changes into practice.
6. Re-measure
Once improvement steps are implemented, remeasure performance to check that the efficiency gap has truly closed.
7. Repeat
Benchmarking is usually going to be repetitive. Even when you’ve finished your initial exercise it is worth restarting to see if there is still gap to be closed, or if your competitor has any new strategies you can use.
Conclusion
Benchmarking is a valuable tool for your business, allowing you to compete against top performers and to make sure best practice is spread throughout your organization. It’s about continuous enhancement, discovering, implementing, and reassessing to stay at par with evolving standards. Whether you’re comparing against direct competitors in your market, world-class operators, or even different shifts within your own organization, the ultimate goal remains the same: uncover insights for process improvement, implement them, and re-measure for efficacy.
This isn’t a one-off activity but a continuous, cyclical process designed to keep your procedures as good as or ahead of, your competitors.
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