Benchmarking Exercises- Uncovering Best Practices

By P S Vishwanath

As we all know there are several management tools exist for continuous improvement strategy.
Many industries already exploited these management tools & implemented it for continuous
improvement. Every now & then we read in the newspaper that, XYZ Company acquired QMS
certification, some had acquired EMS certifications & others successfully implemented TQM in
their workplace. But when it comes to competitive intelligence, there are a few tools that can
provide sophisticated comparison of business functions between organizations of similar kind.
Yes, here is where we are talking about Benchmarking Exercise. This kind of exercise is
certainly not new to any industry. But if you ever happen to ask questions like, how are we
doing? Are we tracking right measures? How we can compare with others? & Are we using
best practices? Then certainly Benchmarking Exercise is the answer. Definitely these are some
of the pertinent questions in present day scenario. This brief compiled article is an attempt to
respond to some of these questions.

θ WHY BENCHMARKING
In the present context, developing countries like India is facing major challenges of free &
borderless global market. To remain in the rat race, it is necessary to outperform by
innovations / value additions & manufacture required quality at competitive prices.
Modernisation / Automation alone will not deliver quality products at competitive prices unless
some standard levels of process performance, machinery / labour performance are achieved at
each stage of manufacturing. Thus considering the importance of productivity & superior
quality, one of the continuous improvement tools i.e Benchmarking methodology is applied.
This methodology assists in ascertaining best practices amongst similar kind of industries.
Furthermore the best practices are implemented for necessary performance improvements

θ WHAT IS BENCHMARKING
Benchmarking is a continuous / iterative process, which involves sharing of information inside
& outside the organization. It’s method of identifying best practices & their associated
performances with an intention to facilitate process improvement resulting in superior
performance & competitive edge in the market place. Benchmarking which is normally carried
out within the same industry is a learning activity for improving key process performance. Thus
one can say, the objective of the benchmarking is to search for best of best practices with an
emphasis on how one can apply the benchmark data to the existing process to achieve
superior results.

θ STEPS INVOLVED IN BENCHMARKING

Normally Benchmarking Exercise consists of four phases, which involves: --

1] Planning --
This involves identification of subject area & the criteria that will be used to assess success.
After identifying potential benchmarking partners & making project plan, a common
document format is created for exchange of information by developing communication
strategies such as E-mails, phones etc. Then team members for benchmarking are
appointed & finally for the purpose of the visits of the team members [If any], visit
schedules & agenda are prepared.
2] Data Collection & Information Of Process To Be Benchmarked –
Prerequisites for data collection are to develop mutual understanding between
benchmarking partners about the procedures & required formats to be prepared & to be
followed. This is called as benchmarking protocol. Then data collection is to be carried out
by chosen methods, for instance E-mails, phones etc. followed by schedule of
questionnaires on agreed terminology & performance measures. After one to one meeting
of team members, finally compile the findings to carry out necessary analysis.
3] Data Analysis To Determine Best Of Best --
For the ease of analysis & findings, preferred way of information is either in the form of
spreadsheets or databases. Analysis can be done as per the convenience & simplicity i.e.
by using charts, tables etc. Identify & seek explanation in the performance lacking areas
by data comparisons & finally list the opportunities for performance improvement to
determine the best.
4] Implementation of Results & Monitoring / reviewing --
After identifying the performance & non-performance areas & knowing what others are
doing, the comparative benchmark data is used to improve the performance, keeping in
mind the feasibility of the conditions that apply within the organization. Once these
conditions are assessed, produce a report on benchmarking project in which
recommendations & action plans for performance enhancement are included. Implement
 the said action plan in phase wise manner for the ease of monitoring & reviewing. Monitor
the progress & record changes in performance by making progress reports from time to
time, so that periodically re-consideration can be done with respect to those conditions
that impact the performance relative to best practice. All these reports should be made
available per person for reviewing
θ BENEFITS OF BENCHMARKING


Organisations can make most out of the Benchmarking Exercise if it is properly planned,
conducted & implemented. Benchmarking Exercise should be promoted as a learning culture.
This exercise should be integrated with others tools & initiatives to reap rich benefits. This in
turn will always encourage spreading of information on best practices. Benchmarking always
makes the organization to change & learn the good of achieving competitive excellence.
Striking example of this is Japan. Lessons to be learnt from Japanese, as they are world
leaders in Benchmarking Exercise. They attribute their success largely to “dantatsu” which
means, strive to become best of best.