Benchmarking

Outline

Dr. Zargari

Benchmarking Definition
Benchmarking Background
Why Benchmarking?
Benchmarking, Dimensions & Types
Survey
Benchmarking Process
Benchmarking Essentials
Benchmarking Costs
Benchmarking Ethics
Benchmarking Pitfalls
References

What is Benchmarking?
Benchmarking is the process of improving
performance by continuously identifying,
understanding, and adapting outstanding
practices found inside and outside the
organization.
Benchmarking is an improvement process
that is used to identify best practice within
a peer group and facilitate its incorporation
into your organization.
Studying best practices provides the
greatest opportunity for gaining a strategic,
operational, and financial advantage.
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What is Benchmarking?
Benchmarking is the process of
comparing one's business processes and
performance metrics to industry bests
and/or best practices from other
industries.

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Why are others better ?

How are others better ?
What can we learn ?
How can we catch up ?
How can we become the best in our sector ?

What is Benchmarking?
Best practice refers to techniques,
methods or processes that are more
effective
at
delivering
a
desired
outcome.Japanese Word DANTOTSU
means striving to be the best of the
best, captures the essence
of
Benchmarking.
Incorporating best practice into your
organization can lead to greater
efficiency and effectiveness and a
happier customer.
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What is Benchmarking?

(J.

McEvilly-2008)

Benchmarking has three main features:

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Operational Definition of Benchmarking

Comparing business
processes, not only
performance measures

A structured
technique

Benchmarking is a technique of identifying,

understanding and adapting superior practices
from organizations locally and world wide to
improve performance and achieve
priority business results.
Learn from
others
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External
focus

Improvement, not
evaluation

What is Benchmarking?
Benchmarking is not a method for
'copying' the practices of competitors,
but a way of seeking superior process
performance by looking outside the
industry.

When Benchmarking a
System,
Adapt What You Find,
Dont Just Copy It

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What is Benchmarking?
Benchmarking =
Copying
Conditions are never identical
You can pick up critical variables and
apply them
Create a system a comprehensive set
of reinforcing practices that are
responsible for success
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What is Benchmarking?
Benchmarking is not just making
changes and improvements for the sake
of making changes, benchmarking is
about adding value.
Benchmarking makes it possible to gain
competitive superiority rather than
competitive parity.

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What is Benchmarking?
Benchmarking is a tool for continuous
improvement of the management of
processes in companies to help them to
gain world
Benchmark
leadership.
Purpose and Quality
Quality
Maturity

II

Maturity

III

Learnin Borrowi Bestg from ng

in-firm
success ideas
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IV

Beating Bestindustry instandar class

ds

VI
National
leadership

What is Benchmarking?
In Japan, benchmarking is a part of their
manager's job descriptions (Boxwell,
1994).
This is one of the ways that the Japanese
are able to keep up with and surpass
others in industries such as automobiles,
motorcycles, electronics, etc.

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What is Benchmarking?
Benchmarking is critical to formulating a
knowledge-based plan of action to achieve
objectives.
A benchmark is a standard that provides a
measuring-stick for relative performance.

US Department of Energy

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Benchmark
A benchmark is an organization
recognized for its exemplary operational
performance.
There are many benchmarks in the world
Processes
including:

Design
Training
Service
Rapid product
development
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Benchmarking and Industries

Relationship between benchmarking and
industry type (According to one research
done in the UK ):

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Benchmarking and
Organization Size
Moreover a tendency of benchmarking
activity is a function of size. A larger
organization is more likely to be
benchmarking than a smaller one.

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Actual Benchmarking
Examples

Initiator

Improvement Sought

Target Firm

Southwest
Airlines

Faster plane turnaround

time

Indy 500 pit

crews

Xerox

Warehousing operations

L. L. Bean

IBM

Employee theft
reduction

Las Vegas
Casinos

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Benchmarking
is a tool for total
quality
management
(TQM).
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Benchmarking is
basically
learning from
others.

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Dr. Zargari

Benchmarking is the
practice of being
humble enough to
admit that someone
else is better at
something and wise
enough
to try
American
Productivity
and and
Quality
Center-1988
learn how to match
and even surpass them

What is Benchmarking?
At its simplest, benchmarking means:

"Improving ourselves
by learning from
others."

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Backgroun
d
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Background of Benchmarking
The term benchmarking was first used
by cobblers to measure people's feet for
shoes. They would place someone's foot
on a "bench" and mark it out to make
the pattern for the shoes.
Traditionally, the organizations used to
enhance their products and performance
by focusing on their internal functional
activities (Kolarik, 1995).
The organization, for example, may use
techniques such as Quality Function
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Background of Benchmarking
However, these traditional performance
improvement trends seem not to be
sufficient for the highly competitive
markets (Juran, 1993).

A significant technique facilitating

improvement
of
organizational
performance
at
a
competitive
environment is benchmarking. (Juran,
1993).
Customers expectations are highly liquid
and are driven by standards set by best
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Background of Benchmarking
In other words external environment and
market conditions change rapidly; goal
setting which is internally focused cant
be true reflection of customers
expectations.

Out-Ward
Vision

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Improvement

Continuous and Breakthrough Improvement

ly e
h
v
g
Hi etiti n
mp atio
o
C itu
S

Continuous
Improvement

Breakthrou
gh
Improveme
nt
Continuous
Improvement

Time
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r ki
a
m
h
Benc g
n
es
t
a
r
e
l
Acce ation
v
Inno ange
Ch
and

Background of Benchmarking
Benchmarking was originally defined by
D.T.
Kearns,
the
CEO
of
Xerox
Corporation, in 1981 as the continuous
process of measuring products, services,
and practices against the
toughest
competitors or non-competitors who is
the leader in their industry .

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Why
Benchmark
ing?
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Why Benchmarking?
Survival lies in emulating best and not in
lagging behind. Bench marking is time
and cost efficient because it involves
imitation and adaptation rather than
pure invention. Prevents the Reinventing the wheel.

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Why Benchmarking?
Benchmarking gives us the chance of
gaining:
Better Awareness of Ourselves (Us)
What we are doing
How we are doing it
How well we are doing it

Better Awareness of the Best (Them)

What they are doing
How they are doing it
How well they are doing it
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Why Benchmarking
Performance
Improvement
Meeting
Quality
Standards

Innovation
In
Management
Methods

Creative
Thinking

Benchmarking

Cope with
Competitive
Markets
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Keep Pace with

Science and
Technology
Changes

Meeting
Customers
Expectations

Three Major Benefits of

Benchmarking
Product and Process Improvement

Cost Reduction

Competitive Strategy

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Product and Process

Improvement
In
general,
by
implementing
benchmarking activity, organizations can
improve their operation process (Slack
et al, 2001).
For instance, South African Breweries
plc had encountered the problem of poor
employee skill, which is a significant
difficulty to implement the world-class
processes.
As such, they decided to benchmark
strategy from an organization in Geneva.
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Cost Reduction
Benchmarking facilitates a reduction of
operation
costs
.
For
example,
benchmarking
helped
Australian
Financial Institutes to reduce operation
costs by outsourcing some operation and
alternating
distribution
channels
(Delpachitra et al, 2002).

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Competitive Strategy
Build core competencies that will help to
sustain competitive advantage
Access to a variety of markets
Perceived benefit of product or service will
increase
Product or service is hard to imitate
Low-cost leader

Target specific shift in strategy

Entering new markets
Developing new products

To create a firm more adaptable to

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Why Benchmarking?
Benchmarking stimulates seeking new ways of
doing things and promotes a culture that is
receptive to fresh approaches and ideas.

Benchmarking provides opportunities for staff to

learn new skills and be involved in the
transformation process from the outset.

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Why Benchmarking?

It is an effective wake-up call and helps to make

a strong case for change.

Offers practical ways in which step changes in

performance can be achieved by learning from
others who have already undertaken comparable
changes.

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Benchmarking Becoming More

Common
There
are
three
reasons
benchmarking
is
becoming
commonly used in industry .

that
more

Benchmarking is a more efficient way to

make improvements. Managers can eliminate
trials and errors.
Benchmarking speeds up organizations
ability to make improvements. Today, time is
of the essence.
Benchmarking has the ability to bring your
performance up as a whole significantly.
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Why Benchmarking?

Those who benchmark

do not have to reinvent
the wheel (Parker,
1996).

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Dr. Zargari

When
organizations
want to
improve their
performance,
they

Benchmark
ing,
Dimensions
& Types
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Dimensions of Benchmarking
Benchmarking
encompasses
Total Quality
aspects of the
organization
leading to
Business
Excellence:

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Vision and
Mission

Leadership
Style

Management
Systems
Benchmarking

Employee
Behavior

Organizational
Structure

What to Benchmark?
In practice, selecting the appropriate
activity to benchmark is significant to an
effectiveness of benchmarking .
As noted by Porter (1985), the process or
activities in value chain, which are
primary activities (inbound and outbound
logistics, operations, marketing and
sales, and service) and support activities
(firm infrastructure, human resource
management, technology development
and procurement) should be considered
for benchmarking.

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Types of Benchmarking
On the basis of What is being
compared with other organizations and
Who is being compared with our
organization, we can classify
benchmarking.
What is
Who is being
being
compared with
compared with
our
other
organization
organizations

vs.

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Types of Benchmarking
On the basis of What is being
compared with other organizations we
have four main types. These four major
types of benchmarking are evolutionary
beginning with product, through to
functional (performance), process and
strategic benchmarking.
Process
Performance
Product
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Strategic

Types of Benchmarking
On the basis of Who is being
compared with our organization, we
have these categories:
Best of the Best
Best in Class
International
Generic
Internal vs. External

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What

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1-Product Benchmarking

The process of designing new products or

upgrades to current ones. This process can
sometimes involve reverse engineering
which is taking apart competitors products
to find strengths and weaknesses.
Many firms perform product benchmarking
when designing new products or upgrades
to current products.
Providing an external perspective on
opportunities
to
improve
products,
technology, manufacturing and support
processes,
the
product
development
process, and engineering practices are core

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2-Performance Benchmarking

Performance benchmarking focuses on

assessing competitive positions through
comparing the products and services of
other competitors.
When dealing with performance
benchmarking, organizations want to
look at where their product or services
are in relation to competitors on the
basis of things such as reliability, quality,
speed, and other product or service
characteristics.
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2-Performance Benchmarking

Assessing relative level of performance

in key areas or activities in comparison
with others in the same sector and
finding ways of closing gaps in
performance.

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3-Process Benchmarking

Process benchmarking focuses on the

day-to-day operations of the
organization.
It is the task of improving the way
processes performed every day.
Some examples of work processes that
could utilize process benchmarking are
the customer complaint process, the
billing process, the order fulfillment
process, and the recruitment process.
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3-Process Benchmarking

Process Benchmarking" is generally

higher-level and less number-intensive
than metrics.
Demonstrate how top performing companies
accomplish the specific process in question.
Takes form of research, surveys/interviews,
and site visits.
By identifying how others perform the same
functional task or objective, firms gain
insight and ideas they may not otherwise
achieve.
A true value-added feature of benchmarking
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3-Process Benchmarking

Wisdom from Texas Instruments:

Unless you change the

process, why would you
expect the results to
change

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4-Strategic Benchmarking

Strategic benchmarking deals with top

management.
It deals with long term results. Strategic
benchmarking focuses on how companies
compete.
This form of benchmarking looks at what
strategies the organizations are using to
make them successful.
This is the type of benchmarking technique
that most Japanese firms use (Bogan, 1994).
This is due to the fact that the Japanese
focus on long term results.

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4-Strategic Benchmarking

This is concerned with comparing

different companies' strategies and
assessing the success of those
strategies in the marketplace. Analyzes
the strategies with particular reference
to:

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strategic intent
core competencies
process capability
product line
strategic alliances
technology portfolio

4-Strategic Benchmarking

Strategic benchmarking is a proactive

analysis of emerging trends and options
in different markets, processes,
technologies and distributions which
could significantly affect the strategic
direction of economies.
It is the broadest form of benchmarking
and involves observing how others
compete. This type is usually not
industry specific, meaning it is best to
look at other industries.
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Who

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1-Internal Benchmarking

This refers to the analysis and

comparison of one or more units within
the same organization.
It is often the case when organizations
Advantage:
haveSharing
an in-house best
practice area.
opinions
between
departments
within the
same
organization.

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easier to implement
easier to access
data
Disadvantage:
External ideas
blocked

1-External Benchmarking

Where examples of good practices can

be found in other organizations and
there is a lack of good practices within
internal business units.
Comparison with external organizations
Advantage:
leads
to
discovery
of
new ideas,
The gap between
Helps to measure ones own
performance
methods,
and
services.
internal products
and
external practices
displays the way
where to change
and if there is any
need to change.

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Helps to search for best

practices
Disadvantage:
Takes time
Requires support
Legal/ethical issues
Industrial espionage

2-Generic Benchmarking

Comparisons of business process or

functions that are very similar,
regardless of industry.

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3-Best-in-class Benchmarking

Best-In-Class
Generally, initiator firms will choose to
benchmark the best-in-class.
Best-in-class refers to those firms or
organizations that have been recognized as
the best in an industry based on some
criterion.

Objective
The objective of best-in-class is to provide a
basis for continual improvement.

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4-Best of the best Benchmarking

Best-of-the-Best
After becoming a best-in-class firm, it may
be difficult to gain new insight and
information from direct competitors.
Therefore, the next level of improvement is
called best-of-the best or best-in-the-world.

Dont limit your effort to

players inside the
industry only!
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Other
Types of
Benchmark
ing
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Types of Benchmarking
There are several other classifications
for benchmarking, based on partner
type, adoption level and target process,
etc. Following are the most used types:
Internal
External
Competitive
Functional
Generic

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1-Competitive Benchmarking

Competitive benchmarking is the most

difficult type of benchmarking to practice.
For obvious reasons, organizations are not
interested in helping a competitor by sharing
information.
This form of benchmarking is measuring the
performance, products, and services of an
organization against its direct or indirect
competitors in its own industry.
Therefore, it is industry or business type
specific. It is especially beneficial to
organizations managing a specialized type of
Dr. Zargari

1-Competitive Benchmarking

Competitive Benchmarking is the

continuous measurement of the
companys products, services,
processes and practices against the
standards of best competitors and other
companies who are recognized as
leaders.
It is also important to remember when
using competitive benchmarking that
the goal is to focus on your direct
competitors and not the industry as a
whole.

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2-Functional Benchmarking

Functional benchmarking - a company

will focus its benchmarking on a single
function to improve the operation of that
particular function.
Complex functions such as Human
Resources, Finance and Accounting and
Information and Communication
Technology are unlikely to be directly
comparable in cost and efficiency terms
and may need to be disaggregated into
processes to make valid comparison.
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2-Functional Benchmarking

Comparative research to seek worldclass excellence by comparing business

performance not only against
competitors but also against the best
businesses operating in a different
Advantage:
industry.
Discovering innovative
Comparing
functions

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practices

Disadvantage:
Not suitable for every
organization or every
function

3-Collaborative Benchmarking

Benchmarking, originally described as a

formal process by Rank Xerox, is usually
carried out by individual companies.
Sometimes it may be carried out
collaboratively by groups of companies
(e.g. subsidiaries of a multinational in
different countries).
One example is that of the Dutch
municipally-owned
water
supply
companies, which have carried out a
voluntary
collaborative
benchmarking
process since 1997 through their industry
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3-Collaborative Benchmarking

With collaborative benchmarking,

information is shared between groups of
firms.
It is a brainstorming session among
organizations. It is important to realize
that not all collaborative efforts are
considered benchmarking.
It is sometimes called data sharing."

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4-Financial Benchmarking

Performing a financial analysis and

comparing the results in an effort to
assess your overall competitiveness and
productivity.

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Benchmarking Methodology
Look for Benchmarking Opportunities
Everywhere

Best Practice
Overlap

Competitive

Industry leaders
Top performers with
similar operating
characteristics

Functional
Top performers
regardless of industry
Aggressive innovators
utilizing new
technology

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Internal
Top performers
within company
Top facilities
within company

Commonly Benchmarked
Performance Measures
Financial Ratios

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Commonly Benchmarked
Performance Measures

Financial Ratios: Such as ROA or ROI are proba

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Commonly Benchmarked
Performance Measures

Customer-related Results: Include customer sa

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Commonly Benchmarked
Performance Measures

Human Resource Measures: May include emplo

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Commonly Benchmarked
Performance Measures

Market Share Data: Includes shares in the diffe

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Survey

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Survey

(Slide 1 of 3)

In 2008, a comprehensive survey on

benchmarking was commissioned by
The Global Benchmarking Network, a
network of benchmarking centers
representing 22 countries.
Over 450 organizations responded from
over 40 countries. The results showed
that:

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Survey (Slide 2 of 3)
Mission and Vision Statements and
Customer (Client) Surveys are the most
used (by 77% of organizations of 20
improvement tools, followed by
SWOT analysis(72%), and Informal
Benchmarking (68%).
Performance Benchmarking was used by
(49%) and Best Practice Benchmarking
by (39%).

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Survey (Slide 3 of 3)
The tools that are likely to increase in
popularity over the next three years are
Performance Benchmarking, Informal
Benchmarking, SWOT, and Best Practice
Benchmarking.
Over 60% of organizations that are not
currently using these tools indicated
they are likely to use them in the next
three years.

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Top-10 Benchmarked Business

Processes
Business Process
EMPLOYEE RECOGNITION
PROCESS IMPROVEMENT MANAGEMENT
PROCUREMENT PURCHASING
MANAGEMENT OPERATIONS POLICY LEADERSHIP
BENCHMARKING
EMPLOYEE DEVELOPMENT TRAINING
MARKETING
ASSET MANAGEMENT
BALANCED SCORECARD
CORPORATE GOVERNANCE

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Ranki
ng
1
2
3
4
5
6
7
8
9
10

TOP-10 Benchmarking
Organizations
The following is a ranking of
organizations that are heavily engaged
in benchmarking.
These organizations have implemented
internal benchmarking methodologies to
support their entire organizations' efforts
to improve their products and services.
These organizations are excellent role
models for you to learn how to deploy
benchmarking throughout your
workgroup, department, division or
Dr. Zargari

TOP-10 Benchmarking
Organizations
Organization

Ranking

Xerox

U.S. Army

Corning

Abu Dhabi Food Control Authority

Internal Revenue Service

United Technologies

DynMcDermott

Dubai Municipality

Dubai Chamber of Commerce and Industr

y
Allergan

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10

Benchmark
ing
Process
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Benchmarking in Business
Excellence Model
Visio
n
Missio
n
Objective
s
Areas to be Addressed
Measurement Indicators
QUALITY INITIATIVES
ISO

Benchmarking KM
Six Sigma
Suggestion
Kaizen
Schemes

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Quality Circles

BSC

5S

Professional Circles

Parties to Benchmarking
Relationship
There are two parties to each
benchmarking relationship: an initiator
firm and a target firm.
The initiator firm is the firm that initiates
contact and studies the other firm.
The target firm is the firm that is being
studied (also called the benchmarking
partner).

Initiat
or

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Target

Benchmarking Process
There are various methods of
benchmarking and a variety of
methodological processes in
benchmarking mechanisms and
implementation.
Some important organizations have
developed their own benchmarking
process.

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General Benchmarking
Process
Plan
Select Process
Understand Process
Select Partners

Analyze
Collect Data
Establish the gap
Identify process changes
Target future goals

Act
Communicate
actions
Develop
improvement plan
Implement
Review Progress
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A Benchmarking Process

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1. IDENTIFY WHAT IS TO BE
BENCHMARKED

PLANNING

2. IDENTIFY COMPARATIVE COMPANIES

3. DETERMINE DATA COLLECTION METHOD
AND COLLECT DATA

ANALYSIS

4. DETERMINE CURRENT
PERFORMANCE "GAP"
5. PROJECT FUTURE PERFORMANCE
LEVELS

INTEGRATION

6. COMMUNICATE BENCHMARK FINDINGS

AND GAIN
ACCEPTANCE
7. ESTABLISH FUNCTIONAL GOALS
8. DEVELOP ACTION PLANS

ACTION

9. IMPLEMENT SPECIFIC ACTIONS AND

MONITOR PROGRESS
10. RECALIBRATE BENCHMARKS

MATURITY

LEADERSHIP POSITION ATTAINED

PRACTICES FULLY INTEGRATED
INTO PROCESS

Gap Analysis
When done well, benchmarking
prominently reveals gaps between the
performance of the bench marker and
that of a best practices leader, and
that leads to developing sustainable
competitive advantage.

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Gap Analysis (Spider chart)

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Methodology of Benchmarking

AT&T
Vs

XEROX
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Xerox Experience-1

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(Brogan,

1994)
The Xerox of today is not the Xerox of the
sixties and seventies. During that time
period the organization experienced market
erosion from competitors, primarily
Japanese.
These competitors were marketing higher
quality products in the United States at the
same price or lower as Xerox.
Xerox found that the Japanese were able to
assemble quality products at a low price.
This was hard for Xerox to grasp because
they were the first to develop the
photocopy and their name had come to be

Xerox Experience-2

(Brogan,

1994)
How could the Japanese be beating them at
their own game? Xerox found that they had
to regroup. In doing this they made
competitive benchmarking a fundamental
part of their operations.
Xerox began to study other organizations
within and out of their industry. By 1983,
Xerox had bench marked more than 230
process performance areas in their
operation.
Identifying the best processes used by
others, Xerox adapted them for their own
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Xerox 12-Step Benchmarking

Process-1
Phase 1: Planning
1. Identify what to benchmark;
2. Identify comparative companies;
3. Determine data collection method &
collect data.

Phase 2: Analysis
4. Determine current performance gap;
5. Project future performance levels.

Phase 3: Integration
6. Communicate finding and gain
acceptance;
Dr. Zargari 7. Establish functional goals.

Xerox 12-Step Benchmarking

Process-2
Phase 4: Action
8. Develop action plans;
9. Implement specific actions & monitor
progress;
10. Recalibrate benchmarks.

Phase 5: Maturity
11. Attain leadership position ;
12. Fully integrate practices into processes.

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Benchmarking Process-APQC
American Productivity & Quality Center
defines benchmarking process in four
steps:

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Planning
Data collection
Analysis
Adapting & Improving

Benchmarking Process
In benchmarking metrics" give
numerical standards against which a
companys own processes can be
compared. Some examples of metric
benchmarks are:
Finished-product first-pass yield of 97%
Scrap/rework less than 1% of sales
Cycle time less than 25 hours
Customer lead times less than 20 days
Productivity levels of $150,000 or more per
employee
Plant-level ROA better than 15%
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Benchmarking Process
In benchmarking:
Measure whats needed, not whats easy.
Broad measures of performance fail to give
you actionable information.
You dont need a 1000 measures, just find
the key indicators that serve as critical
factors.
Finding balance is important..dont let a
non-benchmarked metric go bad.

Dr. Zargari

Six Principles of
Benchmarking
Any acceptable benchmarking should
have these six features:

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Comprehensive
Credible
Comparative
Performance-oriented
Confidential
Continuous assessment

Benchmarking Process
Why businesses are not willing to do
multi-step benchmarking?
Takes too long often six to nine months
Its costly
The lessons learned may or may not get
translated to practice and improvement
Reports that get shelf space, not action
Cumbersome process to complete
Limits Flexibility - procedures oriented

Dr. Zargari

Creative Benchmarking*
Creative Benchmarking:
Start from the customers point of view
List each step of the customers buying
experience
Next, determine which factors most
influence customers perception of value at
each step
Finally, identify companies that excel at
each factor without regard to their
industry!
* (Derived from the work of Dawn Lacobucci and Christie
Nordhielm, Kellogg Graduate School of Management)
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Fast-Cycle Benchmarking
Fast-Cycle Benchmarking is:
Less elaborate than traditional multi-step
More tactical
What do concrete trucks and pizza have in
common?

Useful to Identify specific operation

problems or opportunities
Instead of copying from others, use the data
to stimulate generation of creative ideas

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Fast-Cycle Benchmarking
Figure out what you are looking for and
bring it in.
Look for practices that can spark ideas,
dont just replicate what you find.
Figure out where benchmarking fits in
your tool chest, and make an informed
decision about the outcome you are
really after.

Dr. Zargari

Fast-Cycle Benchmarking
Benchmark companies roughly at your
own level!
College physics before high school math
doesnt make any sense
Forget the world class company (unless you
are one!)..find a firm of similar size and
situation as yours

Benchmark companies with similar

business needs
Common concerns promote a more
productive exchange or transportability of
the information learned
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Benchmark
ing
Essentials
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Benchmarking Essentials
Top management support and guidance

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Benchmarking Essentials
Clearly defined purpose

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Benchmarking Essentials
Must establish & enforce milestones

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Benchmark
ing
Costs
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Benchmarking Costs
The three main types of costs in
benchmarking are:

Database
Costs

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Benchmarking Costs
Time Costs - Members of the
benchmarking team will be investing
time in researching problems, finding
best practice 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.

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Benchmarking Costs
Visit Costs - This includes hotel rooms,
travel costs, meals, a token gift, and lost
labor time.

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Benchmarking Costs
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.

Dr. Zargari

Benchmark
ing
Ethics
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Benchmarking Ethics
Since the concept of benchmarking can
lead to unscrupulous and sometimes
unethical behavior, the SPI Council on
Benchmarking and the International
Benchmarking Clearinghouse have
established a general code of conduct
(Thompson). The code is as follows:

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Benchmarking Code of
Conduct

Do not ask competitors for sensitive information. Do not m

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Benchmarking Code of
Conduct

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Benchmark
ing
Pitfalls
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Benchmarking Pitfalls
Benchmarking is NOT:
Tour visits to other competitors or
organizations.
Performance measurement, its part of
benchmarking process. i.e. competitive
analysis.
A cost-cutting exercise.
Imitating others practices or processes, its
How to not What is.
A public relations exercise.

Dr. Zargari

Benchmarking Pitfalls
Failure to consider organizational
cultures or circumstances leads to a
wrong direction.
Insufficient preparation usually results in
MBWAA (management by wandering
around aimlessly!).
What are you trying to learn about?
Why do you want to learn it?
What will you do with it to make your
processes better once you have it?
Dr. Zargari

Benchmarking Pitfalls
Lack of sponsorship

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Benchmarking Pitfalls
Fear of being seen as copying

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When not to Benchmark

Target is not critical to the core business functio

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Specialized Organizations
There are international organizations
specialized in benchmarking services,
e.g.,

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Global Benchmarking Council

American Productivity and Quality Center
Asian Benchmarking Clearinghouse
Hong Kong Benchmarking Clearing house

Final Remarks
Benchmarking does not come as a
natural process for many
competitiveness does, but not
benchmarking, because benchmarking
requires a team approach.
In Benchmarking The Key is to
Adapt not Adopt Professor
Deming

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Give
Benchmarkin
g a Chance Its Worth It.
Dr. Zargari

REFERENCES
Anderson, B. (1999), Industrial benchmarking for
competitive advantage, Human Systems Management,
Vol. 18 No. 3.
Bogan, C.E. and M.J English (1994), Benchmarking for
Best Practices: Winning Through Innovative Adoption,
New York: McGraw-Hill.
Boxwell, Robert (1994), Benchmarking for a
Competitive Advantage, McGraw Hill, 1994
Delpachitra S. and D. Beal. (2002) Process
benchmarking: an application to lending products,
Benchmarking: An International Journal, Vol. 9, No. 4.
Davies, A. J. and Ashok K. K. (1999), Why British
companies dont do effective benchmarking,
Integrated Manufacturing Systems, Vol. 10, No.1.
Graham, Anne (1997), Association Publications:
Dr. Zargari

REFERENCES
Harper, Kim (1996), Benchmarking: International
Clearinghouse Plays Matchmaker for Companies That
Want to Improve, Arkansas Business, vol.9, (1996).
Hinton M. et al. (2000), Best practice benchmarking in
the UK, Benchmarking: An International Journal, Vol. 7,
No. 1.
Hurmelinna P. et al. (2002), Attaining world-class R&D
by benchmarking buyersupplier relationships,
International Journal of Production Economics, Vol. 80,
No. 1.
Juran, J.M. (1993), Quality planning and analysis: from
product development through use (Third Edition),
United States of America: McGraw-Hill, Inc.
Keegan, R. (1988), Benchmarking Facts: A European
Perspective, Dublin: Oak TreePress
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REFERENCES
Kolarik, W. J. (1995), Creating Quality: Concepts,
Systems, Strategies, and Tools (International Edition),
Singapore: McGraw-Hill Book Co.
Peppard, J. (1999), Benchmarking, process reengineering and strategy: some focusing frameworks,
Human Systems Management, Vol. 18 No. 3.
Porter, M.E. (1985), Competitive Strategy: Techniques
for Analysing Industries and Competitors, Free Press,
New York
Ralston D. et al. (2001), Process benchmarking as a
market research tool for strategic planning Marketing
Intelligence & Planning, Vol. 19, No. 4.
http://www.ogc.gov.uk/documentation_and_templates_b
enchmarking.asp
http://www.ebenchmarking.com/
Dr. Zargari

REFERENCES
http://www.nhsbenchmarking.nhs.uk/
http://www.berr.gov.uk/dius/innovation/benchmarking-in
novation/index.html
Benchmarking for Best Practices: Winning Through
Innovative Adaptation, Christopher Bogan and Michael
English, McGraw Hill
www.best-in-class.com Bogans website
The International Benchmarking Clearinghouse,
www.apqc.org
www.runzheimer.com
The Business Gateway
http://www.bgateway.com/index.asp
David Stauffer, (2003) Is Benchmarking Doing the
Right Work?, Harvard Business School Publishing
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