3 min read

By: Adebayo B. Olanrewaju 

Benchmarking is the process of comparing the current project, methods, or processes with the best practices and using the information gathered to drive improvement of overall company performance.

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Applications of Benchmarking

These applications can be grouped into distinctive types such as the following:

  • Process Benchmarking

Process benchmarking places emphasis on discrete work processes and operating systems which include customer complaint process, the billing process, or the strategic planning process. The aim of this form of benchmarking is to identify the most effective operating practices from many companies that perform similar work functions.

  • Performance Benchmarking

In this, managers are able to assess their positions in the competitive market through product and service comparisons. This form of benchmarking placed high emphasis on elements of price, technical quality, ancillary product or service features, speed, reliability, and other performance characteristics.

  • Project Benchmarking

This form of benchmarking is easier than many other business processes, because of the opportunities for selecting outside of the group of direct competitors. Areas such as new product introduction, construction, or new services are activities common to many types of organizations. Even if the project objectives are different, the projects still share the same constraint factors of time, costs, resources, and performance. This type of benchmarking can be used in selecting new techniques for planning, scheduling, and controlling a project endeavor.

  • Strategic Benchmarking

Strategic benchmarking is focused on examining how companies compete. This type of benchmarking isn’t always focused on specific industries. It cuts across industries with the goal of trying to identify the winning strategies that have enabled high-performing companies to be successful in their marketplaces.

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Benchmarking Sequences

Benchmarking activities most times follow the DIAMR sequence below:

  1. Determine the current practices

    • Select the problem area.
    • Identify key performance factors.
    • Define and study your own processes and the processes of others.
    • Determine performance criteria based on needs and priorities.
  2. Identify best practices

    • Measure the performance within the organization.
    • Determine the leader(s) in the criteria areas.
    • Look for an internal or external organization to benchmark with.
  3. Analyze best practices

    • Visit the organization as a benchmark partner after prior information.
    • Collect information and data of the benchmark leader.
    • Evaluate and compare current practices with the benchmark.
    • Take note of potential improvement areas.
  4. Model Best Practices

    • Drive improvement changes to advance performance levels.
    • Extend performance breakthroughs within the organization.
    • Incorporate the new information in the decision making process of your business.
    • Share results of study with the benchmark partner.
    • Keep seeking other leaders within and/or outside of your industry for further improvement.
  5. Repeat the cycle

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About the Author

Adebayo is a thought leader in continuous process improvement and manufacturing excellence. He is a Certified Six Sigma Master Black Belt (CSSMBB) Professional and Management Systems Lead Auditor (ISO 9001, 45001, ISO 22000/FSSC 22000 etc.) with strong experience leading various continuous improvement initiative in top manufacturing organizations. 

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