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Shirley Daniels: Shirley Daniels is an independent author and consultant
Benchmarking is the process of comparison of a particular organization, plant or process with its "peers", i.e. an attempt to find out whether performance is good or bad when compared to others carrying out the same activities. It also attempts, from the various comparators, to identify "best practice" and to use that as the basis of improvement. It is naturally of most benefit when the peer organizations are selected on a global basis.
Obviously it is difficult to make the identification of the "peers" and to get permission to obtain data in sufficient detail on which to base an effective comparison - especially when the organizations may be your competitors! One way round this is to use a firm of consultants with experience of, and entree into a range of organizations in your particular sector; better still is the use of the firms which have grown up specializing in benchmarking. One such firm, operating in the US, is the Performance Benchmarking Service (PBS).
The PBS benchmarks manufacturing plants. A company completes one of the PBS's 11 "user-friendly" questionnaires and receives a customized report comparing it with similar plants on: sales growth, productivity, schedule integrity, delivery, scrap and rejects, computer use and more than 30 other measures. The PBS queries its database of 600-1,200 plants and custom-selects a set of 25 or more that fit the client's industry-price-volume-integration profile.
Customized benchmarking reports can be generated for any manufacturing plant. Most of the 2,000 reports that the PBS has produced since its launch in 1992 have been commissioned on behalf of manufacturing companies by field agents of the 50 outreach centres affiliated with the Manufacturing Extension Partnership of the US Commerce Department's National Institute for Standards and Technology. The 30 Industrial Resource Assistance Program centres of Canada's National Research Council also regularly commission reports on behalf of their clients and prospects. However, several hundred companies a year also order reports directly.
What can benchmarking do for me?
Knowing how you compare (quantitatively and in detail) to your competitors can help you:
- understand the factors that make a successful organization;
- identify your problem areas;
- see where you need to improve.
The benchmarking...