Benchmarking stages - GovtVacancy.Net

Benchmarking stages - GovtVacancy.Net
Posted on 04-11-2022

Benchmarking stages

In this article, we will explain the stages of Benchmarking. Benchmarking is associated with emulation and learning from those who do things well; it is learning from the best or most capable for our own improvement and it is a technical process where we will learn the practices of the most competent.

There are 5 basic stages in the development of Benchmarking:

  • Choice or planning of the area to work
  • Determining "Top" or "Best in Class" Companies to Compare
  • Obtaining the information
  • Comparison and data analysis
  • Adoption of applicable processes or policies

We will explain each of the Benchmarking stages but first a basic notion of the Benchmarking concept:

Benchmarking is a methodology to improve the direction and proper functioning of a company and is defined as a continuous process of measuring own products or processes with respect to competitors that are more advantaged or leaders in the market in order to learn from them and improve their own practices to be more competitive.

Supplementary definition:

BMK: Compare a company (products, services, and processes) with another that is a leader in the same market, in order to reproduce what has led to its success

Understanding the reason for the success of others then becomes the pillar of benchmarking, not necessarily to copy but rather to understand the reason for the success of others and how we can improve ourselves.

Although this post will only focus on the Benchmarking Stages, the following video can be very useful to understand the Concept, types, and main characteristics of this business technique. By UNMSM.

Benchmarking stages:

Like any process, benchmarking must meet certain stages or phases which must generate concrete results in order to move forward.

In benchmarking, this process will involve analyzing our own business or company, defining our objective of the external study or the Top on which we want to focus, and then investigating it, obtaining the relevant information, and eventually, processing and drawing conclusions and possible points for improvement of this learning. for our own business. Now if the stages of Benchmarking

1. Choice or planning of the area to work

The first step in doing Benchmarking is to identify the areas or products that are going to be analyzed in comparison with the best. It is important to clearly identify how far you want to go with the comparison and clearly define what is going to be measured, how it is going to be measured, and what the scope of the work is going to be.

In order to quantify and compare we must answer precise questions, for example:

  • What is the cost of generating a manufacturing process for a product?
  • How many steps are generated to bring a product to market?
  • What materials are used to manufacture a product according to the existing regulation?

By being clear about what is going to be measured, we will have to make the corresponding measurements in our own company and logically have our own basis for comparison.

2. Determining the “Top” or “Best in Class” companies compare

The second stage of benchmarking is basically to look at the market, and the competition and identify the best in the areas that we are going to analyze and that they do not leave the environment or process that we are analyzing.

At present, there is talk of generic competition (basically a global analysis of the market) and direct competition, but in the end, the issue is to know who, how, and why the competitor or the market does it better than us.

To avoid bias in measurement, it is imperative to see exact and reliable figures and answer questions that can bring us closer to the best in the market, but that is clearly in a space similar to ours. It makes no sense to analyze a multinational company if our product is local or to see figures from companies that have fundamentally different market conditions than their own.

3. Obtaining the information

It is imperative to search for as many sources of information, analyze the product of the competition, look at their processes, resources, distribution, logistics partners, etc., and logically focus on the metrics that you want to study and compare.

Analyzing the best is basically the heart of Benchmarking and getting information about what our peers are doing is probably the biggest difficulty in benchmarking.

Benchmarking has a strong relationship with the analysis of the competition and therefore analyzing others in a clear, precise, and above all real way will be the key to success in this process.

4. Comparison and analysis of the information obtained

By tabulating and organizing the information obtained, the points for improvement and the strengths of the best in the investigated areas will begin to be seen, when analyzing the information the differences in the practices, products, or processes investigated will be seen and from the analysis of the information conclusions about weaknesses and opportunities for improvement for the person doing the analysis.

From this analysis, specific answers will come out that will help us answer the questions raised in the first part of the process, for example:

  • The competitor company does 5 processes than our company without sacrificing quality and manages a 10% lower cost when manufacturing.
  • Our company to be analyzed has its own product distribution network and delivers its products on average 20% faster.
  • The competition uses manufacturing materials imported from another country and can reduce the cost of production by 35% compared to the costs managed by our company.

With the comparison of the information, the points that make our competitors more competitive must be understood.

5. Adoption of applicable processes and policies to improve the performance of the analyzed area

From the analysis carried out, the principles of organizational change or the so-called opportunities for improvement that the company must apply will be based.

In response to the benchmarking analysis carried out, the company will correct, update or improve its processes and in this way, in the long term, it will reach a level of competitiveness and efficiency similar to that of the Top companies in the market and eventually trying to become a benchmark in the market. market itself.

Recognizing that we are not "number 1" and that we can always emulate the best, is the essential essence in the implementation of Benchmarking

Thank You