Page 140 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 7: Efficiency and Effectiveness

(ii) Benchmarking partners are drawn from the same sector. Notes
This type of analysis is often undertaken through consultants to protect confidentiality.
3. Process Benchmarking:
(i) Focuses on improving specific critical processes and operations.
(ii) Benchmarking partners are sought from best practice organizations that perform
similar work or deliver similar services.
(iii) Process benchmarking invariably involves producing process maps to facilitate
comparison and analysis.
This type of benchmarking generally results in short term benefits.
4. Functional Benchmarking:
(i) Businesses look to benchmark with partners drawn from different business sectors
or areas of activity to find ways of improving similar functions or work processes.
(ii) This sort of benchmarking can lead to innovation and dramatic improvements.
5. Internal Benchmarking:
(i) It involves benchmarking businesses or operations from within the same
organization.
(ii) Internal benchmarking provides access to sensitive data and information;
standardized data is often readily available; and, usually less time and resources are
needed.
There may be fewer barriers to implementation as practices may be relatively easy to
transfer across the same organization. However, real innovation may be lacking and best
in class performance is more likely to be found through external benchmarking.
6. External Benchmarking:
(i) It involves analyzing outside organizations that are known to be best in class.

(ii) External benchmarking provides opportunities of learning from those who are at
the “leading edge”.
This type of benchmarking can take up significant time and resource to ensure the
comparability of data and information, the credibility of the findings and the development
of sound recommendations.

7. International Benchmarking:
(i) Best practitioners are identified and analyzed elsewhere in the world.
(ii) Benchmarking partners should be chosen such that they produce valid results.
Globalization and advances in information technology are increasing opportunities for
international projects. However, the results may need careful analysis due to national
differences.

7.2.3 Benchmarking Helps in Strategic Management Process

Evaluation and improvements are important parts of the strategic management process. How
do we judge our performance in any area of operation? This is done by ‘benchmarking’.
 Benchmarking is the process of identifying ‘best practice’ in relation to both products
(including) and the processes by which those products are created and delivered.

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