Page 141 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes  Are there lessons to be learned from others?
 Understand and evaluate the current position of a business or organization in relation to
‘best practice’ and identify areas and means of performance improvement.

 Benchmarking provides a clear signal of success or failure of the firm’s competence to
compete effectively in the competitive arena.

 Benchmarking is often used to identify and develop core competencies and competitive
advantage.

Table 7.1: Core Competencies and Benchmarking

Type Description Most Appropriate for
Comparing with long-term strategies
Strategic and general approaches of high-
Realigning business strategies that
Benchmarking performers to improve overall
have become inappropriate
performance.
Businesses consider their position in Assessing relative level of performance
Performance or relation to performance characteristics in key areas or activities in comparison
Competitive of key products and services. with others in the same sector and
Benchmarking Benchmarking partners are drawn from finding ways of closing gaps in
the same sector. performance
Process Focuses on improving specific critical Achieving improvements in key
Benchmarking processes and operations. processes to obtain quick benefits
Businesses look to benchmark with
partners drawn from different business
Functional Improving activities or services for
sectors or areas of activity to find ways
Benchmarking which counterparts do not exist.
of improving similar functions or work
processes.
Several business units within the same
Involves benchmarking businesses or
organization exemplify good practice
Internal operations from within the same
and management want to spread this
Benchmarking organization (e.g., business units in
expertise quickly, throughout the
different countries).
organization
Where examples of good practices can
External Involves analyzing outside organizations be found in other organizations and
Benchmarking that are known to be best in class. there is a lack of good practices within
internal business units
Where the aim is to achieve world class
International Best practitioners are identified and status or simply because there are
Benchmarking analyzed elsewhere in the world. insufficient ’national’ businesses
against which to benchmark.

Self Assessment

Fill in the blanks:
5. ……………… benchmarking generally results in short term benefits.
6. ……………… Benchmarking involves benchmarking businesses or operations from within
the same organization.

136 LOVELY PROFESSIONAL UNIVERSITY