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Unit 9: Benchmarking

9.2.2 Operational Benchmarking Notes

Operational Benchmarking is assessing and implementing the best practices of industry or
public service leaders to improve processes to the extent possible to meet organizational goals.
Examples of operational benchmarking studies include analysis of invoicing procedures to
determine the most productive process, evaluation of productions methods to determine the
highest through put methods that deliver lowest cost and least defects; and study of logistics
distribution methods that result in both high delivery service performance and low levels of
finished goods.
It includes:

Creating awareness and support at the senior executive level, and establishing dedicated
benchmarking resources;
Building benchmarking into business planning and continuous improvement;

Establishing operational performance levels to sustain competitive advantages;
Using a systematic, multi-step benchmarking process to improve business and work
processes, and internal and external customer satisfaction.

Self Assessment

Fill in the blanks:
3. …………………… is a tool to achieve business and competitive objectives.
4. …………………… benchmarking deals with to management and looks at what strategies
the organizations are using to make them successful.
5. Strategic Benchmarking involves studying of …………………… level strategies of
successful organizations and comparing it with the organizational strategy to get the
additional insights.
6. …………………… Benchmarking is assessing and implementing the best practices of
industry or public service leaders to improve processes to the extent possible to meet
organizational goals.

9.3 Types of Benchmarking

Benchmarking can be used in several ways. Depending ways of benchmarking or the content of
benchmarking; benchmarking can be classified into several categories. Popular methods of
benchmarking are discussed below:
1. Competitive benchmarking: Competitive benchmarking is the process of benchmarking
on the products or services of a company’s competitor’s. For example, Xerox used
competitive benchmarking to make itself more competitive.
2. Generic benchmarking: Generic benchmarking is the process of evaluating processes or
business functions against the best companies, regardless of their industry. Thus any
organization related any industry can learn from any other organization in different
industry certain best practices in different functional areas. For example, an insurance
company may benchmark a bank loan application process against its insurance claims
process.
3. Strategic benchmarking: It is the process of improving organization’s long-term strategies
and general approaches to enable higher performance in various areas like core
competencies, products, services, etc. by learning from best in the world.

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