Page 131 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes 4. Functional benchmarking: It is the process of benchmarking in particular functional (say
billing) areas of business to improve organizational performance.
5. Internal benchmarking: It is the process of learning from within the organization. Any
part of Organization can benchmark any process or activity from different departments or
business units within the organization. This is very useful for enhancing performance in
all business units and departments of an organization. This is very popular in large
organizations. For example, shipping and receiving at one plant can be compared with
shipping and receiving at another.
6. External benchmarking: It is the process in which organizations learn from benchmarking
with other organizations outside in any area.
7. International benchmarking: It is the process of benchmarking in which best practices
outside the country in any part of the world are identified for an organization’s
improvement.
8. Collaborative Benchmarking: Benchmarking, was originally invented as a formal process
by Rank Xerox, is usually carried out by individual companies. Sometimes it may be
carried out collaboratively by groups of companies (e.g., subsidiaries of a multinational
in different countries).

Example: The Dutch municipally-owned water supply companies have carried out a
voluntary collaborative benchmarking process since 1997 through their industry association.
And the UK construction industry has carried out benchmarking since the late 1990s again
through its industry association and with financial support from the UK Government.

Task Make a presentation on the types of benchmarking. Also mention the industries
and the companies using these benchmarking methods.

Self Assessment

Fill in the blanks:

7. …………………… benchmarking is the process of benchmarking on the products or services
of a company’s competitor’s.
8. …………………… is the process of improving organization’s long-term strategies and
general approaches to enable higher performance in various areas.
9. …………………… benchmarking is the process of evaluating processes or business
functions against the best companies, regardless of their industry.

10. …………………… is the process in which organizations learn from benchmarking with
other organizations outside in any area.
11. Product benchmarking is simply comparing the performance, features and customer
acceptance of …………………… products.

9.4 Benefits and Reasons of Benchmarking

Benchmarking, as we knew is an improvement tool. It is neither a strategy nor a philosophy.
The benefits of it, provided used properly are enormous. Some of the main benefits are:

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