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Unit 9: Benchmarking

shocked the company. Its Japanese rivals were selling machines for about what it cost Notes
Xerox to make them. Nor could this be explained by differences in quality. The study
found that, when compared with its Japanese rivals, the company had nine times more
suppliers, was rejecting 10 times as many machines on the production line and taking
twice as long to get products to market. Benchmarking also showed that productivity
would need to grow 18 per cent per year over five years if it was to catch up with its rivals.
Rank Xerox sees benchmarking as helping it achieve two objectives. At a strategic level it
helps set standards of performance, while at an operational level it helps the company
understand the best practices and operations methods which can help it achieve its
performance objectives. The benchmarking process developed by Rank Xerox has five
phases.
Its experience of using this approach has led Xerox to a number of conclusions:

The first phase, planning, is crucial to the success of the whole process. A good plan
will identify a realistic objective for the benchmarking study, which is achievable
and clearly aligned with business priorities.
A prerequisite for benchmarking success is to understand thoroughly your own
processes. Without this it is difficult to compare your processes against those of
other companies.

Look at what is already available. A lot of information is already in the public
domain. Published accounts, journals, conferences and professional associations can
all provide information which is useful for benchmarking purposes.

Be sensitive in asking for information from other companies. The golden rule is:
‘Don’t ask any questions that we would not like to be asked ourselves.’
Questions
1. What kind of information did Xerox discover in its benchmarking study?
2. Of the five performance objectives (quality, speed, dependability, flexibility, cost)
which do you think are the most difficult to discover about your competitors’
performance?

9.8 Summary

Learning can be from both internal and external sources.
Xerox was the first organization which initiated benchmarking concept and it went on
win Malcolm Baldrige National Quality Award.

Benchmarking is a continuous, systematic process of evaluating and comparing the
capability of one organization with others normally recognized as industry leaders, for
insights for optimizing the organizations processes.

Strategic Benchmarking must begin with the assessment of the needs and expectations of
the customer.
Strategic benchmarking deals with to management and looks at what strategies the
organizations are using to make them successful.

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.

Performance benchmarking is an important technique secures external involved in the
processes or feedback to the concerned persons involved in the processes or activities.

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