Benchmarking: the path to continuous improvement
Benchmarking is a tool that allows companies to systematically compare their processes, products and performance with the best in the industry. In the context of manufacturing companies, benchmarking becomes a key element for achieving competitive advantage and continuous improvement.
History of benchmarking
The concept of benchmarking became more widely used in the 1970s, although its roots go back further in history. It is Xerox that is considered a pioneer in this field. Inspired by Japanese manufacturing methods, Xerox began to benchmark its processes against the best in various industries. This innovation quickly spread and today benchmarking is an integral part of the management tools of many companies around the world.
Benchmarking in practice
Benchmarking in manufacturing companies focuses on a wide range of areas, from production processes and logistics to product quality and resource efficiency. Through benchmarking, manufacturing companies can identify best practices, eliminate inefficiencies and set ambitious targets.
Types of benchmarking
There are several types of benchmarking, which differ depending on who the company is being compared to:
- Internal benchmarking: compares different departments or plants within the same company.
- Competitive benchmarking: a company compares its processes and performance with direct competitors.
- Functional benchmarking: The firm focuses on specific functions or processes, such as inventory management or facilities maintenance, and compares itself to firms that are considered the best in that area.
- Generic benchmarking: The firm looks for best practices in completely different industries that could be applied to its own business.
Proces benchmarkingu
The benchmarking process is a systematic procedure that allows companies to identify their strengths and weaknesses compared to competitors or industry best practice. The process involves several phases that build on each other to create a comprehensive view of how a company is performing and where it has room for improvement.
The first step is to clearly define the benchmarking objectives. The company must determine exactly what it wants to achieve through benchmarking. Does it want to improve product quality, reduce costs, shorten lead times, or something else? These objectives will then determine which processes and indicators will be benchmarked. Key processes and performance indicators are then identified. The company needs to map its main processes and select those that are most important for achieving the set objectives. The third step is the selection of benchmarking partners. The firm must find organisations that are considered to be the best in the field. These partners can be direct competitors, other firms in the same industry, or even firms in other industries that have similar processes. The fourth stage involves data collection. The firm must obtain detailed information about its own processes and those of the benchmarking partners.
Data collection is followed by data analysis. The firm compares its results with those of benchmarking partners and identifies areas where it lags behind and where it has a competitive advantage. Based on this analysis, conclusions and recommendations for improvement are drawn. The final step is to implement the changes. The company must translate the benchmarking findings into concrete action plans. These plans should include precise objectives, responsibilities and timelines.
However, the benchmarking process is cyclical. Once the changes have been implemented, it is necessary to regularly monitor the results and evaluate whether the goals have been achieved. If not, the benchmarking process needs to be repeated and the action plans adjusted. Through regular benchmarking, companies can continuously improve their performance, increase their competitiveness and achieve better results.
