Our book, Operations Management Sustainability and Supply Chain Management defines benchmarking as “ selecting a demonstrated standard of performance that represents the very best performance for a process or an activity.” There are five steps to creating a successful benchmark: determine what to benchmark, form a benchmark team, identify benchmarking partners, collect and analyze benchmarking information and take action to match or exceed benchmarks. In addition, “typical performance measures used in benchmarking include percentage of defects, cost per unit or per order, processing time per unit, service response time, return on investments, customer satisfaction rates, and customer retention rates.” After these have been established, the
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All organizations should adapt this system because it is vital to always be searching for ways to improve internal and external processes to save the organization money, which in return allows the organization to make more money. In addition, it allows organizations to look internally to find which internal “units [are] superior in performance and worth learning from.” A great example is from our book where “ Xerox Europe, a $6 billion subsidiary of Xerox Corp., formed teams to see how better sales could result through internal benchmarking.” The results were amazing to say the least. They discovered that “France sold five times as many color copiers as did other divisions in Europe.” They were able to replicate their sales strategy and sales increased from anywhere from 125% to 328% in some countries. These exponential growths in sales best illustrate the value of benchmarking. If organizations are able to replicate top leaders in the industry, they will be able to lower labor cost by becoming more efficient. Moreover, organizations can improve their quality of products by figuring out how top competitors or producing their products and how to make them outlast or outperform their
All organizations should adapt this system because it is vital to always be searching for ways to improve internal and external processes to save the organization money, which in return allows the organization to make more money. In addition, it allows organizations to look internally to find which internal “units [are] superior in performance and worth learning from.” A great example is from our book where “ Xerox Europe, a $6 billion subsidiary of Xerox Corp., formed teams to see how better sales could result through internal benchmarking.” The results were amazing to say the least. They discovered that “France sold five times as many color copiers as did other divisions in Europe.” They were able to replicate their sales strategy and sales increased from anywhere from 125% to 328% in some countries. These exponential growths in sales best illustrate the value of benchmarking. If organizations are able to replicate top leaders in the industry, they will be able to lower labor cost by becoming more efficient. Moreover, organizations can improve their quality of products by figuring out how top competitors or producing their products and how to make them outlast or outperform their