Operations Management Sustainability And Supply Chain Management

704 Words Oct 19th, 2014 3 Pages
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 organization should find a similar organization that is a leader in the same area to be able to compare their progress. However, the organization they choose does not necessarily have to be in the same industry as theirs because the main objective is to find an organization that has mastered the process they need to improve. For example, Xerox and Mercedes-Benz went to L.L. Bean for order filling and warehousing benchmarks. By doing so, Xerox was able to pare warehouse costs by 10% and Mercedes-Benz began using flow charts to spot wasted motions. (Heizer and Render 214). Benchmarking is used by “executives [who] use this business data and analysis to drive strategic decisions and initiatives. Benchmarking shows the value…

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