A.

Understand what is a benchmark and how it is used a performance evaluation and

improvement tool.

Benchmarking is defined as the process of measuring products,

services, and processes against those of organizations known to
be leaders in one or more aspects of their operations.
Benchmarking provides necessary insights to help you understand
how your organization compares with similar organizations, even if
they are in a different business or have a different group of
customers.

 cost per unit, time to produce each unit, quality of

each unit, and customer satisfaction.

Differences Between Benchmarking and Competitor

Research
Benchmarking Competitor Research
Focuses on best practices Focuses on performance
measures
Strives Bandage or quick fix
for continuous improvement
Partnering to share Considered corporate
information spying by some
Needed to maintain a Simply a “nice to have”
competitive edge
Adapting based Attempting to mirror
on customer needs after another company/process
examination of the best

B. Discuss the fundamental concepts of Benchmarking and Bench Trending

Benchmarking 

 Benchmarking is the process of evaluating

the business performance with
the standard business metrics of the industry. 
 These business process that
are measured for their performance
include productivity, cycle time, cost and
quality.    

Bench trending

key performance indicator

What is a KPI? KPI stands for key performance indicator, a
quantifiable measure of performance over time for a specific
objective.

 Bench trending is used

for monitoring the performance and operations f
or bringing improvements and setting a direction
 These are methods which are used for
bridging the gaps and improving performance
levels though various new technologicalmethods

C. Examine the different types of benchmark and how each is applied as performance
evaluation tool in different organizations.

Internal benchmarking is used when a company already

has established and proven best practices and they simply
need to share them. Again, depending on the size of the
company, it may be large enough to represent a
broad range of performance (i.e., cycle time for opening
new accounts in branches coast to coast). Internal
benchmarking also may be necessary if comparable
industries are not readily available.

Competitive benchmarking is used when a company

wants to evaluate its position within its industry. In
addition, competitive benchmarking is used when a
company needs to identify industry leadership
performance targets.

Strategic benchmarking is used when identifying and

analyzing world-class performance. This form of
benchmarking is used most when a company needs to go
outside of its own industry. Six Sigma often uses Hoshin
to ensure that all employees are knowledgeable about the
strategic direction for the company. Within a company’s
Hoshin plan, goals are established relative to benchmarks
set by world-class organizations. Often, these benchmarks
are obtained from outside industries.

Performance benchmarking. This involves

collecting information on how well you’re doing
in terms of outcomes (which could mean
anything from revenue growth to customer
satisfaction) and comparing these outcomes
internally or externally. This can also refer to
functional performance benchmarking, such as
benchmarking the performance of the HR
team (using metrics like employee net
promoter score or staff engagement surveys)
or the marketing team (measuring net
promoter score or brand awareness, for
instance).

D. Discuss the stages in the process of benchmarking and identify the different variables
considered in each stage.

Introduction
If a company is to be successful, it needs to evaluate its
performance in a consistent manner.
In order to do so, businesses need to set standards for
themselves and measure their processes and
performance against recognized industry leaders or
against best practices from other industries, which operate
in a similar environment.
This is commonly referred to as benchmarking in
management parlance.
The benchmarking process is relatively uncomplicated.
Some knowledge and a practical dent is all that is needed
to make such a process a success.
Therefore, for the benefit of corporate executives,
students and the interested general populace, the key
steps in the benchmarking process are highlighted below.

A Step-by-Step Approach to
Benchmarking
Following are the steps involved in benchmarking process:
(1) Planning
Prior to engaging in benchmarking, it is imperative that
corporate stakeholders identify the activities that need to
be benchmarked.
For instance, the processes that merit such consideration
would generally be core activities that have the potential to
give the business in question a competitive edge.
Such processes would generally command a high cost,
volume or value. For the optimal results of benchmarking
to be reaped, the inputs and outputs need to be redefined;
the activities chosen should be measurable and thereby
easily comparable, and thus the benchmarking metrics
needs to be arrived at.
Prior to engaging in the benchmarking process, the total
process flow needs to be given due consideration. For
instance, improving one core competency at the detriment
to another proves to be of little use.
Therefore, many choose to document such processes in
detail (a process flow chart is deemed to be ideal for this
purpose), so that omissions and errors are minimized;
thus enabling the company to obtain a clearer idea of its
strategic goals, its primary business processes, customer
expectations and critical success factors.
An honest appraisal of the company's strengths,
weaknesses and problem areas would prove to be of
immense use when fine-tuning such a process.
The next step in the planning process would be for the
company to choose an appropriate benchmark against
which their performance can be measured.
The benchmark can be a single entity or a collective group
of companies, which operate at optimal efficiency.
As stated before, if such a company operates in a similar
environment or if it adopts a comparable strategic
approach to reach their goals, its relevance would, indeed,
be greater.
Measures and practices used in such companies should
be identified, so that business process alternatives can be
examined.
Also, it is always prudent for a company to ascertain its
objectives, prior to commencement of the benchmarking
process.
The methodology adopted and the way in which output is
documented should be given due consideration too. On
such instances, a capable team should be found in order
to carry out the benchmarking process, with a leader or
leaders being duly appointed, so as to ensure the smooth,
timely implementation of the project.
(2) Collection of Information
Information can be broadly classified under the sub texts
of primary data and secondary data.
To clarify further, here, primary data refers to collection of
data directly from the benchmarked company/companies
itself, while secondary data refers to information garnered
from the press, publications or websites.
Exploratory research, market research, quantitative
research, informal conversations, interviews and
questionnaires, are still, some of the most popular
methods of collecting information.
When engaging in primary research, the company that is
due to undertake the benchmarking process needs to
redefine its data collection methodology.
Drafting a questionnaire or a standardized interview
format, carrying out primary research via the telephone, e-
mail or in face-to-face interviews, making on-site
observations, and documenting such data in a systematic
manner is vital, if the benchmarking process is to be a
success.
(3) Analysis of Data
Once sufficient data is collected, the proper analysis of
such information is of foremost importance.
Data analysis, data presentation (preferably in graphical
format, for easy reference), results projection, classifying
the performance gaps in processes, and identifying the
root cause that leads to the creation of such gaps
(commonly referred to as enablers), need to be then
carried out.
(4) Implementation
This is the stage in the benchmarking process where it
becomes mandatory to walk the talk. This generally
means that far-reaching changes need to be made, so
that the performance gap between the ideal and the actual
is narrowed and eliminated wherever possible.
A formal action plan that promotes change should ideally
be formulated keeping the organization's culture in mind,
so that the resistance that usually accompanies change is
minimized.
Ensuring that the management and staff are fully
committed to the process and that sufficient resources are
in place to meet facilitate the necessary improvements
would be critical in making the benchmarking process, a
success.
(5) Monitoring
As with most projects, in order to reap the maximum
benefits of the benchmarking process, a systematic
evaluation should be carried out on a regular basis.
Assimilating the required information, evaluating the
progress made, re-iterating the impact of the changes and
making any necessary adjustments, are all part of the
monitoring process.

E. Identify the pre-requisites of benchmarking.

F. Determine the difficulties in implementing benchmarking and how can these be addressed
by the organization.
G. Distinguish bench trending from benchmarking.

Determine how this performance evaluation and improvement tool is used in different
industries.