From GP Deltapoint: Benchmarking

Mike Bresko, Managing Director, and
John McNeil, Principal Consultant

Benchmarking is one method used when defining opportunities - the first phase in the Journey to Operational Excellence.

A benchmark defines, for a given performance indicator, the best-in-class performance. Benchmarking is a process to carefully assess current performance and capabilities and to compare them to world-class performance. Benchmarking can help discern the strengths and weaknesses of critical processes, set priorities, establish performance targets, and plan actions. It is a critical element in defining opportunities and developing the case for change.

Benchmarking starts with self-study and assessment. What is critical to the operation? What has our past performance been? What should we benchmark? The purpose of benchmarking is to discover how to become the best for the processes critical to competitive success. Simply knowing the benchmark is useful, but understanding how that performance is achieved is far more valuable.

Successful benchmarking requires the following:

• Deciding what to benchmark - determine the processes critical to competitive success, what must be learned, and who should be actively involved in the benchmarking project.
• Planning the benchmarking project - identify performance indicators to benchmark against, develop study questions, and identify organizations to study.
• Understanding your own performance - gather performance data, problems, and opportunities.
• Studying others - identify benchmark candidates (look at competitors but don't limit yourself to the obvious, seek related processes that could provide valuable insights), decide how best to get your study questions answered, visit candidates.
• Learning from the data - analyze the data including the financial impact of the performance gap, summarize the findings.
• Using the findings - apply to setting and deploying goals for the organization.

Benchmarking is a powerful method during the journey to Operational Excellence. It provides direction and motivation essential to create the drive for change.

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