Page 144 - The Handbook for Quality Management a Complete Guide to Operational Excellence

enchmarking is a popular method for developing requirements
and set ting goals. In more conventional terms, benchmarking can
Bbe defined as measuring your performance against that of best-in-
class companies, determining how the best-in-class achieve those perfor-
mance levels, and using the information as the basis for your own
company’s targets, strategies, and implementa tion. Benchmarking involves
research into the best practices at the industry, firm, or process level.
Benchmarking goes beyond a determination of the “industry standard”;
it breaks the firm’s activities down to process operations and looks for
the best-in-class for a particular operation. For example, Xerox corpora-
tion studied the retailer LL Bean to help them improve their parts distri-
bution process.
The benefits of competitive benchmarking include:

• Creating a culture that values continuous improvement to achieve
excellence
• Enhancing creativity by devaluing the not-invented-here syndrome
• Increasing sensitivity to changes in the external environment
• Shifting the corporate mind-set from relative complacency to a
strong sense of urgency for ongoing improvement
• Focusing resources through performance targets set with employee
input
• Prioritizing the areas that need improvement
• Sharing the best practices between benchmarking partners
Benchmarking is based on learning from others, rather than develop-
ing new and improved approaches. Since the process being studied is
there for all to see, a firm will find that benchmarking cannot give them a
sustained competitive advantage. Although helpful, benchmarking should
never be the pri mary strategy for improvement.
Competitive analysis is an approach to goal setting used by many
firms. This approach is essentially benchmarking confined to one’s own
industry. Although common, competitive analysis virtually guarantees

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