The benefits of benchmarking for your business are really a lot. If you look internally at your own current practices, you will never develop the best strategies to totally satisfy your customers requirements. One of the greatest values of benchmarking is learning the practices that are used by your competitors and other companies to achieve their results.
The benefits of benchmarking for the management are not only following your competitors. Benchmarking provides also insights into new ways of doing business, and challenges the usual ways of operating business. It depends upon and builds effective team-work through mutually established goals and the team’s agreement to achieve them. Benchmarking provides an increased awareness of your cost and performance in products and services compared with those of your competitors. It is great, logical and proven method for developing survival strategies and achieving superior performance that will help your business survive and prosper.
Benchmarking should be a standard process used to evaluate your business success in meeting your customer requirements. The performance standard should be that each work function achieves and maintains superiority or, at the very least, parity in meeting the requirements of your customers in terms of quality, schedule, and cost of performance. If each of your employees’ efforts is not at the performance level of “best practice,” your business will be less effective than your competitors. Customers satisfaction can only be achieved by meeting your customer’s needs and demands – that is, product features, level of service, quality, availability, reliability, price, value, reputation, and their prior experience with your business. These requirements constantly change and are influenced by the changes your competitors are making. If you think you are the best, but really do not know how your competition is performing, you are on your way to competitive suicide.
To meet the competitive challenges and respond to customers requirements, each of your business units should establish competitive benchmarks for their major functions, including gathering the necessary data. You should establish a process to update the competitive data and project your competitors’ future performance. Taking the necessary actions to achieve and maintain competitive superiority is your final step which you should make.
Benchmarking can help reduce the cost of quality by identifying the best practices in any area of activity. It helps you to determine what the real needs are. It can also be used effectively in problem solving and quality improvement projects.
The key ways benchmarking helps to improve your business are to:
- Identify your performance against competitive accomplishments in the context of changing customer requirements.
- Identify the right measurements against which you should judge your performance.
- Find ways to use the “best practices” to improve your performance, including the reduction of rework and prevention of errors.
As you involve more of your team members in solving problems in your business, benchmarking becomes a powerful tool for identifying problems, finding potential solutions, and identifying opportunities.