Select a subject to benchmarkĮxecutives and other senior management should be involved in deciding which processes are critical to the company’s success. As a result, Southwest Airlines changed and streamlined processes for gate maintenance, plane cleaning, and passenger boarding. They realized that it all depends on each pit crew member’s ability to perform clearly defined tasks within specific time intervals-12 to 16 seconds if all four tires need to be changed and the car needs to be fueled. Use this type of benchmarking when you need to look beyond your own industry to identify world-class performance and best practices so you can look for ways to adapt their methods to your procedures and processes.įor example, seeing a need to improve performance, Southwest Airlines turned to NASCAR to analyze how pit crews are able to service race cars so quickly.
#BENCHMARK ANALYTICS HOW TO#
If your competitor is getting better customer reviews, you need to analyze what the difference is and figure out how to improve the quality of your product. This type gives you insight into your position within your industry and what you may need to do to increase productivity.įor example, you can compare the customer satisfaction of a competitor’s product to yours. This type of benchmarking is a comparison of products, services, processes, and methods of your direct competitors. The site with superior performance simply needs to share their processes and procedures so that the entire company benefits from increased performance. If other teams or organizations within your company have established best practices in processes similar to yours, internal benchmarking involves analyzing what they are doing so you can find areas where you can improve and be more efficient.įor example, you could compare the performance of one warehousing and shipping site against another warehousing and shipping site.
There are many different types of benchmarking that fall into three primary categories: internal, competitive, and strategic.
Give you a better idea of how the competition operates, which will help you to identify best practices to increase performance.Gauge the effectiveness of past performance.Benchmarking is one of many tools you can use as part of any continuous improvement model used within your organization. The goal of your business should be to grow, improve processes, increase quality, decrease costs, and earn more money. The performance metrics you get from these targets can be compared against others to help you determine best practices for improving your operations. Using the information you gather from your analyses and comparisons to implement changes that will improve your company’s performance, products, and services.Ĭommon areas that you may want to target for benchmarking analysis include cost per unit, time to produce each unit, quality of each unit, and customer satisfaction.Comparing the competition’s processes and strategies against your own.Determining how and where other companies are achieving higher performance levels than your company has been able to achieve.The objective of benchmarking is to use the data gathered in your benchmarking process to identify areas where improvements can be made by: If another organization can produce the same type of product in less than 30 minutes, you can use their time as a benchmark for measuring your own processes and procedures. Is the 30-minute measurement good or bad? The only way for you to know is to compare against other data, such as the time it takes another organization to produce a similar product. A benchmark.įor example, suppose it takes 30 minutes to produce your product. These measurements don’t have much value on their own-that data needs to be compared against some sort of standard. In business, benchmarking is a process used to measure the quality and performance of your company’s products, services, and processes. Through the benchmarking process, any business can compare itself against a standard and develop a consistent way of measuring performance. But how does a company determine whether it is successful? Businesses are always striving for high performance, from creating more efficient processes to selling more of their products and services.
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