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What is Benchmarking?


Benchmarking on ASQTV

Quality Glossary Definition: Benchmarking

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.

Benchmarking can also help organizations identify areas, systems, or processes for improvements—either incremental (continuous) improvements or dramatic (business process re-engineering) improvements.

Incremental Quality Improvement vs Benchmarking Breakthroughs
Incremental Quality Improvement vs Benchmarking Breakthroughs

Benchmarking has been classified into two distinct categories: technical and competitive. The House of Quality tutorial and Gantt charts are often used to plot the benchmarking evaluation.

Technical Benchmarking

Technical benchmarking is performed by design staff to determine the capabilities of products or services, especially in comparison to the products or services of leading competitors. For example, on a scale of one to four, four being best, how do designers rank the properties of your organization’s products or services? If you cannot obtain hard data, the design efforts may be insufficient, and products or services may be inadequate to be competitive.

Competitive Benchmarking

Competitive benchmarking compares how well (or poorly) an organization is doing with respect to the leading competition, especially with respect to critically important attributes, functions, or values associated with the organization’s products or services. For example, on a scale of one to four, four being best, how do customers rank your organization’s products or services compared to those of the leading competition? If you cannot obtain hard data, marketing efforts may be misdirected and design efforts misguided. 

Benchmarking Procedure

Considerations

  • Before an organization can achieve the full benefits of benchmarking, its own processes must be clearly understood and under control.
  • Benchmarking studies require significant investments of manpower and time, so management must champion the process all the way through, including being ready and willing to make changes based on what is learned.
  • Too broad a scope dooms the project to failure. A subject that is not critical to the organization’s success won’t return enough benefits to make the study worthwhile.
  • Inadequate resources can also doom a benchmarking study by underestimating the effort involved or inadequate planning. The better you prepare, the more efficient your study will be.

Plan

  1. Define a tightly focused subject of the benchmarking study. Choose an issue critical to the organization’s success.
  2. Form a cross-functional team. During Step 1 and 2, management’s goals and support for the study must be firmly established.
  3. Study your own process. Know how the work is done and measurements of the output.
  4. Identify partner organizations that may have best practices.

  5. Collect

  6. Collect information directly from partner organizations. Collect both process descriptions and numeric data, using questionnaires, telephone interviews, and/or site visits.

  7. Analyze

  8. Compare the collected data, both numeric and descriptive.
  9. Determine gaps between your performance measurements and those of your partners.
  10. Determine the differences in practices that cause the gaps.

  11. Adapt

  12. Develop goals for your organization’s process.
  13. Develop action plans to achieve those goals.
  14. Implement and monitor plans.

Benchmarking Example

Carleton University’s department of housing began a project to improve the process by which students apply for and are assigned housing. This project had three main goals:

  1. Reduce residence vacancy rates to below 1%
  2. Improve student satisfaction levels
  3. Make the best possible use of employee time and effort

The department chose benchmarking as the basis for the improvement project after realizing that other universities already had better processes Carleton could learn from and quickly implement without needing to re-engineer the process from scratch.

The cross-functional team started by mapping the existing residence application process to establish a baseline, focusing attention on the process used by new first-year students (left side, Figure 1).

Main Process Steps Before and After Benchmarking
Figure 1: Main Process Steps Before and After Benchmarking

The project team then conducted focus groups with students living in residence, asking them to describe their expectations of the assignment service process, their perceptions of the services they actually received, and any gaps between the two.

The team also reviewed websites of housing offices at 24 international universities, followed by a telephone survey of 12 of these to find out more about their systems. The team then conducted site visits to four universities seen as leaders in dealing with residence applications to learn about their current processes and discuss the relative advantages and disadvantages of each one.

The team presented its benchmarking report to management, describing the best practices seen at other universities and making specific recommendations for adapting them for Carleton (right side, Figure 1). Carleton implemented many of the recommended changes and is seeing the benefits (Figure 2).

Benchmarking Average Vacancy Rates for Residences
Figure 2: Benchmarking Average Vacancy Rates for Residences

Excerpted from "Benchmarking Goes to School," Quality Progress.

Benchmarking Studies

Benchmarking the Global State of Quality

ASQ is partnering with APQC to collect and study data on the global state of quality. The goal is to provide an initial view and regular updates to help organizations compare quality and continuous improvement advancements to each other, their regions, and their economic sectors. Learn more about the Global State of Quality.

State of global quality 

Benchmarking Reports Available for ASQ Members

Through an agreement with APQC, ASQ offers access to a collection of benchmarking reports and metrics documents to members. Log in with your ASQ member ID and password to access benchmarking data from organizations in a variety of industries. Each benchmarking study also includes case studies on individual organizations. 

KM Transfer Benchmarking Study CoverTransferring and Applying Critical Knowledge (PDF) Read about 19 best practices for identifying, transferring, and applying knowledge. This benchmarking report includes case studies from organizations including Accenture, Kraft Foods Group Inc., Lockheed Martin, Wipro Ltd., and more.




Project Management Offices coverEffective Project Management Offices (PDF) This research report uncovers trends among best-practice project management offices. Learn about thirteen best practices in four main areas: strategy, practices, technology and automation, and measures and reporting.




Enterprise Quality Report Cover Using Enterprise Quality Measurement to Drive Business Value (PDF) Learn about foundational practices for evaluating quality, as well as emerging practices in use at leading organizations to stay on top of quality efforts. Along with comprehensive analysis of study findings, you’ll find case studies of Altera Corporation and Chemonics International.





Benchmarking Resources

Articles

Quality Strategy Improves Business School Placements (PDF) Using competitive benchmarking and quality tools, Ramaiah Institute of Management Studies improved job placement results for its students, decreasing the number of interviews required to secure a position and increasing the mean salary offer, while also adding a new source of revenue for the organization.

Great Ormond Street Hospital for Children: Ferrari’s Formula One Handovers and Handovers From Surgery to Intensive Care (PDF) Great Ormond Street Hospital for Children (GOSH) benchmarked its handoff from cardiac surgery to the intensive care unit against pit stop techniques of the Ferrari Formula One race car team. Process improvements resulted in increased patient safety and decreased error rates. Excerpted from chapter 10 of Benchmarking for Hospitals: Achieving Best-in-Class Performance Without Having to Reinvent the Wheel, by Victor E.Sower, Jo Ann Duffy, and Gerald Kohers.

Best Practices in Process Improvement (PDF) The internet is revolutionizing process improvement projects by facilitating benchmarking, speeding up data collection and putting people in contact with colleagues.

Benchmarking: A Tool for Sharing and Cooperation (PDF) Find out how NASA and the Kennedy Space Center used benchmarking to progress from incremental to breakthrough improvement.

Benchmarking and Best Practices (PDF) Implementing benchmarking and best practices, from definitions and appropriate uses to tools and methodologies, is discussed.

Multipronged Approach: A business excellence framework on multiple quality methods (Quality Progress) In today’s rapidly changing IT service organizations, one of the main challenges is improving business performance while enhancing value to the customer. Using multiple quality methods, one global organization developed a sustainable business excellence culture to meet these objectives.

The Role of Quality Benchmarking Deployment to World-Class Manufacturing (PDF) The main goal of the article is to study the role of quality benchmarking deployment for achieving world-class manufacturing status.

Case studies

Quality Strategy Improves Business School Placements (PDF) A cross-functional team at Ramaiah Institute of Management Studies used quality tools to improve placement numbers, attract recruiters, enhance salaries, and earn revenue. This project was entered in the 2012 International Team Excellence Award competition and earned finalist honors.

Six Hospitals Combat Regional Emergency Department Congestion with Lean (PDF) Representatives from six urban hospitals in the Canadian province of British Columbia that partner to serve mental health and addiction patients worked together to curb emergency department congestion by deploying a single care model across all sites.

Business School Improves Learning, Research, and Placement Measures with TQM (PDF) A cross-functional team at Ramaiah Institute of Management Studies used TQM principles to improve measures of learning, faculty research, and graduate placement. This team-based project was a finalist in ASQ’s 2010 Education Team Excellence Award process and earned the "Award of Distinction."

Books


Adapted from Quality Essentials: A Reference Guide from A to Z, ASQ Quality Press and The Quality Toolbox, Second Edition, ASQ Quality Press.

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