TyPes OF BENCHMARKING
The benchmarking can be classified into two categories:
- Based on the object to be benchmarked, and
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Based on the organisations against whom one is benchmarking.
Classification Based on the Object to be Benchmarked
1. Product Benchmarking
✓ This refers to comparison of different features and attributes of competing products and services.
✓ It is done through either engineering analysis or through analyses of perception of customers.
✓It is also called as ‘customer satisfaction benchmarking’ or ‘customer value profiling’.
✓ It can help in identifying activities where improvement is possible.
2. Performance Benchmarking
✓ This refers to comparison of performance indicators related to a business as a whole or to the group of critical activities or processes.
✓ It measures all the different kinds of system performance variables such as efficiency, effectiveness, productivity, quality, flexibility, profitability, etc.
✓ It is a very important, tool to identify different functional areas where scope for improvement is high.
✓ It also provides external feedback to the concerned persons involved in the process or in any of the constituent activities.
3. Process Benchmarking
✓ This refers to comparison of processes.
✓ It identifies a more effective and efficient process to be implemented.
4. Strategic Benchmarking
✓ This refers to examining competitive position in the market place.
✓ It helps the company to study the business strategy of another successful business and use the strategy for becoming more competitive.
5. Generic Benchmarking
✓ This refers to comparison of general best practices which are common across industry sectors markets.
✓ In this, comparison is not restricted to any one market or industry.
Classification Based on the Organisations against Whom One is Benchmarking
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Internal Benchmarking: It refers to comparison of performance between departments, plants, subsidiaries, etc., within the same organisation.
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External Benchmarking: It refers to comparison of performance with external organisations producing same class of products and services.
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Industry Benchmarking: It refers to comparisons with a group larger than the direct competitor (i.e., other organisational players such as suppliers, distributors, customers, etc.).
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Competitive Benchmarking: It refers to comparison of performance against direct competitors in order to catch up or surpass competitor performance.
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Best-in-class Benchmarking: It refers to comparison of performance with best practices prevalent in an organisation irrespective of products and services.
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Relationship Benchmarking: It refers to comparison of performance with the benchmarking company which already has a relationship like customer-supplier relations, joint venture arrangement, etc.
