Benchmarking defined:
Benchmarking is a tool. The idea of benchmarking is collect data and information from your competitors in order to compare your performance and model your performance on its best practice.
Companies carry out benchmarking exercises from time to time. For this to happen, they benchmark themselves against other companies usually within the sector.
Internal Benchmarking is performed within usually larger organizations by comparing the best practices and performance of similar business units or business processes located at the same or different locations. This approach is most accessible as the comparison is conducted between similar operations in other parts of the company. Camp (1989), Zairi (1992) and Watson (1993) have defined it as “performance comparison of units or departments within one organization”.
Competitive benchmarking is the continuous process of comparing a firm's practices and performance measures with that of its most successful competitor(s). It involves the comparison of a competitor’s products and process with its own. Benchmarking partners are drawn from the same sector. However to protect confidentiality it is common for the companies to undertake this type of benchmarking through trade associations or organizations such as the Chamber of Commerce.
Functional benchmarking looks at similar practices and processes in organizations or companies in other industries. This type of benchmarking is an opportunity for breakthrough improvements by analyzing high-performance processes across a variety of industries and organizations. It is defined by Zairi as a comparison of specific function with best in industry and best in class (1992).
Generic benchmarking investigates activities that are or can be used in most types of businesses. This type of benchmarking makes the broadest use of data collection. One of the major difficulties is trying to understand how these processes can be translated across industries. Yet generic benchmarking can often result in an organization's drastically changing its ideas about its performance capability and in the reengineering of business processes.
There are eight steps that are typically employed in the benchmarking process:
Identify processes, activities, or factors to benchmark and their primary characteristics.
Determine what form of benchmarking is to be used: generic, functional, competitive, or internal.
Determine who or what the benchmark target is: company, organization, industry, or process.- Determine specific benchmark values by collecting and analyzing information from various sources of information.
Determine the best practice for each benchmarked item.
Evaluate the process to which benchmarks apply and establish objectives and improvement goals.
Implement plans and monitor results.
Recalibrate internal base benchmarks.
Reverse Engineering is a legal method of copying a technology which (as opposed to starting from the beginning) begins with an existing product and works backward to figure out how it does what it does. When the product's basic principle or core concept is determined, the next step is to reproduce the same results by employing different mechanisms to avoid any patent infringement.
COMPREHENSION
1. Engineers at the factory made replacement components for their products by copying the shape and specifications of the original parts, a process which is known as ______________ ________________ .
2. Internal _______________looks for internal ___________ ____________ and tries to establish them across the organisation.
3. We use ______________ _____________ to monitor and evaluate the effectiveness of our competitors website against ours.
4. Look further afield. __________ _____________ can teach you more than you think, and as the companies you are asking to give you advice are not your competitors, they may be willing to help.
