The Practice Of Benchmarking And Its Advantages And Disadvantages
Over the years, there has been a tremendous development in benchmarking techniques, in terms of both benchmarking practices and method, which are widely used in different organization to achieve different goals in the developing countries.
In this assignment I will discuss the definition of benchmarking and then the use of benchmarking. After that I will discuss the advantage and the disadvantage of benchmarking according the researches and the case studies of benchmarking. Then, I will discuss and analyze the practice of benchmarking to explain why managers find that benchmarking did not live up to their ...view middle of the document...
Various definitions have been put forward describing the practice of benchmarking; they are primarily concerned with the concept of performance improvement centered on measuring current practices against exogenous entities and their subsequent implementation. (Anon, 2007)
2.2 Type of Benchmarking
Elmuti and Kathawala (1997) had identified four types of benchmarking which are internal benchmarking, competitive benchmarking, functional benchmarking, and generic or process benchmarking. It was obvious that many types of benchmarking had emerged and according to Slack et al (2001), benchmarking can be classified into a various types, firstly, at the company level, which considers the existing process in the firm… Secondly, the competitors or non competitor firms which is the market level (Keegan, 1998)… thirdly, the particular processes or strategies in the firm (Bogan and English, 1994). For example, at the company level, Microsoft Corporate launched Windows XP, by benchmarking it with their NT series. Or direct benchmarking with competitor, like Microsoft Corporation, benchmarked the Apple Macintosh and, then, launched Windows operating systems.
Kumar and Chandra (2001) suggested that when choosing the benchmarking procedure or the type of benchmarking we should be very caution in order to acquire desired results. Also, Bhutta and Huq (1999) argued that it is not useful to compare strategy at internal level but it will provide many ways of improvement when comparisons made between the competitors. Ahmed and Rafiq (1998) recommended that organization should use multiple benchmarking because it is not necessary to utilize only one tool but to integrate a range of techniques, since it could help to address different sets or sub-areas for improvement.
The Use Of Benchmarking
According to the research of benchmarking activity, benchmarking is implemented usually in industries such as service, utilities, health, and education. (Hinton et al, 2000). Moreover, benchmarking activity tend to the size of the organization, a larger organization is more likely to be benchmarking rather than a smaller one (Hinton et al, 2000).
Traditionally, the organization usually enhances their products or process performance by focusing on the internal activities (Kolarik, 1995). For example the organization may use different techniques in the quality function to achieve their customer satisfaction. However, Juran (1993) argue that this conventional performance improvement seems not to be sufficient for a competition in the highly competitive markets. Therefore, benchmarking become a significant technique facilitating an improvement of organization performance as it regards competitor issues (Juran, 1993).
In order to benchmark effectively, a company needs a strong strategic focus and some flexibility in achieving management's goals. To effectively implementing benchmarking, adequate planning, training, and open interdepartmental communication needed....