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TAKING THE BEST
FROM THE BEST
BENCHMARKING
I
f the performance of a
company is adequate but
unspectacular, it may seek to
identify areas that would help it
rise above the competition. The
process of benchmarking allows a
business to improve efficiency by
comparing its performance against
other organizations. The goal is to
identify, and then learn from, best
practice in the industry. Best
practice might come, for example,
from a competitor who achieves the
lowest unit costs, the best customer
satisfaction ratings, or the shortest
lead times. The rival’s approach is
then carefully evaluated, including
such factors as the equipment,
training, and production methods
used. Once understood, best
practice can be adopted in the
hope that it will raise the
performance of the company to
the level of the industry leader.Cost effective
Some companies try to become more
efficient via simple trial and error,
but this can be slow and costly. One
of the advantages of benchmarking
is that it is a relatively cheap way
to improve performance, because
there is no need to replicate the
expensive mistakes made by otherTo become an
industry leader......a company must identify
its most-successful
competitor......and adopt the best
practices of its rival.Take the
best from
the best.IN CONTEXT
FOCUS
Competitive advantageKEY DATES
240 BCE The Romans capture
a Carthaginian ship during a
storm. They build new boats
based on this design and
defeat the Carthaginians
at the Battle of Aegus.1819 Scottish industrialist
James Finlayson sets up a
textile factory in Tampere,
Finland. His production
methods are modeled on
those used by Lancashire’s
world-class cotton mills.1972 Ajax, the Dutch soccer
team, wins the European Cup
playing “total soccer,” which
allows outfield players to take
any position on the field.
Spanish team FC Barcelona
subsequently adopts the same
strategy and goes on to
achieve great success.