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Benchmarking literature review

Definition

Informal benchmarking is not a new concept. For many years, functional experts of various organizations
used to meet and discuss specific issues. Such discussions would lead to comparison of issues and
sometimes the solutions also. However, this tended to be a limited exchange of information and little
analysis or learning took pace. The scope of formal benchmarking is not just information gathering
exercise but involves analysis and action. Business benchmarking is concerned with the level and not the
trend. Level is a measure of excellence while trend is a measure of movement

Benchmarking is recognized as an essential tool for continuous improvement of quality. A large


number of publications by various authors reflect the interest in this technique. Reviews of literature
on benchmarking have been done in the past by a few authors. However, considering the
contributions in the recent times, a more comprehensive review is attempted here. In this paper, the
authors have reviewed benchmarking literature in a way that would help researchers, academicians
and practitioners to take a closer look at the growth, development and applicability of this technique.
The authors have examined various papers and have proposed a different scheme of classification.
In addition, certain gaps that would provide hints for further research in benchmarking have been
identified.

Quite often, the benchmarking concept is understood to be an act of imitating or copying. But in reality
this proves to be a concept that helps in innovation rather than imitation, as stated by Thompson and
Cox (1997). Many authors have contributed to the literature on benchmarking resulting in more than
350 publications as of June 2002. Considering the growth of publications, some attempts have been
made in the past to review the literature.

It is essential that the present attempt is different from the earlier reviews and more broad based in
coverage. This paper, besides providing a review of literature on benchmarking, covers the following
objectives:

(1) Arranging the publications in an orderly manner to enable easy and quick search;

(2) Classification of literature;

(3) Scrutiny of outcome of publications; and

(4) Identifying gaps and providing hints for further research.

However, it is not the intention here to provide any overview or summary of benchmarking technique.
Readers are suggested to look into the cited literature, for example Camp (1989a, b, c, d, e, 1990, 1992,
1993), Fuld (1989),etc., for learning about the basics of benchmarking.

This paper first provides a comparison among the earlier reviews on benchmarking and highlights the
outcome in each case. Next, a new methodology for classifying the literature is suggested. The growth
and categorization of publications are presented in a graphical form for easy understanding. The papers
have been closely examined and scope for further work has been identified.
Earlier reviews of literature on benchmarking

It was found out during the current research that at least six literature reviews have been made in the
past and all but one were studied by the authors. The different reviews in chronological order are:

(1) “Roadmap to current benchmarking literature”, Andrew E. Jackson ,Robert R. Safford and William W.
Swart, 1994, Journal of Management in Engineering, November/December, pp. 60-7.

(2) “A review of key publications on benchmarking: part I”, Mohamed Zairi and Mohamed A. Youssef,
1995, Benchmarking for Quality Management and Technology, Vol. 2 No. 1, pp. 65-72. “A review of key
publications on benchmarking: part II”, Mohamed Zairi and Mohamed A. Youssef, 1996, Benchmarking
for Quality Management and Technology Vol. 3 No. 1,pp. 45-9.

(3) “Benchmarking: a select bibliography”, S.N. Vig, 1995, Productivity,Vol. 36 No. 3, October/December.

(4) “A review of benchmarking literature”, Czuchry, A.J., Yasin, M.M. and Darsch, J.J., 1995, International
Journal of Product Technology, Vol. 10 No. 1/2, pp. 27-45.

(5) “A framework for benchmarking in the public sector literature review and directions for future
research”, Jeffrey J. Dorsch and Mahmoud M. Yasin, 1998, International Journal of Public Sector
Management, Vol. 11 No. 2/3, pp. 91-115.

(6) “Theory and practice of benchmarking: then and now”, Mahmoud M. Yasin, 2002, Benchmarking: An
International Journal, Vol. 9 No. 3, pp. 217-43.

There are four primary types of benchmarking: internal, competitive, functional,


and generic.

1. Internal benchmarking is a comparison of a business process to a similar process inside


the organization.
2. Competitive benchmarking is a direct competitor-to-competitor comparison of a product,
service, process, or method.
3. Functional benchmarking is a comparison to similar or identical practices within the same
or similar functions outside the immediate industry.
4. Generic benchmarking broadly conceptualizes unrelated business processes or functions
that can be practiced in the same or similar ways regardless of the industry.

A more detailed explanation of these four types of benchmarking follows, along with: a brief
description of each type; possible outcomes; examples from DON, DOD, federal
government, and private industry; and some of the pros and cons for each type.

Internal benchmarking
Internal benchmarking is a comparison of a business process to a similar process inside the
organization to acquire the best internal. business practices. At the federal level, two
Department of Transportation sites might prepare their budget submissions for
Congressional approval. In the private sector, a retail food store chain selects its most
profitable store as a benchmark for the others.
Competitive benchmarking
Competitive benchmarking is a direct competitor-to-competitor comparison of a product, service,
process, or method. This form of benchmarking provides an opportunity to know yourself and your
competition better; combine forces against another common competitor. An example of competitive
benchmarking within the Department of Defense, might include contrasting Army and Air Force
supply systems for Joint initiatives. Within the private sector, two or more American car companies
might benchmark for mutual benefit against common international competitor; or, rival chemical
companies benchmark for environmental compliance.

Functional benchmarking
Functional benchmarking is a comparison to similar or identical practices (e.g., the picking process
for assembling customer orders, maintaining inventory controls of spare computer parts, logistics to
move operational forces, etc.) within the same or similar functions outside the immediate industry.
Functional benchmarking might identify practices that are superior in your functional areas in
whatever industry they may exist. Functional benchmarking would be accomplished at the federal
level by comparing the IRS collections process against those of American Express. Comparing
copper mining techniques to coal mining techniques is an example in the private sector.
Generic benchmarking
Generic benchmarking broadly conceptualizes unrelated business processes or functions that can
be practiced in the same or similar ways regardless of the industry (e.g., transferring funds, bar
coding, order fulfillment, admissions, replenishing inventory, warehousing, etc.). Generic means
without a brand. It is a pure form of benchmarking,. (Camp, 1989). The focus is on being innovative
and gaining insight into excellent work processes rather than on the business practices of a
particular organization or industry. The outcome is usually a broad conceptualization, yet careful
understanding, of a generic work process that works extremely well. Generic benchmarking is
occurring when a Veterans Administration hospital's check-in process is contrasted against a car
rental agency's check-in process. Adapting grocery store bar coding to control and sort airport
luggage might be another example.

Source: USN Benchmarking Handbook

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