The Pros and Cons of Benchmarking

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According to Keith Sisson, the practice of Benchmarking or “continuous improvement” was first introduced in the 1950’s by Toyota. Benchmarking is the process used by organizations to improve specific processes within the organization. Benchmarking focuses on obtaining the “best practice” for the company and not measuring based on the maximum performance. Benchmarking is done by obtaining information from one organization and improving that information to be used in another organization within the same market. The two primary types of benchmarking are Internal and External. Internal benchmarking compares practices and performance between teams, individuals or groups within the organization. External benchmarking compares the organizational performance across industries. Benchmarking helps companies understand their type of industry better since they are able to compare the techniques used by competitor companies and enhance them to make it work more efficient for the company. “Benchmarking is a management technique aimed at detecting “best practice” in other organizations and then adopting it in one’s own.” Benchmarking. (2011).
Internal Benchmarking is the process of looking within your own firm for potential process improvement, internal does not compare one company to another. Internal Benchmarking reduces the time and money a company spends investigating the other companies. Internal Benchmarking allows for an easier transition for employees because they are able to adapt and adopt better practices as they are improvement of the current processes being used. Internal best practices can be recognized in large organization and midsize companies that have several divisions, business units and warehouse. When companies look with...

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