Benchmarking Case Study

Benchmarking can be defined as a process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results. The main emphasis of benchmarking is on improving a given business operation or a process by exploiting 'best practices,' not on 'best performance.'

As in the case of Ames, benchmarking means comparing one's organization or a part of it with that of the other companies. With benchmarking dimensions typically measured are quality, time and cost. Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per

These initiatives played a major role in pulling Xerox out of trouble in the years to come. The company even went on to become one of the best examples of the successful implementation of benchmarking. As for Xerox the 'Leadership through Quality' program revitalized the company. The program encouraged Xerox to find ways to reduce their manufacturing costs. Benchmarking against Japanese competitors, Xerox found out that it took twice as long as it’s Japanese competitors to bring a product to market, five times the number of engineers, four times the number of design changes, and three times the design

For example, benchmarking helped Australian Financial Institutes to reduce operation costs by outsourcing some operation and alternating distribution channels (Delpachitra et al, 2002). From the ideas the teams had, Ames saved over 1.2 million dollars. Ames has reduced its number of suppliers from forty-two to nineteen. These nineteen have a quality rating of near ninety-nine percent. The ultimate benefit was the reduction in cost of quality, initially measured at more than 25%.

One of the advantages of benchmarking may be lower labor costs. As a small manufacturing company may study how a top competitor uses robots for several basic plant functions. These robots may help the competitor save a significant amount of money on labor costs. Company managers may obtain information on these robotics systems through the competitor's website or online articles. They may also identify the company that sold the competitor the robots. Subsequently, the company using benchmarking may call the robot manufacturer to help set up its own