An overview of benchmarking process: a tool for continuous improvement and competitive advantage

Introduction The essence of benchmarking is the process of identifying the highest standards of excellence for products, services, or processes, and then making the improvements necessary to reach those standards, commonly called " best practices ". The justification lies partly in the question: " Why re-invent the wheel if I can learn from someone who has already done it? " Jackson Grayson Jr, chairman of the Houston-based American Productivity and Quality Center, which offers training in benchmarking and consulting services, reports an incredible amount of interest in benchmarking (Ross, 1995, p. 235). Benchmarking was begun in the late 1970s by Xerox Corporation. During this time, Xerox was losing market share and feeling a lot of pressure from its competitors. In an attempt to try and " get back into the game " , Xerox decided to compare its operations to those of its competitors. After finding quality standards with which to compare itself, Xerox began one of the greatest trends in the business world today (McNair and Leibfried, 1992). Benchmarking has been gaining popularity, especially in the last five years. The process of benchmarking is more than just a means of gathering data on how well a company performs against others. Benchmarking can be used in a variety of industries, both services and manufacturing. It is also a method of identifying new ideas and new ways of improving processes and, therefore, being better able to meet the expectations of customers. The ultimate objective of benchmarking is process improvement that meets the attributes of customer expectations (Omachonu and Ross, 1994, pp. 140-1). Robert C. Camp headed up the now-famous study at Xerox in which the buzzword " benchmarking " was coined in late 1980. When asked whether the best work practices necessarily improve the bottom line, he replied: " the full definition of benchmarking is finding and implementing best practices in our business, practices that meet customer requirements. So the flywheel on finding the very best, is 'Does this meet customer requirements?' There is a cost of quality that exceeds customer requirements. The basic objective is satisfying the customer, so that is the limiter " (Linsenmeyer, 1991, p. 34).