Can Benchmarking Help My Business?
Everyone is always trying to keep score. In business we generally use sales and profits as the most basic indicator of how a business is doing. If these indicators are up, we are happy, negative the opposite. But how do we get even better if we are up or how do we attack the problem if the company is down? Benchmarking is a good answer. You can benchmark your business internally, versus other businesses in your industry as well as versus other business outside your industry. The benchmark information will give you the clues you need.
Benchmarking is best practices
The biggest complaint I hear about benchmarking is we are different. My answer is; nobody is that different. Remember benchmarking is really about getting to best practices. You compete in the same markets for the same customers. Simply the lowest cost provider will be the long term winner, so you need to understand why the competition is beating you or you are beating them. Keep in mind the worm can turn.
How can I benchmark internally?
Using benchmarking internally can take a little more creativity, but can be done. On the sales side start by comparing regions to see what is going on. There will be items that sell better in different areas. Understand completely why that is happening. You will get sales people that will tell you, “We just can’t sell that in…,” but there is usually more to the story than that. Make sure you understand the strategies being used by the successful region or division. Have the successful region put together a strategy sheet on what works for them. You will find that most every region will have their successes that can be shared.
The same thing can be done from production facility to production facility. You have probably already compared the facilities that are making the same product, but dedicated facilities should be compared as well. Scrape handling, energy usage, and product handling are only a few of the potential comparisons.
The office areas should also be on the comparison list. Overhead items are a great place to start.
Benchmarking the competition
Benchmarking the competition will give great insight into where you can become more efficient or effective. The data needed will generally be in industry publications and competition prepared documents like product sell sheets, advertisements, and annual reports. Work with your sales people, they hear all the good stuff about changes at competitors’ facilities as well as changes in products and processes. These sources will be where you find the hard numbers and information.
What about benchmarking other industries?
Remember benchmarking is about best practices. One industry never has a corner on best practices. Even if the other company’s processes are completely different than your company there may be areas they can have ideas for you. Since they are world class in their industry there is a good chance they may be able to help you in areas like customer service, sales, or marketing. Benchmarking is not just about the manufacturing process.
All businesses benefit from benchmarking
Business big or small can benefit from benchmarking best practices. The big guys might become more sophisticated doing surveys and primary research. But the little guy can go a long way using secondary sources and just keeping his eyes open.