Benchmarking

Benchmarking

Benchmarking started out in the corporate sector. It was originally started when Xerox

Corporation realized it was losing a lot of money and market share to its Japanese competitors.

Its competitors were able to sell photocopiers for the same price that it cost Xerox to make

them. Benchmarking was started by Xerox’s Manufacturing unit when it analyzed its photo-

copier manufacturing compared to Fuji-Xerox, an affiliate Xerox’s Logistics and distribution

unit benchmarked with L.L. Bean in the way it handled its materials handling and warehouse

operations. This was a very famous study that became part of the first book on Benchmarking

by Robert C. Camp (http://www.sla.org/division/dmil/mlw97/gohlke/sld006.html).

Benchmarking is the process of measuring your operations against similar operations

for the purpose of improving your business processes. The purpose of benchmarking is to

improve products and processes to better meet customer needs The linkage of the business

process to customer needs is critical to effective benchmarking (McNamee, D., 1994).

Benchmarking is usually done within the same industry. However, benchmarking is

often done between organization that have a similar process, but they are in different industries.

By benchmarking the process across industries, the organization sometimes achieves greater results than by sticking to their own industry. Benchmarking is a process across industries which cause people to challenge some of the assumptions that are part of the problem (McNamee, D., 1994).

Benchmarking as a tactical planning tool originated with Xerox Business Systems in the

late 1970’s. One of the first experiments in benchmarking was in the production logistics area (warehousing, picking, packing, and shipping). Xerox Business Services benchmarked with L.L. Bean, a clothing manufacturer who had one of the best logistics operations in the world (McNamee, D., 1994).

The process of benchmarking must fit into a change management framework. The

Management of change includes project management skills as well as understanding the