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A little bit of knowledge with INTL Network Logistics.. Today let's talk about BENCHMARKING
January 10, 2021
What is the meaning of benchmarking and its types? What are the benefits of functional benchmarking?
Benchmarking is a modern concept of organization management, which makes it easier for them to cope with competition in the market based on improvement and learning from others.
The benefits are that instead of looking for their own solutions, thanks to the benchmarking method, companies operating on the market compare themselves with the best companies, use their practices in their activities, "imitating them creatively". By following the effective and efficient activities used by them, thus avoiding losses resulting from the risk of introducing unproven changes, thus gaining information from leaders that help the organization improve its functioning in the market.
This is an ongoing process involving continuous improvement, gaining knowledge, gathering information and its appropriate use in the pursuit of the ideal.
Thanks to the cognitive process of the best companies and leaders in the world using the benchmarking method, other companies with less competition also have a real opportunity to become leaders if they successively analyse and implement the best companies' solutions to their organization and overcome the incentives and cures for the ideas and achievements of other companies that they significantly exceed their current achievements.
Types of benchmarking:
- internal - is based on comparisons taking place inside the organization, such as: branches and departments
- competitive - consists in comparing the organization with companies from the same or a similar industry
- functional - thanks to functional benchmarking, companies can find better, innovative solutions, outside the industry, and can stimulate creativity among their employees.
We distinguish the strategic benchmarking, productive, processes and management methods. The benefits that arise from them are the processes that determine, through the adopted strategy, a high competitive position by analysing the development of the organization on the market compared to the best companies, by refining the processes necessary to achieve the goals, success, through the use of advanced technologies, stable prices of products and services that can compete effectively with other companies, comparing them to customer needs, and identifying significant factors that lead to success.
There are also other types of benchmarking, including:
- general (horizontal) benchmarking - a type of functional benchmarking, most frequently used
- benchmarking of performance - comparison of several companies in terms of achieved successes
- relational benchmarking - refers to a business partner, shareholders
- marketing benchmarking - a type of strategic benchmarking that places particular emphasis on researching and comparing customer opinions in comparison with competing companies
- project benchmarking - evaluation of the functionality and effectiveness of the new project in which the company is implemented.
Thanks to benchmarking, it is easier for companies to predict the actions of their competitors. An important role here is played by competitive forecasts.
It is helpful in implementing and comparing the best technologies for long-term activities, in developing the abilities and skills of employees, stimulates their creativity, motivates them to achieve successes and goals, improves processes in the company, and improves their effectiveness and efficiency.
Benchmarking enables the assessment of competitiveness, cares for the improvement of products and services depending on the satisfaction of customer needs, sets the directions of development.
When applying the benchmarking method in a company, be wise to approach it, as it can also damage the organization if implemented without sufficient knowledge and only in the short term.
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