Benchmarking is not a comparison of numbers or indicators. Benchmarking is an ACTIVITY or PROCESS to determine Best Practice, and your relationship to that Best Practice.
Benchmarking is an activity that employs a systematic and continuous effort to identify important measureables (benchmarks). It employs a defined process to compare your organization’s status to that of a best-in-class company or companies. Benchmarking is a tool that helps you identify, improve and implement the practices or methods that will enable you to become the new ‘best-in-class.’
Two rules for effective Benchmarking are:
- If Benchmarking does not lead to a specific action, it is a waste of your company’s resources;
- If you aren’t Benchmarking to the best, your Benchmarking will be under effective.
Competitive analysis can tell you what the differences are between you and another company, but it does not give you any insight into how that difference exists. Benchmarking focuses on best practices and methods, resulting in process changes and improvements that will achieve improved customer satisfaction.
Site visits in my experience result in some limited information sharing and collection of novel ideas, but after the visit, these are recognized to be a smorgasbord of unfocused facts. While these facts may be interesting, they may or may not be applicable to your firm or what you are trying to accomplish. This is especially true if the facility that you are visiting is not a best in class peer.
PMPA members have a Benchmarking ‘tool they can use’ to measure their company’s performance against their peers in manufacturing.
Called PMPA iLumen Benchmarking Service, this safe, secure online tool allows participating members to compare their company’s financial and operating performance against that of their peers or other manufacturing companies. Seeing the difference between their firm’s and other firms’ performance in key areas gives the PMPA members a focus for their company’s improvement activities.
In the April Issue of PMPA’s Business Trends Report, almost half of the companies that reported double digit sales increases over the prior month were PMPA iLumen Benchmark participants.These companies have used the intelligence of the PMPA iLumen Benchmarking data to show them where to address improvements in their organization.
Participation in PMPA iLumen Benchmarking is no extra charge for PMPA members- it is a member benefit.
Numbers may be the language of Benchmarking, but they are merely raw material that drives the real activity- continuous improvement and transformation of your people, processes, and systems. These improvements will result in higher quality, lower costs, and ultimately, improvement of your company’s products and services. PMPA’s iLumen Benchmarking Service can provide you too, with “tools you can use” to drive improvements in your companies processes and performance.