| Benchmarking
is a strategic
approach used to improve systems. It
involves comparing a system used in your
organization with the equivalent system
elsewhere. This may be in a competitor’s
company, a company in another industry that
is particularly effective with the system
concerned, or even in another division of
your own organization.
Benchmarking is often used to improve systems
that are critical, but are not the core
business. For example, a manufacturing company
might use benchmarking to improve its distribution
system. It might benchmark against a company
where distribution is a core activity, and
that is known for excellence; for example
Federal Express.
The purpose is to find out how the other
company achieved their performance level
and use the information to improve the purpose
of your own organization.
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