Intended learning outcomes: Differentiate between benchmarking in very different industries and of different sizes at the level of the general management, and benchmarking with other firms in the same industry sector.
Benchmarking means identifying best practices that result in outstanding performance.
If companies compare themselves to firms in very different industries and of different sizes at the level of the general management, they will discover that they have strengths in different areas. A company can in this way obtain information about the improvement strategies set by very different firms. Occasionally, this can give rise to ideas on how practices in other industry sectors and companies might be applied to their own business activities. Nevertheless, benchmarking on too broad a base has only limited effectiveness.
Just as important, thus, are comparisons with other firms in the same industry sector. Once comparable processes, products, or organizational units are available, measurement criteria can be set up that should be included in the comparison procedure. Benchmarking extends to any aspect of the company that represents a best practice. Once the benchmarking partners and the objects to be compared have been established, it is possible to examine how the reference partner achieves outstanding performance. What key processes are involved? What is the company culture behind this? On the basis of the answers to these questions, companies can derive their own new goals. On implementation, see, for example, [Camp94].
Herein are the limits of benchmarking with competitors within the same branch of industry. Direct competitors will hardly be willing to reveal the secrets of their success. Information on competitors’ best practices should probably be acquired from third parties. Direct collaboration in benchmarking among competitors only makes sense if it results in a win–win situation for both partners. This can be the case when otherwise competing suppliers in one geographic region decide to take on the suppliers in another geographic region.
For these reasons, the tendency is for groups of companies to form that are not competitors on the market but that have comparable processes, company structures, and stakeholders. Functional benchmarking compares similar processes or functions. Here a rather broad spectrum of companies can be examined. For example, companies might compare functions of operations and supply chain management. Generic benchmarking is comparing not only individual functions, but whole business processes, such as the R&D process. Here, the selection of comparable companies will, of course, be smaller.
Course section 18.3: Subsections and their intended learning outcomes
18.3 TQM (Total Quality Management) and Quality Management Systems
Intended learning outcomes: Present standards and norms of quality management: ISO 9000:2015. Describe the optimization paradigm: models and awards for Total Quality Management. Produce an overview on audits and procedures for assessing the quality of organizations, as well as on benchmarking.
18.3.1 Standards and Norms of Quality Management: ISO 9000:2015
Intended learning outcomes: Disclose standards in the DIN ISO 9000:2015 series (without ISO 10001 to 10004). Differentiate between the fulfillment paradigm and the optimization paradigm.
18.3.2 Deming Prize, MBNQA, EFQM — Models and Awards for Total Quality Management
Intended learning outcomes: Present the Deming Prize and the Malcolm Baldrige National Quality Award (MBNQA). Produce an overview on Deming Prize examination criteria and the structure of the MBNQA. Explain the EFQM Excellence Model and the EFQM Excellence Award.
18.3.3 Audits and Procedures for Assessing the Quality of Organizations
Intended learning outcomes: Identify the quality audit. Differentiate between first-party or internal audit, second-party audit, and third-party audit.
18.3.4 Benchmarking
Intended learning outcomes: Differentiate between benchmarking in very different industries and of different sizes at the level of the general management, and benchmarking with other firms in the same industry sector.
