What is benchmarking?
Benchmarking answers two questions: how good could we be? and how do the best get there? Comparing your results with others turns a vague sense of "we could do better" into a measured gap and a realistic target, and studying the practices of the leaders gives you proven ideas to close it. Benchmarking is part of the Measure phase in design for Six Sigma and feeds the competitive ratings of the house of quality.
Types of benchmarking
| Type | Compare with | Pros and cons |
|---|---|---|
| Internal | Other sites, lines or teams | Easy data access; limited to your own standards |
| Competitive | Direct competitors | Most relevant; data is hard to get |
| Functional | Leaders of the same function in other industries | Open partners, fresh ideas; needs translation |
| Generic | Any organization excellent at a process | Breakthrough ideas; least directly comparable |
The benchmarking process
- Plan: choose what to benchmark (start with a known problem or a strategic goal), define the metrics precisely and select partners.
- Collect: gather comparable data and learn the practices, through surveys, published data or site visits.
- Analyse: size the gaps, and identify the enablers that explain the leader's results.
- Adapt: set targets, adapt the practices that fit, implement them and measure the effect.
Benchmarking example
A pharmaceutical site compares its QC release and deviation performance with a sister site, the industry median and a best-in-class contract manufacturer. It ranks last on four of six metrics. The largest relative gap is in deviations per 100 batches (14 against 4, 71%), followed by QC release lead time (12 days against 5, 58%) and OOS results (0.6% against 0.3%). The site leads on complaint response time (2 days), and meets one of its six targets. The leader's practices, review by exception in LIMS, 24-hour deviation triage and electronic batch records, become three actions in the plan, owned and dated.
Track the targets afterwards with a PDCA cycle or an action plan.
How to use this Benchmarking tool
- Plan the study. Write what you are benchmarking and why, who the partners are and where the data comes from.
- Add partners and metrics. Name the partners in the data table, and click + to add each metric with its unit and whether higher or lower is better.
- Enter the values. Enter our value, each partner's value and our target for each metric.
- Read the gaps. The chart puts every metric on its own scale with better to the right, and shows the gap to the best and our rank.
- Record the practices. For each gap, note what the leader does differently.
- Plan the adaptation. Add actions to adapt the practices that fit, then export to PDF or Excel.
Frequently asked questions
What is benchmarking?
Benchmarking is the systematic comparison of your performance and practices with those of others, usually the best, to find gaps and learn how to close them. Robert Camp of Xerox, who popularised it, defined it as "the search for industry best practices that lead to superior performance".
What are the types of benchmarking?
Internal benchmarking compares sites or teams within one organization. Competitive benchmarking compares with direct competitors. Functional benchmarking compares a function (for example, warehousing) with leaders in other industries. Generic benchmarking looks at a process anywhere it is done well. Performance benchmarking compares results; process benchmarking compares how the work is done.
What are the steps of benchmarking?
A common four-step model is plan (what to benchmark and with whom), collect (data and practices from partners), analyse (gaps and the enablers behind them) and adapt (set targets and implement the practices that fit). Xerox's classic model breaks this into 10 steps.
How is the gap calculated?
For each metric, the tool finds the best value among all comparators, taking into account whether higher or lower is better. The gap is the difference between our value and the best, and the gap % is that difference relative to our own value. Our rank is our position among all comparators with a value.
Where can I find benchmarking data?
Internal data from other sites, industry surveys and associations, published reports and annual reports, regulators' public data, benchmarking consortia, and direct exchange with partners under a benchmarking code of conduct. Always check that the definitions match: two "lead times" measured differently cannot be compared.
Is benchmarking the same as copying?
No. Results tell you where the gap is; the practices behind them tell you why. The aim is to understand the enablers and adapt the ones that fit your context, not to copy another organization's processes.