Performance benchmarking involves comparing business processes and performance metrics to industry leaders to identify best practices and areas for improvement. It helps companies increase productivity, lower costs, improve quality, and gain competitive advantages. The benchmarking process involves determining weaknesses, forming a benchmarking team, researching potential partners, gathering and analyzing their data, and applying results with or without a third-party consultant. An example is how Dell Computers used benchmarking of other companies to implement just-in-time inventory techniques and online ordering and customization, which provided advantages like reduced costs and increased customer satisfaction.

1. Performance Benchmarking By Douglass Keller

2. Introduction What is performance benchmarking? Why use benchmarking? Who benefits? How does the process work? Significant results of an example.

3. Usefulness of Benchmarking Pareto rule PDCA Increase profit Greater customer satisfaction

4. What Is It? Benchmarking Initiator Target Performance

5. Performance Categories Productivity Research and development Marketing Quality Cost analysis

6. Why? Competitive advantage Increased market share Lower costs Increase sales

7. Who Benefits? Initiator Target Industries Consumers

8. How Does It Work? Determine weaknesses Establish a benchmark team Brainstorm potential partners 4a. Gather and study information 4b. Use third party consultant 5. Apply benchmark results

9. Determine Weakness Comparisons Shortcomings Goals

10. Form a Team Find experts Involve related departments Set objectives

11. Set Targets Brainstorm Research Contact Learn Reciprocate

12. Analyze Benchmarked Information Gather Analyze Plan

13. Third Party Consultants Integrity Benefits Risks

14. Take Action Re - address the plan Test the plan Study the results Act

15. Dell Computers JIT Online ordering Mass customization

16. Dell Computers Excellence in turns Advantages Disadvantages

17. Dell Computers Ordering online Advantages Disadvantages

18. Dell Computers Mass customization Advantages Disadvantages

19. Exercise Research Dell Computers’ inventory information and compare those results with the results from Compaq Computers’ inventory statistics. Which company is the leader and which has something to learn from their superior?

20. Summary Initiator Target Industry Customer Necessary Beneficial

21. Bibliography Internet , Dell Computers, Benchmarking, and Consultants Managing Quality , S. Thomas Foster 2001. Pages 152 – 167. Value Line October 2001. Operations Management, Chase, Aquilano, Jacobs 2001 Pages 5, 100, and 272. Operations Management, Heizer, Render 2001. Pages 176 – 177.