Benchmarking

• refers to investigating, comparing, and evaluat¬ ing a company’s products, processes, and/or ser¬ vices against those of competitors or companies believed to be “best in class.”

• is engaged in by a company to obtain an un¬ derstanding of another’s production and perfor¬ mance methods so that the company can identify its strengths and weaknesses.

• may be of one of three types:

^ results benchmarking, in which an end prod¬ uct or service is examined using “reverse en¬ gineering’’ with a focus on product/service specifications and performance results; this type of benchmarking is performed on com¬ petitors.

process benchmarking, in which a specific process is examined to determine how a “best in class” company achieves its results; this type of benchmarking is often performed on noncompetitors although competitors may also be used.

strategic benchmarking, in which the focus is on understanding how successful compa¬ nies compete. LO.1