Advantages of Benchmarking

A benchmarking study results in valuable data that can stimulate thought-provoking discus­sions with key stakeholders. The results provide answers to the following key questions for the company:

  • How well are we performing compared to other companies?
  • What are best practices?
  • What improvement opportunities should we focus on?

Establishing operating targets based on the best possible industry practices is critical to the success of any organization. Benchmarking can benefit organizations by:

  • Helping to identify the current position of your business and determining priorities for improving environmental performance.
  • Allowing comparisons with previous benchmarking profiles and against recognized best practices.
  • Encouraging regular monitoring of progress and a programme of continuous improve­ment.
  • Increasing the competitiveness of the organization by demonstrating environmental improvements to customers and shareholders.

Toyota is a brand name closely associated with the term “benchmark” when it pertains to the automotive industry. Toyota is benchmarked as the best-in-the-class by all of its peers and competitors throughout the world for high quality, high productivity, manufacturing speed and flexibility. Toyota automobiles have consistently been at the top of quality rankings in surveys conducted by J D Powers and Associates, consumer reports and others for many years. Much of Toyota’s success comes from its astounding reputation for quality. Many organizations in India have also used the benchmarking technique to great success. Box 11.1 discusses how the NTR Trust, a social organization in Andhra Pradesh, India, set a global benchmark in maternal mortality.

Box 11.1 NTR Trust Sets Global Benchmark in Maternal Mortality

The NTR Trust was founded in 1997 in memory of N. T. Rama Rao, the late Chief Minister of Andhra Pradesh. The trust is committed to the economic empowerment of the people of Andhra Pradesh. The trust is known for its pioneering social work in the areas of health care, education and training. The key focus areas of the trust are primary health care, blood banks, women and child welfare, entrepreneurial skills and career development covering nearly 0.7 million beneficiaries.

The trustee decided to benchmark services given to its beneficiaries against United Nations stipulations. The millennium goals, set by the United Nations, stipulate that the ratio of maternal mortality should be reduced by three-quarters between 1990 and 2015. The maternal mortality
across the world is 400 per 100,000 as against India’s 300 per 100,000. In Andhra Pradesh, the rate is 195 per 100,000.

The trust’s healthcare programme Thalli Bidda Samrakashana Fadhakam, run in association with four leading medical institutions set a benchmark in health care by minimizing maternal mor­tality in 257 villages in various parts of Andhra Pradesh. The trust’s achievement in women and child welfare has surpassed Indian and global maternal mortality goals. The distinction has been achieved by minimizing the maternal deaths to two in 15,000 deliveries in 257 villages. This was achieved in the shortest possible time of 24 months between December 2006 and December 2008. Source: Adapted from www.ntrtrust.org, accessed on 30 June, 2016.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.

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