BENCHMARKING AND CONTRACT MANAGEMENT MATURITY MODELS
Benchmarking
Introduction
In order to gauge how successful your company is, you can compare
it to other companies that are the best at a certain activity. Read this
section to learn how to successfully benchmark your company.
Benchmarking is a process by which a company compares its
performance to the performance of other companies. Those other
companies need not be competitors, nor be within the same
industry. Instead, the purpose of benchmarking is to set a standard
based upon the company that is recognized as the best at a certain
activity. As an example, many companies use L.L. Bean as a
benchmark for online ordering and order fulfillment. To be effective
at benchmarking, firms must understand that a benchmark does not
define the best possible outcome; it only identifies what a company
has achieved. Choosing the wrong companies to benchmark can lead
to setting standards that are too low. As a result, a benchmark is only
one piece of information that companies should use to set
performance goals for quality or any other important outcome.
Note. Adapted from “Quality Management,” by M. Vonderembse &
G. White, 2013, Operations Management, Chapter 4. Copyright 2013
by Bridgepoint Education, Inc.

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