Many organizations have started working with Process Benchmarking since the framework fits nicely into an operational approach to improving performance.
Process Benchmarking focuses on selected production processes in the business rather than on the business as a whole. The presumption behind the analysis is that by identifying best practice processes and comparing actual processes that firms utilize, managers can improve the performance of sub-systems—leading to better overall performance. The goal of process benchmarking is to improve different stages of the production process and to increase efficiency by “learning from others”. Sharing experiences is crucial for the success of the technique. For example, by comparing specific core indicators (and the procedures currently used that affect those indicators) for a set of utilities, best practice can be hopefully identified and transferred to weak performers, who should adopt in order to increase efficiency.
Thus, Process benchmarking consists of a mechanism for identifying specific work procedures that could be improved by imitating external examples of excellence that can be set as the best standard in the industry. In that sense, Process Benchmarking involves the comparison of one’s own utility with other similar utilities, with the purpose of self-improvement through adopting structures or methods that happen to be successful elsewhere. Summarizing, it allows a firm to find out how others do business, whether they are more efficient or not and, if so, whether the firm can understand and use those methods to its own advantage.
Recall that metric benchmarking identifies areas of weak performance where changes need to be made to the way things are done, while process benchmarking is a vehicle for achieving this change.
- Advantages: Such detailed benchmarking includes comparisons of engineering practices, data collection procedures, office routines and performance indicators for each of the processes under study. Flow diagrams can capture key relationships and assist managers in identifying areas for improvement.
- Disadvantages : The focus on specific procedures is very management-oriented, which means that an external monitor must depend on the information provided by utilities. Comparisons across utilities can be problematic due to particularities between the different utilities.
- Application: The Netherlands Waterworks Association (Vewin) and the Scandinavian Six Cities Group (composed of Copenhagen, Helsinki, Oslo, Stockholm, Gothenburg and Malmö) have used process benchmarking to identify and isolate areas for improvement.
