Benchmarking is to find advanced enterprises of the same type, and then compare them with other enterprises with their own unit cost, labor efficiency, price and other indicators.
Benchmarking management is usually divided into four types. First, internal benchmarking. Many large companies have similar functions in different departments. By comparing these departments, it is helpful to find out the operating standards of internal business. This is the simplest benchmarking. Its advantage is that it shares a large amount of information, and the internal knowledge can be used immediately, but it is also easy to shut down and ignore the information of other companies. Second, the competition benchmark. For enterprises, the most obvious goal is direct competition, because they have similar products and markets. You can see the results of bidding against competitors, but the disadvantage is that competitors are generally reluctant to disclose the information of the best cases. Third, industry or function benchmarking. In other words, the company is based on companies in the same industry but not in a market. The advantage of this kind of benchmarking is that it is easy to find benchmarking objects who are willing to share information, because they are not direct competitors. But now many large companies can't stand too many such information exchange requests and start charging. Fourthly, unrelated companies bid a certain process, that is, general or procedural bidding. Comparatively speaking, this method is the most difficult to realize.
As for the company's choice of benchmarking method, it is determined by the benchmarking content. Benchmarking was initiated by American Xerox Company in 1979. It is considered as one of the most important management methods to support enterprises to continuously improve and gain competitive advantage in modern western developed countries. Western management scholars listed benchmarking, enterprise reengineering and strategic alliance as the three major management methods in the 1990s. Benchmarking originated in American companies in the 1970s. Following the popularity in Europe and America, Asia-Pacific has also developed rapidly. Not only companies, but also hospitals, governments and universities are beginning to find the value of benchmarking.
The basic idea of benchmarking management can be summarized in ten words, namely, "benchmarking, benchmarking, benchmarking, reaching standards and creating standards".