BENCHMARKING

Benchmarking

Benchmarking

Introduction

In today's competitive marketplace, all firms are seeking ways to improve their overall performance. One such method of improvement, recently adopted by many firms, is benchmarking. Benchmarking is a technique used to evaluate internal business processes. "In this analysis, managers determine the firm's critical processes and outputs, baseline those processes, then compare the performance of each process against a standard outside the industry" (Bounds, Yorks, Adams, & Ranney 1994). To effectively improve a business process to world-class quality, managers must find a firm that is recognized as a global leader, not just the industry standard. Successful benchmarking requires tailor-made solutions, not just blind copying of another organization. Measurement and interpretation of data collected is the key to creating business process solutions.

"Benchmarking's real role has to be seen in the context of the organization that is continuously implementing improvement" (Bendell, Boulter, & Goodstadt 1998). Organizations implementing the benchmarking process are continuously looking to improve, and planning improvement. Improvements can be made by looking at the firm both internally and externally. Internal improvements are implemented by analyzing processes and setting targets for performance.

Benchmarking of British Airways and Southwest Airlines

According to British Airways' press office (1/27/99), "British Airways is seeing great results from its on-going punctuality push, with record levels of on-time departures being achieved." This initiative has enabled British Airways to maintain an on-time departure rate of eighty percent. The Association of European Airlines (11/17/99) reported "thirty and a half percent of Intra-European flights were delayed by over fifteen minutes in the third quarter of 1999." Numerous programs have been established in order to maintain and improve British Airways' punctuality.

The first initiative is the "minus ten" approach. Departure gates are closed ten minutes before flight to ensure that passengers are safely seated for take-off on time. This enables the pilot and crew to ...