Four steps to internal benchmarking

Nov 01, 2006 10:30 PM  By

Benchmarking is the process of drawing meaningful comparisons between a company’s performance and the performance of identified best practices. Internal benchmarking is looking within your firm to find your own pearls of wisdom to leverage across the organization rather than looking to other companies or other industries. Internal benchmarking can help reduce the amount of time you spend on benchmarking. Plus, it may be easier for employees to buy in to a best practice when they can see it demonstrated within their own company.

Companies can identify internal best practices from multiple sources. This is especially true for midsize and large companies with multiple divisions, warehouses, or business units. For example, if a company is benchmarking a customer fulfillment process, employees involved in the effort may look across various warehouses to identify which one of the warehouses performs the best.

To be effective at internal benchmarking, you need to implement a process designed to promote idea sharing. Here are four simple steps to help you get started:

  • Identify which processes to benchmark. Do you want to start with receiving, say, or order management?

  • Organize the benchmarking effort. This can be as simple having one or two people from each warehouse conduct one- or two-day site visits at each of your warehouses with the goal of discovering effective tactics and strategies at each.

  • Prioritize the ideas the team finds, and turn them into projects with time lines for adopting the best practices you have found. Your team will likely find several areas for improvement, and prioritizing ideas into a project will help you realize your improvements faster than taking a shotgun approach.

  • Implement and begin to realize the benefits. In the most basic terms, if warehouse X is identified as the best at receiving, then your team should spend time learning the underlying circumstances that propel excellent performance in warehouse X and begin to translate those practices to the circumstances in the other warehouses.


Kate Vitasek is president/founder of Bellevue, WA-based consultancy Supply Chain Visions.