Introduction.
Nowadays companies compete strongly against others to make a place for themselves in the market; Organizations use different resources and means to attract consumers and thereby generate more profits.
Having competition, looking at it from the negative point of view means problems for the company, that is, limitations in the achievement of the objectives; But if seen from another perspective, competition can serve as motivation for the organization in general.
Another point that can be emphasized is the learning that organizations can obtain from their competitors, so much so, that there is a more than adequate tool for this: benchmarking.
The knowledge that one company can obtain from another can be very useful for the organization. Organizations can learn from the competition elements in which they believe that there are deficiencies; This does not mean that they create copies of the methods used by others, but rather adaptations to the specific needs of the organism.
Basic concepts.
For a better understanding of the subject, the following is defined:
- Benchmarking: it is a process in which an organization and its competition (direct and indirect) are compared, it also includes other businesses that are leaders in other markets in order to find and analyze their winning strategies, and if possible, use them in the company itself (Entreprenur, 2012). Benchmarking: it is a process that occurs continuously and where references are taken from the products, services and work methodologies of the competition and leading companies; These references are compared with those of the company to make improvements and subsequently apply them (Espinoza, 2017).
- Tool: it is an element created in order to make a certain activity or task easier (Ucha, Definicion ABC, 2009).
It can be said that benchmarking is a tool, in this case, an administrative tool for business development that is used as a method of comparing the goods or services and the processes of the company that performs the comparison, with its competition or other organizations. in order to create improvements, apply them and thus increase the chances of achieving the planned objectives. These comparisons and improvements are based on the needs of the company and are not just a copy of them.
Main objectives of benchmarking.
The use of benchmarking aims at the following (Quality and Environment, 2016):
- Determine the results in the processes of other organizations with respect to the key points of success established by the company. Detect how those results were achieved. Use the information collected as a basis to define the objectives and strategies to be followed, to apply them within the company.
Rojas Gutierrez KY (2016) mentions two other objectives that benchmarking provides to organizations, which are:
- Quality level: the value added to a product or service, based on its cost of production and the price at which it is sold. Productivity: comparison of how much is produced and consumed in the different companies, in order to compare the efficiency of the processes.
Benchmarking is not a copy of the forms of success of companies, but rather the factors that lead them to success are taken into account and based on this it is applied in organizations which have different needs, so only Compare the areas where there is a deficiency.
Benchmarking philosophy.
The benchmarking philosophy can be described in the following four points:
- Knowing the procedures the organizations analyze their procedures in order to find weak points and in this way take advantage of them, likewise, they must know the strengths of each one; therefore they will know how to defend themselves. Having knowledge of competition managers and other industries: comparing industry best practices as well as their managers with the company itself, ensure the path to success; this is why it is necessary to know about other organisms. Make sure to include the best strengths of other organizations: to apply benchmarking correctly, it is necessary to identify the areas that perform best, as well as how they do it and why. An imitation of these strengths is made, but without actually copying them at all;in turn they are improved depending on the demands of the company. Feeling of aggrandizement: the feeling of aggrandizement is obtained by investigating and applying improvements in procedures, taking advantage of the strengths that one has. Therefore confidence within the organization will be positively affected and productivity will be better (Luna Lagunes, Gestiopolis, 2016)
In this philosophical step it is based on benchmarking to be used and applied within organizations; although it depends on the needs of each one to apply them.
The general process of benchmarking.
Benchmarking like any process or methodology can be divided; In this case, it is divided into: procedures and measurement (when applying the procedures).
In benchmarking, the first thing to do is to collect the companies' procedures and focus on them; from this collection, obtain the measurements that account for the effect of the procedures. Based on these measurements, the gap between the procedures used by one company and another will be determined.
To find the gap between the procedures, the following questions can be asked: How much? How? And where? However, in order to fill this space, you need deep knowledge and better processes.
Within the benchmarking process, it is essential that the organization is committed to what it wants to do and must not falter during the process. Likewise, the level of communication must be excellent so that the information transmitted within the company about the process be clearly issued and received. Finally, the participation of the collaborators is of utmost importance to carry out each step of the process.
Benchmarking typologies
Most companies begin to use benchmarking internally, that is, in their own areas; they begin by comparing each other.
This is only the beginning, in which the strengths of the organization are detected. It should be noted that when using this type of benchmarking, it is known beforehand that some of the processes are more efficient than others; Basically, the premise of benchmarking internally is to detect internal development standards.
The immediate benefits provided by using internal benchmarking are immediately identified by most organizations, after which they transmit the information to other areas of the company.
Having knowledge of the organization itself, becomes the support of subsequent research, in turn, fosters communication among collaborators.
The advantages of using this type of benchmarking lie in the fact that the collection of information is easy and fast, while the results obtained are good for companies of excellence that are diversified. On the other hand, the disadvantages that it may have is the area to which the comparison is reduced (the same organization) since other points of view different from those of the company and the prejudices that may exist internally are not taken.
Competitive benchmarking.
Within this typology of benchmarking the identification of products, services, work processes and production are made based on the direct competition of the organization. The main objective of competitive benchmarking is to find information about competing products and / or services and processes; after this, we proceed to compare them with those of the organization itself.
For some companies, this type of benchmarking is very beneficial when what is sought is to place a product, service or process of the organization on the market, since it takes as a reference the methods used by other organizations.
On some occasions the procedures that are extracted from the competition can be used in the organization itself without any complications. Another point to consider is that competitors can also use benchmarking and sometimes it is possible to share information between the two, obviously, certain parameters of confidentiality are established to achieve this.
According to Espinoza (2017), this type of benchmarking is the most complicated to carry out, since between competencies most of the time there is no willingness to cooperate. The paradigm that companies have regarding competition is that it is not trustworthy or in other cases, they are considered enemies or rivals; This is what makes cooperation between organizations difficult.
Functional benchmarking.
Within the benchmarking process it is possible to detect functional competitors or companies that are industry leaders; Within this type of benchmarking, it is not necessary for organizations to belong to the same sector as the company that performs the comparison process. In other words, it is not necessary to just focus on direct competitors.
An example of this is the logistics of the organization; It looks for companies that excel in this area to make comparisons and then apply the knowledge acquired to their own needs.
The task of identifying companies under the requirements that need to be met is not very difficult. You can identify the company that has the best work mechanics or processes, whatever they have. The key point of this type of benchmarking is to detect if the leading organizations are promoted by the needs of the consumer.
According to Camp (2001) there are many reasons why functional benchmarking is productive, the most frequent is that it is much easier to have an interest in the research and data that comes from others, that is, shared. The interest that exists in having the procedures of any other place occurs naturally, likewise, the comparison between companies generates a certain expectation. It has been detected that the procedures identified in industries that differ from the company that performs the benchmarking, are more accepted than those of the organization itself.
Applying benchmarkin in companies in other areas, overcomes the stigma of "it was not invented here", which most of the time occurs when benchmarking internally.
Generic Benchmarking.
This type of benchmarking presents difficulty in its acceptance and use, but it is the one that has the greatest utility in the long term. This typology requires a fairly broad conceptualization and a clear understanding of the generic process.
Within this type of benchmarking, it is identified that some of the processes and activities are the same among companies, regardless of the sector in which they are engaged. For example, the dispatch and reception of orders, customer service, among other activities are functions that most companies perform, whether they are competitors or not; However, not all companies carry them out with the same methodology or the same tools.
One of the main benefits of applying this benchmarking is finding procedures and methodologies that are not applied in the company that performs the comparison process. It is possible to find techniques that with only a few small adjustments fit perfectly to increase the success factor of the company; It is also possible to find technologies that are useful and have approval certification from other organizations that have used it.
Phases and steps of the benchmarking process
Using benchmarking as a tool that allows the development of the organization is essential to know the phases that it takes to do and the steps that each phase covers. Figure 1 shows the different phases of benchmarking and their respective steps.
Figure 1: Phases and steps of benchmarking. Source: own elaboration, based on Camp (2001)
The main objective of this first phase of benchmarking is to plan its investigations. As in other elaborations of plans, it begins with the questions of: what, who and how. The following three steps belong to this phase:
- Identify what benchmarking will be applied to.
The key point to detect to which benchmarking should be applied is to find the product of the business function, although sometimes it is not easily identified. Another point where benchmarking can be applied is in the production process and in what is being produced, since this is easily measurable and comparable between one company with respect to the other. Other areas where you can make use of the benchmarking process are the following:
- Customer needs or Products or services Developed products Services provided Elements contributing to success
- Degree of customer satisfaction. o Delivery service. Unit costs.
- Detection of companies to which it can be compared.
To detect that against which companies it is preferable to compare the company that performs the benchmarking, the following must be considered;
- Competition in broad terms:
- Which organizations have the best procedures in the industry? Operations that can be compared where the best procedures, methodologies or processes are used.
- High performing organizations should be compared or measured with high performing organizations. Product characteristics should be
- Identify innovative procedures wherever they are, regardless of industry sectors.
- Collection of data.
There is a wide variety of sources of information to carry out data collection, the vast majority of which can be obtained publicly and easily. Whoever performs the benchmarking research must select the information that best suits the needs. The sources that can be used to collect data are as follows:
- Internal: database of libraries, publications and reviews External: professional associations, industry publications, newspapers, seminars, business or technical libraries, industry experts, etc. Original Research: customer feedback, surveys, networks.
Analysis phase.
Once the three planning steps have been carried out, the collected information is analyzed. This phase should incorporate a careful understanding of current process procedures. The steps within this phase are the following two:
- Determination of the existing gap of current performance.
The analysis of the collected data and the comparison of the same show the existing performance gap between one organization and another, be it positive or negative. The gap that currently exists for the organization that performs the benchmarking is: "the measure of the difference between the internal performance of the company and that of the best organization in the industry" (Camp, 2001).
There are three types of gaps that can be found during the analysis, these are:
- Negative: the procedures from abroad are superior. Equivalents: the procedures have no significant differences. Positive: internal procedures are superior.
- Projection of future performance standards.
When the current performance gaps have been established, it is appropriate to project future performance levels; This is because industry procedures tend to change over time and it is important to understand the future trends of the gap. To achieve the projection into the future, the Z graph is used where the gap is captured and represented, driving its current and future moose.
Integration phase.
In this phase, the objectives that will lead to the change and improvement of the organization are established based on the benchmarking findings. Thorough planning has to be done to add the new procedures. The veracity of the data must be proven, supporting the data through the sources. Based on the findings, you can begin to develop the plan or action plans.
The integration phase is made up of the following two steps:
- Transmit the information and obtain general acceptance.
To achieve benchmarking acceptance, communication must be established with the areas involved in the process. You can emphasize the purpose of why benchmarking is necessary and explain in detail the benefits it will bring to the company.
It is necessary to establish an effective communication regarding the benchmarking process to obtain the approval of those who doubt about the benefits that will be obtained, in order to carry out the implementation.
- Set functional goals.
The objectives to be achieved are a statement of the planned performance. The objectives are derived from the benchmarks; These in turn are the best procedures in the industry, in other words, based on the best procedures in the industry, the objectives to be achieved are established.
After establishing the objectives, it is necessary to use a way to convert the benchmarking findings into statements of how the company initiated the change.
Action phase.
After making the organization aware of the benchmarking findings and the changes that will be made, they must be converted into actions. The actions must be specifically start-up, after which measure progress regularly and evaluate the benefits obtained. This phase of action is integrated into three steps:
- Prepare action plans.
In this step, they develop action plans to apply the benchmarking findings. Here the two implementation phases that are part of the action planning process should be considered.
- Tasks to be fulfilled. Behavior of the people regarding the implementation of the change.
- Apply particular actions and examine progress.
Once the benchmarking action plan has been prepared, each of the actions that have been described is applied. It is important to monitor the actions that are implemented so that they are expected to succeed. Benchmarking can redirect the resources of the organization and depending on how it is carried out I will be the degree of success.
Proper monitoring of process status ensures planning success
- Readjust the benchmarks.
Because the best procedures used by the industry change over time, it is necessary to readjust aspects of applied benchmarking that may become obsolete; this in order to keep them updated.
Maturity phase.
Once the previous four phases have been established with their respective steps, the maturity of the implemented implementations will be reached. Incorporating the best procedures in the industry into all the processes of the organization will ensure its superiority.
Maturity is also achieved when the benchmarking process becomes one with the company's administrative process, that is, it becomes a characteristic of the entire organization.
Benchmarking as a development tool.
Benchmarking is a very useful tool for the development of companies, since it is basically a process of setting objectives. Once the best procedures in the industry are converted to operational units of measurement, benchmarks are the future projection of a final goal. Carrying out benchmarking research can be found for example: the need to reduce costs, increase the level of customer satisfaction or the performance of assets.
The conversion of benchmarks into goals that are functional, makes long-term actions specific objectives that must be met, for the improvement of the organization in areas where performance was previously poor. Benchmarking enhances the development of the company in various aspects, encouraging it to achieve superiority.
The benchmarking process goes hand in hand with business planning. Planning is responsible for making short and long-term budgets; and therefore benchmarking is an essential part of these plans. Benchmarking determines the procedures that have to be changed over time in order for the organization to remain competitive. From a metric point of view, benchmarking is a basis for long-term planning.
The business plan includes the goals established based on the benchmarks, as well as the strategies and action plans that will be carried out when best practices are applied. As part of the annual update of the business plan, the benchmarks that need to be updated are readjusted.
Conclusion.
The benchmarking process greatly benefits organizations by correcting the processes in which they have deficiencies, which may be in the area of logistics, order receipt, billing, customer service and satisfaction, among others.
Most of the benefits of this development tool are obtained from setting goals, accurately measuring productivity, becoming competitive and ensuring that the best procedures in the industry are used in the work processes.
Benchmarking is a process that companies should put into practice to keep up with their competition, or better yet, overcome it and gain a good position in the market.
Thesis proposal.
Prepare a benchmarking program for comparison between SMEs in the Orizaba region that are dedicated to the production and marketing of animal feed, in order to find the best practices that can resolve the deficiencies that the organization presents.
Gratitude.
I am deeply grateful to the Technological Institute of Orizaba for contributing to my professional training to this day, to the National Rabbit for Science and Technology (CONACyT) for the financial support that it gives me to continue with my master's studies, to the teachers of the Master's in Administrative Engineering for giving me the opportunity to enter the program and lastly to Dr. Fernando Aguirre y Hernandez for promoting the culture of writing and reading articles.
References
- Camp, RC (2001). Benchmarking: The Search for Industry Best Practices that Lead to Excellent Performance. Mexico DF: Panorama Editorial.Entreprenur. (September 28, 2012). Entreprenur. Retrieved from https://www.entrepreneur.com/article/265507EEspinoza, R. (May 13, 2017). Roberti Espinoz. Welcome to the new marketing. Obtained from http://robertoespinosa.es/2017/05/13/benchmarking-que-es-tipos-ejemples/Luna Lagunes, XA (June 09, 2016). Gestiopolis. Obtained from https://www.gestiopolis.com/benchmarking-herramienta-desarrollo/Rojas Gutierrez, KY (May 19, 2016). Gestiopolis. Obtained from https://www.gestiopolis.com/benchmarking-her Herramientas-desarrolloempresarial/Tijerina Acosta, JI (1999). Benchmarking - Development and Application Methodology. University City:Auntonama University of Nuevo Leon, Ucha, F. (December 31, 2009). ABC definition. Obtained from
