1.1. Benchmarking: concept, goals and objectives
Russia's transition to new system management, of course, affected all aspects of the social, socio-economic and cultural life of the population, especially business. The bulk of the leaders of Soviet enterprises knew about competition only in general terms from textbooks, the issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans), they could think about increasing profits, as it was supposed, only in bourgeois countries. The low interest in the case was also due to the fact that the enterprises were not the property of the head.
Today, the principles of management, goals and ways to achieve goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service in order to make competent and timely management decisions to improve business efficiency. Marketing services are often engaged in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search and formation of an optimal, but mobile commodity, price, marketing policy, as well as strategic planning of the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system in market conditions are ensured, taking into account the state of internal and external environment. Marketing activity is based on the conducted marketing research, as on their basis the development of a strategy and a program of marketing activities is carried out, the use of which will help increase the productivity of the company, maximize the satisfaction of the needs of the consumer or client. results marketing research most important for leadership as well as the adoption of entrepreneurial and marketing solutions, to eliminate or reduce the uncertainty of external and internal conditions of behavior of the subjects of the marketing system. It is almost impossible to avoid risk, but adverse consequences can be predicted, prevented or mitigated in advance. A minimum of uncertainty is what you need to strive for, because it’s not in vain that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problem situations that an organization may encounter in the process marketing activities. Thus, in order to effectively build the work of an organization, it is not enough for a management or a firm to have information only about internal features state of the company and production and economic activities, this approach is irrelevant and will not stand the test of time. Modern successful businessmen give preference to continuous strategic planning of all production, marketing and commercial activities organizations, while operational planning does not lose its significance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to analyze and draw conclusions, it became necessary to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and directions for the development of marketing and management. Practice has proven that the classical definition of marketing, which implies well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. AT recent times other areas of modern marketing appeared and began to be put into practice (interaction marketing, strategic orientation of marketing, etc.), one of the most effective and popular was and remains benchmarking.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the "Russian ear" and relatively recently began to be used in Russia, it does not have a literal translation into Russian. The term "benchmarking" comes from the word "benchmark", meaning a mark according to some established criterion (for example, a mark on a sign that prohibits children shorter than it from entering the attraction). We can say that a benchmark is something that has a certain quantity and quality, which can be used as a standard or benchmark when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographical location. Benchmarking is the art of finding or identifying what others do best, and then learning, improving and applying other people's methods of work. It may seem to the layman that there is nothing unusual or new here, that we are talking about good old but deprecated methods (such as espionage, copying, imitating business or technology). Indeed, like it or not, but you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” have been carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own efficiency. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries has long won a "place in the sun" among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course not in modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning "the effort, concern, concern of the best (leader) to become even better (leader)". In China, when talking about benchmarking, they often recall the rule of the Chinese general Sun Tzu: "When you know your enemy and know yourself, you are not afraid of the result of a hundred wars." On the present stage the use of benchmarking due to the main principle "from best to best" leads to life, to the success of many companies in the US, Japan, Western Europe. Benchmarking was first applied in 1972 at the initiative of the Institute strategic planning Cambridge (USA). Impact research and consulting organization PIMS marketing strategies for profit, found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience the best enterprises who have been successful under similar conditions.
In 1979, the well-known large American company launched the Competitiveness Benchmarking project to conduct a complete cost and quality analysis of its own products in comparison with a similar Japanese company. The project was very successful and attracted a lot of attention. Benchmarking after that began to be intensively distributed among specialists in the USA and applied in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to find an exact description of him.
The Center for Productivity and Quality (Bestinghouse) sees benchmarking as an ongoing process of detailed exploration of best practices that can rapidly improve competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of a competitive analysis, however, the use of benchmarking is more effective because it is a more detailed, formalized and streamlined methodology compared to a competitive analysis method or approach. Benchmarking for today is an essential ingredient for the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking contributes to the rapid, low-cost identification and prevention of problem situations in logistics systems related to areas close to the buyer, to the fulfillment of orders and transportation.
Benchmarking visually reflects where a firm or market can face cost or quality problems, and also shows the organization's place among competitors. He finds and identifies problems in the course of work, concretizing them.
Many experts in economics and marketing are convinced that benchmarking should become a permanent process in the company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and frameworks managerial functions However, the main source of information about products, the market and competitors remains the consumer.
Benchmarking can be thought of as a way of evaluating strategies and performance goals against more successful peers in order to take a long-term position in the market.
Many firms that use benchmarking are convinced that it contributes to a reliable competitiveness, as well as creating the prerequisites for constantly monitoring the level of company performance in the context of the internationalization of the processes of procurement of raw materials and materials.
Benchmarking experience is also used to define the company's success strategy. Close attention is directed to the following questions: who? as? why? (Which firm climbed to the top of the competition? Why own organization did not become the best in its field? What can be changed and what needs to be kept at the enterprise to make it better? How to implement an appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. The most important activities of employees and the company as a whole are value-oriented planning, as well as literacy, sociability, competence in the field of work with clients, technologies and cultures. entrepreneurial activity. Some believe that benchmarking is an activity that is directly related to customers, technology and business culture, as well as being interconnected with planning. In general, benchmarking can be attributed to a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking is the adoption of management methods from others, successfully existing companies and entrepreneurs in order to, by comparison with other areas of business activity or competitors, determine, identify weak sides of your organization.
The application of benchmarking consists in a simplified version of four consecutive steps:
1) awareness and analysis of the details of their own business processes.
Ideally, they should be known thoroughly at every stage of production, but it is better to regularly check the "health" of your organization in order to know weak spots and try to smooth out all the negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, because no one will agree to bring you the secret of your success, always achieved by hard work, both physical and intellectual. Most often, if you do not take into account proprietary technologies, this is a big trade secret that is diligently protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales scheme, formal organization and other things;
3) comparison of the results of their processes with the results of the analyzed firms. Here it is necessary to involve specialists, most often organizations cope on their own;
4) the introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial injections, the involvement of specialists or retraining of its employees, the development of new technologies, the introduction of modern management and decision-making methods. Thus, it is possible to distinguish types of benchmarking. Here are just a few:
1) internal - the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors in the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional - comparison by functions (sales, purchases, etc.).
Benchmarking is never a one-time analysis. In order to have a return, increase the efficiency of the enterprise, it is necessary to do benchmarking integral part work, a regular process of innovation and improvement in your business.
In Japan, benchmarking is popular and has been used there for a long time. Japanese firms have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called "me too", which in some way can be considered an evolution of the Sun Tzu rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: the strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. Predicting the effect that the use of benchmarking can give, it should be remembered that the fact that the exchange of experience and its analysis has never been disputed by anyone has been disputed. However, “one should not scratch everyone one size fits all”, because, although many enterprises and activities or productions are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need for benchmarking must first be justified and proven.
Summing up, we can say that the benefit of benchmarking is that production processes, trading operations and marketing functions become the most manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This can be the beginning, a new stage in the development of a profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
To date, accumulated great amount interpretations of the concept of benchmarking. Some believe that it is the product of a consistent development of the concept of competitiveness, others say that benchmarking is a mobile quality improvement algorithm, while still others consider it to be an exotic novelty as a result of Japanese business practice. However, everyone agrees, or more or less agrees, on the definition that benchmarking is the process of finding, identifying, and studying the very best known management and business practices.
1.2. Development and formation of benchmarking
Benchmarking- this is a new word in the highest business circles in Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation of upbringing of the last century and the corresponding hardening confuse it with industrial intelligence or espionage hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since "that man over there in the hut across the street has done much better than the rest of us." The term has been given new interest and interest by business consultants, who are brought in by many firms of all shapes and sizes to teach them how to keep an organization's revenues up to par with those of their peers. Benchmarking in the way it is now has not always been, the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. AT late XIX century American engineer Frederick Taylor (Frederick Taylor) explored the scientific methods of labor organization, which formed the basis of the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a specialist in quality control, in which he reveals the periodization of the stages of management. Yes, he considers four stages of management change, through which the world has passed in the last half of the 20th century:
1) 1950-1970s - are characterized by strict control by the management of "Management by Objectives" (Management by Objectives);
2) 1970-1980s - the period of evaluation and comparison of values, the compilation of “value charts” is typical - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s - the influence of competitors is increasing, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, Beat The Competition;
4) 1990s - beginning of XXI in. – “Focus on Processes”.
The most recent developments in management philosophy reflect a growing interest in competition and its analysis. This is due to objective reasons, primarily the variation of the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only the definition and establishment of parameters, final criteria and control over the processes of their achievement. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, meeting the requirements of modernity and the prevailing conditions, switched to how to correctly and quickly get ahead of the competitor's performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. After defining better way management and business management, it is necessary to answer the question: “How to do it better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, as well as mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer in the targeted use of benchmarking was Rank Xerox, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Benchmarking is currently considered one of the most effective areas of consulting. It is becoming more and more popular and earning more and more popularity. Even state institutions, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its foundations to improve their processes and systems, although in Russia this is more common for private organizations.
In Europe, this process is slow, but stable, the popularity of benchmarking remains very moderate. Significant differences in understanding of business processes in different countries hinder its implementation in business processes various areas economy.
Based on benchmarking the idea of comparative activity is put forward not only in relation to competing enterprises, but also to advanced companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where tasks are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all the components of the strategy development system, industry analysis processes and competitor experience analysis. To better understand the methods of benchmarking, you need to determine its relationship with strategic planning.
In order to rationally choose the areas of activity, the size of the required resource base, to create relationships between the areas of its activity, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves a study of the degree and characteristics of competition, customer behavior patterns, the nature of the behavior of suppliers of certain resources, barriers to entry into a market or sector of the economy, mobility and adaptability of production, as well as other specifics. Industry analysis prepares the material for fairly accurate forecasting of potential profits on average for the industry, and also reveals the reasons for the difference of some firms in comparison with others.
You need to start an industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical specifications, low price and etc.). Further, their impact on profitability as a whole and separately is determined.
The next stage is a detailed study of competition. First of all, it is analyzed how important your line of business is for a competitor, that is, how much resources and financial injections it will need to develop these areas. Here it is necessary to assess the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how the competitor allocates available resources, in other words, what he has at the time of entering the market (product, price, distribution and delivery system, marketing, service and customer service system), as well as the costs of his activities. Do not forget about another important factor - this is a similar work of a competitor in the direction of research and development, which positively affects the cost of its products, as well as necessary costs on marketing within a certain period of time.
After identifying the most profitable market segments and evaluating your own competitive advantage you need to choose a "model of imitation". To achieve the most effective results in a short time, benchmarking experts advise not only to find such organizations and accumulate data on their activities, "advanced" management decisions but also to establish contacts with them. After the data is collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next step is to develop a plan, the purpose of which is to achieve the highest efficiency of the changed processes.
After conducting industry and competitor analysis, it is recommended to start developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, reviewing the pricing system, marketing and delivery, marketing, personnel, technology, etc.
Voevodina N. A., Kulagina A. V., Loginova E. Yu., Tolberg V. B.
Benchmarking is a tool for developing competitive advantages
Practical guide
Chapter 1. What is Benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system has, of course, affected all aspects of the public, socio-economic and cultural life of the population, especially business. The bulk of the leaders of Soviet enterprises knew about competition only in general terms from textbooks, the issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans), they could think about increasing profits, as it was supposed, only in bourgeois countries. The low interest in the case was also due to the fact that the enterprises were not the property of the head.
Today, the principles of management, goals and ways to achieve goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service in order to make competent and timely management decisions to improve business efficiency. Marketing services are often engaged in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search for and formation of an optimal, but mobile, product, price, and marketing policy, as well as strategic planning for the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system in market conditions are ensured, taking into account the state of the internal and external environments. Marketing activity is based on the conducted marketing research, as on their basis the development of a strategy and a program of marketing activities is carried out, the use of which will help increase the productivity of the company, maximize the satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making entrepreneurial and marketing decisions, to eliminate or reduce the uncertainty of external and internal conditions for the behavior of subjects of the marketing system. It is almost impossible to avoid risk, but adverse consequences can be predicted, prevented or mitigated in advance. A minimum of uncertainty is what you need to strive for, because it’s not in vain that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problem situations that an organization may encounter in the process of marketing activities. Thus, in order to effectively build the work of an organization, it is not enough for a management or a company to have information only about the internal features of the state of the company and production and economic activities, such an approach is irrelevant and will not stand the test of time. Modern successful businessmen prefer constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its significance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to analyze and draw conclusions, it became necessary to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and directions for the development of marketing and management. Practice has proven that the classical definition of marketing, which implies well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic orientation of marketing, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the "Russian ear" and relatively recently began to be used in Russia, it does not have a literal translation into Russian. The term "benchmarking" comes from the word "benchmark", meaning a mark according to some established criterion (for example, a mark on a sign that prohibits children shorter than it from entering the attraction). We can say that a benchmark is something that has a certain quantity and quality, which can be used as a standard or benchmark when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographical location. Benchmarking is the art of finding or identifying what others do best, and then learning, improving and applying other people's methods of work. It may seem to the layman that there is nothing unusual or new here, that we are talking about the good old, but condemned methods (such as espionage, copying, imitating business or technology). Indeed, like it or not, but you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” have been carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own efficiency. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won a “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning "the effort, concern, concern of the best (leader) to become even better (leader)". In China, when talking about benchmarking, they often recall the rule of the Chinese general Sun Tzu: "When you know your enemy and know yourself, you are not afraid of the result of a hundred wars." At the present stage, the use of benchmarking, thanks to the main principle “from best to best”, leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). PIMS, a research and consulting organization that has studied the impact of marketing strategies on profits, has found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best enterprises that have succeeded in similar conditions.
In 1979, a well-known large American company began the "Competitiveness Benchmarking" project to conduct a complete cost and quality analysis of its own products in comparison with a similar Japanese company. The project was very successful and attracted a lot of attention. Benchmarking after that began to be intensively distributed among specialists in the USA and applied in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to find an exact description of him.
The Center for Productivity and Quality (Bestinghouse) sees benchmarking as an ongoing process of detailed exploration of best practices that can rapidly improve competitive performance.
Chapter 1. What is Benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system has, of course, affected all aspects of the public, socio-economic and cultural life of the population, especially business. The bulk of the leaders of Soviet enterprises knew about competition only in general terms from textbooks, the issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans), they could think about increasing profits, as it was supposed, only in bourgeois countries. The low interest in the case was also due to the fact that the enterprises were not the property of the head.
Today, the principles of management, goals and ways to achieve goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service in order to make competent and timely management decisions to improve business efficiency. Marketing services are often engaged in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search for and formation of an optimal, but mobile, product, price, and marketing policy, as well as strategic planning for the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system in market conditions are ensured, taking into account the state of the internal and external environments. Marketing activity is based on the conducted marketing research, as on their basis the development of a strategy and a program of marketing activities is carried out, the use of which will help increase the productivity of the company, maximize the satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making entrepreneurial and marketing decisions, to eliminate or reduce the uncertainty of external and internal conditions for the behavior of subjects of the marketing system. It is almost impossible to avoid risk, but adverse consequences can be predicted, prevented or mitigated in advance. A minimum of uncertainty is what you need to strive for, because it’s not in vain that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problem situations that an organization may encounter in the process of marketing activities. Thus, in order to effectively build the work of an organization, it is not enough for a management or a company to have information only about the internal features of the state of the company and production and economic activities, such an approach is irrelevant and will not stand the test of time. Modern successful businessmen prefer constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its significance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to analyze and draw conclusions, it became necessary to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and directions for the development of marketing and management. Practice has proven that the classical definition of marketing, which implies well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic orientation of marketing, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the "Russian ear" and relatively recently began to be used in Russia, it does not have a literal translation into Russian. The term "benchmarking" comes from the word "benchmark", meaning a mark according to some established criterion (for example, a mark on a sign that prohibits children shorter than it from entering the attraction). We can say that a benchmark is something that has a certain quantity and quality, which can be used as a standard or benchmark when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographical location. Benchmarking is the art of finding or identifying what others do best, and then learning, improving and applying other people's methods of work. It may seem to the layman that there is nothing unusual or new here, that we are talking about the good old, but condemned methods (such as espionage, copying, imitating business or technology). Indeed, like it or not, but you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” have been carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own efficiency. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won a “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning "the effort, concern, concern of the best (leader) to become even better (leader)". In China, when talking about benchmarking, they often recall the rule of the Chinese general Sun Tzu: "When you know your enemy and know yourself, you are not afraid of the result of a hundred wars." At the present stage, the use of benchmarking, thanks to the main principle “from best to best”, leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). PIMS, a research and consulting organization that has studied the impact of marketing strategies on profits, has found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best enterprises that have succeeded in similar conditions.
In 1979, a well-known large American company began the "Competitiveness Benchmarking" project to conduct a complete cost and quality analysis of its own products in comparison with a similar Japanese company. The project was very successful and attracted a lot of attention. Benchmarking after that began to be intensively distributed among specialists in the USA and applied in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to find an exact description of him.
The Center for Productivity and Quality (Bestinghouse) sees benchmarking as an ongoing process of detailed exploration of best practices that can rapidly improve competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of a competitive analysis, however, the use of benchmarking is more effective because it is a more detailed, formalized and streamlined methodology compared to a competitive analysis method or approach. Benchmarking for today is an essential ingredient for the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking facilitates fast, low-cost identification and prevention of problem situations in logistics systems related to areas close to the buyer, order fulfillment and transportation.
Benchmarking visually reflects where a firm or market can face cost or quality problems, and also shows the organization's place among competitors. He finds and identifies problems in the course of work, concretizing them.
Many experts in economics and marketing are convinced that benchmarking should become a permanent process in the company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and frameworks of management functions, however, the consumer remains the main source of information about products, the market and competitors.
Many firms that use benchmarking are convinced that it contributes to a reliable competitiveness, as well as creating the prerequisites for constantly monitoring the level of company performance in the context of the internationalization of the processes of procurement of raw materials and materials.
Benchmarking experience is also used to define the company's success strategy. Close attention is directed to the following questions: who? as? why? (Which firm has climbed to the top of the competition? Why hasn't their own organization become the best in their field? What can be changed and what needs to be changed in the enterprise to become the best? How to implement the appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. Value-oriented planning, as well as literacy, communication skills, customer service competence, technology and entrepreneurial culture are the most important areas of activity for employees and the company as a whole. Some believe that benchmarking is an activity that is directly related to customers, technology and business culture, as well as being interconnected with planning. In general, benchmarking can be attributed to a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking is the adoption of management methods from other, successfully existing companies and entrepreneurs in order to determine, by comparison with other areas of business activity or competitors, to identify the weaknesses of their organization.
The application of benchmarking consists in a simplified version of four consecutive steps:
1) awareness and analysis of the details of their own business processes.
Ideally, they should be known thoroughly at every stage of production, but it is better to regularly check the “health” of your organization in order to know the weaknesses and try to smooth out all negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, because no one will agree to bring you the secret of your success, always achieved by hard work, both physical and intellectual. Most often, if you do not take into account proprietary technologies, this is a big trade secret that is diligently protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales scheme, formal organization and other things;
3) comparison of the results of their processes with the results of the analyzed firms. Here it is necessary to involve specialists, most often organizations cope on their own;
4) the introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial injections, the involvement of specialists or retraining of its employees, the development of new technologies, the introduction of modern management and decision-making methods. Thus, it is possible to distinguish types of benchmarking. Here are just a few:
1) internal - the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors in the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional - comparison by functions (sales, purchases, etc.).
Benchmarking is never a one-time analysis. In order to have a return, increase the efficiency of the enterprise, it is necessary to make benchmarking an integral part of the work, a regular process of innovation and improvement in your business.
In Japan, benchmarking is popular and has been used there for a long time. Japanese firms have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called "me too", which in some way can be considered an evolution of the Sun Tzu rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: the strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. Predicting the effect that the use of benchmarking can give, it should be remembered that the fact that the exchange of experience and its analysis has never been disputed by anyone has been disputed. However, “one should not scratch everyone one size fits all”, because, although many enterprises and activities or productions are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need for benchmarking must first be justified and proven.
Summing up, we can say that the benefit of benchmarking is that production processes, sales operations and marketing functions become more manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This can be the beginning, a new stage in the development of a profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
To date, a huge number of interpretations of the concept of benchmarking have accumulated. Some believe that it is the product of a consistent development of the concept of competitiveness, others say that benchmarking is a mobile quality improvement algorithm, while still others consider it to be an exotic novelty as a result of Japanese business practice. However, everyone agrees, or more or less agrees, on the definition that benchmarking is the process of finding, identifying, and studying the very best known management and business practices.
1.2. Development and formation of benchmarking
Benchmarking- this is a new word in the highest business circles in Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation of upbringing of the last century and the corresponding hardening confuse it with industrial intelligence or espionage hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since "that man over there in the hut across the street has done much better than the rest of us." The term has been given new interest and interest by business consultants, who are brought in by many firms of all shapes and sizes to teach them how to keep an organization's revenues up to par with those of their peers. Benchmarking in the way it is now has not always been, the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. At the end of the 19th century, the American engineer Frederick Taylor explored the scientific methods of labor organization, which formed the basis of the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a specialist in quality control, in which he reveals the periodization of the stages of management. Yes, he considers four stages of management change, through which the world has passed in the last half of the 20th century:
1) 1950-1970s - are characterized by strict control by the management of "Management by Objectives" (Management by Objectives);
2) 1970-1980s - the period of evaluation and comparison of values, the compilation of “value charts” is typical - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s - the influence of competitors is increasing, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, Beat The Competition;
4) 1990s - the beginning of the XXI century. – “Focus on Processes”.
The most recent developments in management philosophy reflect a growing interest in competition and its analysis. This is due to objective reasons, primarily the variation of the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only the definition and establishment of parameters, final criteria and control over the processes of their achievement. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, meeting the requirements of modernity and the prevailing conditions, switched to how to correctly and quickly get ahead of the competitor's performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. After determining the best way to manage and conduct business, the question must be answered: “How to do it better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, as well as mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer in the targeted use of benchmarking was Rank Xerox, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Benchmarking is currently considered one of the most effective areas of consulting. It is becoming more and more popular and earning more and more popularity. Even government agencies, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its fundamentals to improve their processes and systems, although in Russia this is more common for private organizations.
In Europe, this process is slow, but stable, the popularity of benchmarking remains very moderate. Significant differences in the understanding of business processes in different countries hinder its implementation in business processes in various sectors of the economy.
Based on benchmarking the idea of comparative activity is put forward not only in relation to competing enterprises, but also to advanced companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where tasks are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all the components of the strategy development system, industry analysis processes and competitor experience analysis. To better understand the methods of benchmarking, you need to determine its relationship with strategic planning.
In order to rationally choose the areas of activity, the size of the required resource base, to create relationships between the areas of its activity, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves a study of the degree and characteristics of competition, customer behavior patterns, the nature of the behavior of suppliers of certain resources, barriers to entry into a market or sector of the economy, mobility and adaptability of production, as well as other specifics. Industry analysis prepares the material for fairly accurate forecasting of potential profits on average for the industry, and also reveals the reasons for the difference of some firms in comparison with others.
You need to start an industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical characteristics, low price, etc.). Further, their impact on profitability as a whole and separately is determined.
The next stage is a detailed study of competition. First of all, it is analyzed how important your line of business is for a competitor, that is, how much resources and financial injections it will need to develop these areas. Here it is necessary to assess the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how the competitor allocates available resources, in other words, what he has at the time of entering the market (product, price, distribution and delivery system, marketing, service and customer service system), as well as the costs of his activities. Do not forget about another important factor - this is a similar work of a competitor in the direction of research and development, which positively affects the cost of its products, as well as the necessary marketing costs for a certain period of time.
After identifying the most profitable market segments and evaluating your own competitive advantages, you need to choose a "imitation model". To achieve the most effective results in a short time, benchmarking experts advise not only to find such organizations and accumulate data on their activities, “advanced” management decisions, but also to establish contacts with them. After the data is collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next step is to develop a plan, the purpose of which is to achieve the highest efficiency of the changed processes.
After conducting industry and competitor analysis, it is recommended to start developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, reviewing the pricing system, marketing and delivery, marketing, personnel, technology, etc.
According to the published data of the well-known consulting company Bain & Co, it was over the past two years that benchmarking has become one of the three most common business management methods, but this is typical for large international corporations. Its popularity is based on the fact that it helps to quickly and cost-effectively modernize business processes. It reflects and details the work of leading companies and contributes to the achievement of the same, and perhaps even better results.
Reasons for the growing popularity of benchmarking in modern world are:
1) global competition. In the context of growing international integration and globalization of business, firms are faced with the need for a comprehensive and detailed study and subsequent application of the best achievements of competitors for their own well-being and development;
2) remuneration for quality. Recently, actions, competitions, reviews and tenders held at the national and international levels to identify and reward quality leading organizations have become more widespread and public response. The conditions for participation in such events oblige, in addition to the demonstration by participating firms of the competitive advantages of their products, the mandatory use of the concept of benchmarking in the course of the usual, systematic management of the company;
3) the need to meet modern rapidly changing conditions, adapt to them, as well as the introduction of world achievements in the field of production and business technologies. In order not to be outsmarted by their competitors, all companies (regardless of size and scope) should regularly study the situation in other companies in order to apply best practices in the field of production and business technologies.
In Russia, there are enterprises and organizations that use benchmarking, but so far there are very few of them. On the other hand, management is always encouraged when middle and senior managers enter into everyday life after hours in informal relationships with colleagues or competitors, and then take note and embody the best achievements of each other in their companies. The experience of many organizations, as well as studies, prove that direct communication with colleagues leads to the most valuable innovations for a particular business: ideas and knowledge, which very often leads to successful, quick and easy implementation of new methods and forms of management, more efficient distribution and use resources, etc. But such a model "passes" only in those organizations where the leadership is ready for it. Engaged managers are a huge potential for the development of the company, but the ability to correctly create motivation is the prerogative of management, this also needs to be learned and learned from colleagues.
By level of openness business can be divided into two categories:
1) organizations that profess the principle of secrecy of their activities, carefully concealing absolutely all information about their company;
2) maximum open companies, confident that while all competitors are far behind and by the time they catch up, they will be able to come up with something new. worldwide famous company General Motors has created and made available to everyone access to its database. This is mainly done for suppliers to better plan their production.
The exchange of experience is a thing known to Russian enterprises since the times of the USSR, it is not new, only now it is customary to call it benchmarking in the Western manner. Implementation of benchmarking for any Russian enterprise is usually difficult, which is due to objective reasons (such as old technologies and equipment, lack of young specialists, low economic indicators) - you have to re-educate people, sometimes just explain in detail and in an accessible way why all this is needed. However, the process, if desired, is established quite quickly and clearly. Collection, processing and implementation of new experience are occupied in some way by all departments of the organization.
At the initial stage in the organization concerned, each unit collects information of its profile. Very often sources are open reports of Western and Russian companies, special industry press, an integral part of modernity - the Internet. Information is accumulated (collected) during trips and business trips to Russian and Western companies. Entrepreneurs quite actively attend specialized exhibitions: almost every month, trained employees of the enterprise travel to collect information. All collected information is accumulated and analyzed in a single report, which is intended for the board of directors. Further, the organization's indicators are considered in relation to the industry average, after which it becomes clear which of them the organization is ahead of or behind its competitors. After that, tactics for improving performance are developed. Now, for example, many large Russian factories engaged in increasing labor productivity, the impetus for this was the experience of Volvo, where a specialist from one domestic plant studied management, but later competitors also took advantage of his experience, so it can be useful to “look around”.
In the West, where benchmarking has long been popular, the following practice has been established: a company, actively adopting someone else's experience, certainly shares its own. Most successful businesses publish detailed performance reports and host competitors. Western principle successful work“if you are open, then you are developing” in Russia simply does not work and will not work for a number of objective reasons (for example: an increase in the number of inspections by competent authorities, attracting the attention of tax and other services, and many others).
Current page: 1 (total book has 15 pages) [accessible reading excerpt: 9 pages]
Voevodina N. A., Kulagina A. V., Loginova E. Yu., Tolberg V. B.
Benchmarking is a tool for developing competitive advantages
Practical guide
Chapter 1. What is Benchmarking?
1.1. Benchmarking: concept, goals and objectives
Russia's transition to a new economic system has, of course, affected all aspects of the public, socio-economic and cultural life of the population, especially business. The bulk of the leaders of Soviet enterprises knew about competition only in general terms from textbooks, the issues of increasing production efficiency were never raised at all (except for increasing labor productivity to fulfill plans), they could think about increasing profits, as it was supposed, only in bourgeois countries. The low interest in the case was also due to the fact that the enterprises were not the property of the head.
Today, the principles of management, goals and ways to achieve goals for private enterprises have changed dramatically, therefore, in market conditions, management is increasingly forced to form a marketing service in order to make competent and timely management decisions to improve business efficiency. Marketing services are often engaged in quite a variety of activities, which is determined by the goals and nature of the work. As a rule, this is the development of organizational tactics, the search for and formation of an optimal, but mobile, product, price, and marketing policy, as well as strategic planning for the movement of goods on the market. Marketing activity is one of the most important functions in the field of entrepreneurship. With its help, stable, competitive work and development of a particular subject of the marketing system in market conditions are ensured, taking into account the state of the internal and external environments. Marketing activity is based on the conducted marketing research, as on their basis the development of a strategy and a program of marketing activities is carried out, the use of which will help increase the productivity of the company, maximize the satisfaction of the needs of the consumer or client. The results of marketing research are most important for management, as well as for making entrepreneurial and marketing decisions, to eliminate or reduce the uncertainty of external and internal conditions for the behavior of subjects of the marketing system. It is almost impossible to avoid risk, but adverse consequences can be predicted, prevented or mitigated in advance. A minimum of uncertainty is what you need to strive for, because it’s not in vain that they say: “Forewarned is forearmed.” To reduce risks and uncertainty, it is necessary to find a range of negative possible phenomena, dangers and problem situations that an organization may encounter in the process of marketing activities. Thus, in order to effectively build the work of an organization, it is not enough for a management or a company to have information only about the internal features of the state of the company and production and economic activities, such an approach is irrelevant and will not stand the test of time. Modern successful businessmen prefer constant strategic planning of all production, marketing and commercial activities of the organization, while operational planning does not lose its significance. The effectiveness of planning at each stage largely depends on reliable, representative marketing information. In practice, it turned out that in general it is quite difficult to analyze and draw conclusions, it became necessary to separate the functions of various departments and services and form a specialized service for organizing marketing activities, whose competence primarily includes conducting marketing research and developing marketing programs.
The development of entrepreneurship in Russia went in parallel with significant economic transformations, which created fertile ground for the development of new types of business and production, the use of the latest theories, technologies and directions for the development of marketing and management. Practice has proven that the classical definition of marketing, which implies well-known components: Product, Price, Place, Promotion, is far from exhaustive and not at all sufficient, since it does not reflect the interconnection of the interaction processes of all subjects of the market system. Recently, other areas of modern marketing have appeared and began to be put into practice (interaction marketing, strategic orientation of marketing, etc.), benchmarking has been and remains one of the most effective and popular.
Term "benchmarking"- English, like many modern words related to business and economics, is unusual for the "Russian ear" and relatively recently began to be used in Russia, it does not have a literal translation into Russian. The term "benchmarking" comes from the word "benchmark", meaning a mark according to some established criterion (for example, a mark on a sign that prohibits children shorter than it from entering the attraction). We can say that a benchmark is something that has a certain quantity and quality, which can be used as a standard or benchmark when compared with other objects. Benchmarking is most often a systematic activity aimed at finding, evaluating ways to solve problems, learning from the most suitable examples, and this is never tied to size, business area or geographical location. Benchmarking is the art of finding or identifying what others do best, and then learning, improving and applying other people's methods of work. It may seem to the layman that there is nothing unusual or new here, that we are talking about the good old, but condemned methods (such as espionage, copying, imitating business or technology). Indeed, like it or not, but you will think about it, because entrepreneurs and organizations have always been subjected to espionage, their “recipes for success” have been carefully analyzed and studied, and then used by others. In the West in the late 1960s - early 1970s. some enterprises began to put forward similar theories, which were based on a comparison of the work and productivity not so much of competing enterprises (of course, theirs too), but of advanced organizations (the best, most successful, most productive) from their own and other industries. Entrepreneurs began to learn to find, identify and neutralize differences in the management of enterprises that reduced their own efficiency. The developed concepts and methods made it possible to reduce costs, increase profits and optimize the dynamics of the structure and determine the strategy of the organization.
Benchmarking in developed countries, it has long won a “place in the sun” among entrepreneurs and managers, enjoys their sympathy and is successfully used in the practice of Japanese, American, Western European and Scandinavian businessmen. For a long time it was believed that the birthplace of this term is the United States. Of course, not in its modern form, but benchmarking has been used before. In Japan, benchmarking is close in meaning to the Japanese word dantotsu, meaning "the effort, concern, concern of the best (leader) to become even better (leader)". In China, when talking about benchmarking, they often recall the rule of the Chinese general Sun Tzu: "When you know your enemy and know yourself, you are not afraid of the result of a hundred wars." At the present stage, the use of benchmarking, thanks to the main principle “from best to best”, leads to life and success for many companies in the USA, Japan, and Western Europe. Benchmarking was first used in 1972 at the initiative of the Cambridge Institute for Strategic Planning (USA). PIMS, a research and consulting organization that has studied the impact of marketing strategies on profits, has found that in order to develop effective behavior in a competitive environment, it is necessary to know the experience of the best enterprises that have succeeded in similar conditions.
In 1979, a well-known large American company began the "Competitiveness Benchmarking" project to conduct a complete cost and quality analysis of its own products in comparison with a similar Japanese company. The project was very successful and attracted a lot of attention. Benchmarking after that began to be intensively distributed among specialists in the USA and applied in other organizations: HP, Dupont, Motorola, Chase. It should be noted that benchmarking does not stand still, but is developing dynamically. The body of his knowledge is constantly expanding and growing rapidly, so it is difficult to find an exact description of him.
The Center for Productivity and Quality (Bestinghouse) sees benchmarking as an ongoing process of detailed exploration of best practices that can rapidly improve competitive performance.
For most organizations, benchmarking as such is not new, since it is most often carried out as part of a competitive analysis, however, the use of benchmarking is more effective because it is a more detailed, formalized and streamlined methodology compared to a competitive analysis method or approach. Benchmarking for today is an essential ingredient for the success of any organization.
Benchmarking can be used in a variety of ways. In logistics, for example, benchmarking facilitates fast, low-cost identification and prevention of problem situations in logistics systems related to areas close to the buyer, order fulfillment and transportation.
Benchmarking visually reflects where a firm or market can face cost or quality problems, and also shows the organization's place among competitors. He finds and identifies problems in the course of work, concretizing them.
Many experts in economics and marketing are convinced that benchmarking should become a permanent process in the company. Within the framework of benchmarking, entrepreneurial functions are considered from the standpoint of improving processes aimed at creating a product or service and promoting them to the market. The use of benchmarking as a component implies the development of a strategy, boundaries and frameworks of management functions, however, the consumer remains the main source of information about products, the market and competitors.
Many firms that use benchmarking are convinced that it contributes to a reliable competitiveness, as well as creating the prerequisites for constantly monitoring the level of company performance in the context of the internationalization of the processes of procurement of raw materials and materials.
Benchmarking experience is also used to define the company's success strategy. Close attention is directed to the following questions: who? as? why? (Which firm has climbed to the top of the competition? Why hasn't their own organization become the best in their field? What can be changed and what needs to be changed in the enterprise to become the best? How to implement the appropriate strategy to get ahead?).
When benchmarking is used in a company, employees are divided into teams consisting of representatives of different services and departments. Value-oriented planning, as well as literacy, communication skills, customer service competence, technology and entrepreneurial culture are the most important areas of activity for employees and the company as a whole. Some believe that benchmarking is an activity that is directly related to customers, technology and business culture, as well as being interconnected with planning. In general, benchmarking can be attributed to a set of management tools (from global quality management to assessing customer satisfaction with goods or services produced by a given organization).
However, the vast majority of experts agree that benchmarking is the adoption of management methods from other, successfully existing companies and entrepreneurs in order to determine, by comparison with other areas of business activity or competitors, to identify the weaknesses of their organization.
The application of benchmarking consists in a simplified version of four consecutive steps:
1) awareness and analysis of the details of their own business processes.
Ideally, they should be known thoroughly at every stage of production, but it is better to regularly check the “health” of your organization in order to know the weaknesses and try to smooth out all negative internal and external influences;
2) analysis of business processes of other companies. Here, as they say, all means are good, because no one will agree to bring you the secret of your success, always achieved by hard work, both physical and intellectual. Most often, if you do not take into account proprietary technologies, this is a big trade secret that is diligently protected from competitors. But it is always possible to analyze the dynamics of specific economic indicators, track the sales scheme, formal organization and other things;
3) comparison of the results of their processes with the results of the analyzed firms. Here it is necessary to involve specialists, most often organizations cope on their own;
4) the introduction of qualitative and (or) quantitative changes to overcome the gap. This action is the most difficult, since it almost always requires financial injections, the involvement of specialists or retraining of its employees, the development of new technologies, the introduction of modern management and decision-making methods. Thus, it is possible to distinguish types of benchmarking. Here are just a few:
1) internal - the activities of divisions within the company are subject to comparison;
2) competitive - comparing your organization with competitors in the maximum number of parameters;
3) general - comparison of the company with indirect competitors according to certain indicators of interest;
4) functional - comparison by functions (sales, purchases, etc.).
Benchmarking is never a one-time analysis. In order to have a return, increase the efficiency of the enterprise, it is necessary to make benchmarking an integral part of the work, a regular process of innovation and improvement in your business.
In Japan, benchmarking is popular and has been used there for a long time. Japanese firms have chosen the most suitable form for themselves - product benchmarking, which is now widespread. Product benchmarking is based on a psychology called "me too", which in some way can be considered an evolution of the Sun Tzu rule. Less popular is benchmarking of functions and processes.
If we consider benchmarking as learning based on comparison, then it is based on two levels: the strategic and the level of individual processes.
The essence of benchmarking proves that it can be treated as a direction of marketing research. Predicting the effect that the use of benchmarking can give, it should be remembered that the fact that the exchange of experience and its analysis has never been disputed by anyone has been disputed. However, “one should not scratch everyone one size fits all”, because, although many enterprises and activities or productions are similar, each of them has its own specifics, internal reserves and potential, which can vary significantly.
Therefore, the need for benchmarking must first be justified and proven.
Summing up, we can say that the benefit of benchmarking is that production processes, sales operations and marketing functions become more manageable if the best practices, methods and technologies of the most successful enterprises or industries are analyzed and implemented in their organization. This can be the beginning, a new stage in the development of a profitable business with high resource savings, the creation of healthy competition and the greatest satisfaction of customer needs.
To date, a huge number of interpretations of the concept of benchmarking have accumulated. Some believe that it is the product of a consistent development of the concept of competitiveness, others say that benchmarking is a mobile quality improvement algorithm, while still others consider it to be an exotic novelty as a result of Japanese business practice. However, everyone agrees, or more or less agrees, on the definition that benchmarking is the process of finding, identifying, and studying the very best known management and business practices.
1.2. Development and formation of benchmarking
Benchmarking- this is a new word in the highest business circles in Russia. In our country, many entrepreneurs are still wary of this concept, and conservative-minded representatives of the older generation of upbringing of the last century and the corresponding hardening confuse it with industrial intelligence or espionage hidden under newfangled buzzwords. However, as already noted, benchmarking was not invented yesterday or even today.
Benchmarking has been going hand in hand with us ever since "that man over there in the hut across the street has done much better than the rest of us." The term has been given new interest and interest by business consultants, who are brought in by many firms of all shapes and sizes to teach them how to keep an organization's revenues up to par with those of their peers. Benchmarking in the way it is now has not always been, the modern version was developed in the USA in the 1970s, but its basic concepts were in demand much earlier. At the end of the 19th century, the American engineer Frederick Taylor explored the scientific methods of labor organization, which formed the basis of the concept of benchmarking.
There is also a theory by Bernardo de Sousa, a specialist in quality control, in which he reveals the periodization of the stages of management. Yes, he considers four stages of management change, through which the world has passed in the last half of the 20th century:
1) 1950-1970s - are characterized by strict control by the management of "Management by Objectives" (Management by Objectives);
2) 1970-1980s - the period of evaluation and comparison of values, the compilation of “value charts” is typical - (“dogs”, “money cows”, “niches” and “rising stars”) (The Value Chart);
3) 1980-1990s - the influence of competitors is increasing, it is competition that serves as a catalyst for the desire for improvements, transformations, innovations, Beat The Competition;
4) 1990s - the beginning of the XXI century. – “Focus on Processes”.
The most recent developments in management philosophy reflect a growing interest in competition and its analysis. This is due to objective reasons, primarily the variation of the competitive environment, as well as changes in the needs and interests of consumers, the emergence of new technologies, materials, etc. In the 1950s. demand was greater than supply, so the main tasks of management were only the definition and establishment of parameters, final criteria and control over the processes of their achievement. However, later many countries faced crises of overproduction, and in the 1990s. supply significantly exceeded demand, so management, meeting the requirements of modernity and the prevailing conditions, switched to how to correctly and quickly get ahead of the competitor's performance in the production and marketing processes.
As follows from the definition of benchmarking, its goal is to find the most effective business activity. After determining the best way to manage and conduct business, the question must be answered: “How to do it better?” At this stage, you can use all available means, experience, imagination, use the services of specialists, as well as mobilize the work of your own departments and services (planning, marketing, etc.).
The pioneer in the targeted use of benchmarking was Rank Xerox, which at that time was in a severe crisis. This company conducted a study of the costs and quality of its own products in comparison with competitors. A detailed study of the experience of other companies, its adaptation and use led Xerox to success and prosperity.
Benchmarking is currently considered one of the most effective areas of consulting. It is becoming more and more popular and earning more and more popularity. Even government agencies, hospitals and universities are beginning to understand and adopt the benefits of benchmarking in order to apply its fundamentals to improve their processes and systems, although in Russia this is more common for private organizations.
In Europe, this process is slow, but stable, the popularity of benchmarking remains very moderate. Significant differences in the understanding of business processes in different countries hinder its implementation in business processes in various sectors of the economy.
Based on benchmarking the idea of comparative activity is put forward not only in relation to competing enterprises, but also to advanced companies in other industries. In fact, benchmarking is an alternative method of strategic planning, where tasks are determined not from what has been achieved, but from the analyzed indicators of competitors. Benchmarking technology allows you to combine all the components of the strategy development system, industry analysis processes and competitor experience analysis. To better understand the methods of benchmarking, you need to determine its relationship with strategic planning.
In order to rationally choose the areas of activity, the size of the required resource base, to create relationships between the areas of its activity, the organization must clearly understand the strategic features of its industry. Therefore, industry analysis is the initial step in developing a strategy. It involves a study of the degree and characteristics of competition, customer behavior patterns, the nature of the behavior of suppliers of certain resources, barriers to entry into a market or sector of the economy, mobility and adaptability of production, as well as other specifics. Industry analysis prepares the material for fairly accurate forecasting of potential profits on average for the industry, and also reveals the reasons for the difference of some firms in comparison with others.
You need to start an industry analysis with answers to questions such as: how profitable is this industry now, are there any prospects and what are they for the near future, what determines success in this area? The market is divided into areas (niches) according to the most profitable sectors, then success factors are determined (sales system, exclusive packaging, new technical characteristics, low price, etc.). Further, their impact on profitability as a whole and separately is determined.
The next stage is a detailed study of competition. First of all, it is analyzed how important your line of business is for a competitor, that is, how much resources and financial injections it will need to develop these areas. Here it is necessary to assess the financial strength of a competitor, at least approximately, this is necessary to determine the balance of priorities in the sector of your competition with him.
It is important to find out how the competitor allocates available resources, in other words, what he has at the time of entering the market (product, price, distribution and delivery system, marketing, service and customer service system), as well as the costs of his activities. Do not forget about another important factor - this is a similar work of a competitor in the direction of research and development, which positively affects the cost of its products, as well as the necessary marketing costs for a certain period of time.
After identifying the most profitable market segments and evaluating your own competitive advantages, you need to choose a "imitation model". To achieve the most effective results in a short time, benchmarking experts advise not only to find such organizations and accumulate data on their activities, “advanced” management decisions, but also to establish contacts with them. After the data is collected, analyzed and classified, the possibility of achieving the goal and the factors influencing the result are assessed. The next step is to develop a plan, the purpose of which is to achieve the highest efficiency of the changed processes.
After conducting industry and competitor analysis, it is recommended to start developing a strategy that should contain thoughtful real ways to bypass competitors based on key success factors in various functional areas, such as expanding production, introducing new technologies, updating the product range, reviewing the pricing system, marketing and delivery, marketing, personnel, technology, etc.
According to the published data of the well-known consulting company Bain & Co, it was over the past two years that benchmarking has become one of the three most common business management methods, but this is typical for large international corporations. Its popularity is based on the fact that it helps to quickly and cost-effectively modernize business processes. It reflects and details the work of leading companies and contributes to the achievement of the same, and perhaps even better results.
Reasons for the growing popularity of benchmarking in the modern world are:
1) global competition. In the context of growing international integration and globalization of business, firms are faced with the need for a comprehensive and detailed study and subsequent application of the best achievements of competitors for their own well-being and development;
2) remuneration for quality. Recently, actions, competitions, reviews and tenders held at the national and international levels to identify and reward quality leading organizations have become more widespread and public response. The conditions for participation in such events oblige, in addition to the demonstration by participating firms of the competitive advantages of their products, the mandatory use of the concept of benchmarking in the course of the usual, systematic management of the company;
3) the need to meet modern rapidly changing conditions, adapt to them, as well as the introduction of world achievements in the field of production and business technologies. In order not to be outsmarted by their competitors, all companies (regardless of size and scope) should regularly study the situation in other companies in order to apply best practices in the field of production and business technologies.
In Russia, there are enterprises and organizations that use benchmarking, but so far there are very few of them. But management is always encouraged when middle and top managers enter into informal relationships with colleagues or competitors in everyday life outside of work hours, and then take note and embody each other's best achievements in their companies. The experience of many organizations, as well as studies, prove that direct communication with colleagues leads to the most valuable innovations for a particular business: ideas and knowledge, which very often leads to successful, quick and easy implementation of new methods and forms of management, more efficient distribution and use resources, etc. But such a model "passes" only in those organizations where the leadership is ready for it. Engaged managers are a huge potential for the development of the company, but the ability to correctly create motivation is the prerogative of management, this also needs to be learned and learned from colleagues.
By level of openness business can be divided into two categories:
1) organizations that profess the principle of secrecy of their activities, carefully concealing absolutely all information about their company;
2) companies that are as open as possible, confident that while all competitors are far behind and by the time they catch up, they will be able to come up with something new. The world-famous company General Motors has created and made available to everyone access to its database. This is mainly done for suppliers to better plan their production.
The exchange of experience is a thing known to Russian enterprises since the times of the USSR, it is not new, only now it is customary to call it benchmarking in the Western manner. The implementation of benchmarking for any Russian enterprise is usually difficult, which is due to objective reasons (such as old technologies and equipment, a lack of young specialists, low economic indicators) - people have to be re-trained, sometimes they simply explain in detail and in an accessible way why all this is needed. However, the process, if desired, is established quite quickly and clearly. Collection, processing and implementation of new experience are occupied in some way by all departments of the organization.
At the initial stage in the organization concerned, each unit collects information of its profile. Very often sources are open reports of Western and Russian companies, special industry press, an integral part of modernity is the Internet. Information is accumulated (collected) during trips and business trips to Russian and Western companies. Entrepreneurs quite actively attend specialized exhibitions: almost every month, trained employees of the enterprise travel to collect information. All collected information is accumulated and analyzed in a single report, which is intended for the board of directors. Further, the organization's indicators are considered in relation to the industry average, after which it becomes clear which of them the organization is ahead of or behind its competitors. After that, tactics for improving performance are developed. Now, for example, many large Russian factories are engaged in increasing labor productivity, the impetus for this was the experience of Volvo, where a specialist from one domestic plant studied management, but later competitors also took advantage of his experience, so it can be useful to “look around”.
In the West, where benchmarking has long been popular, the following practice has been established: a company, actively adopting someone else's experience, certainly shares its own. Most successful businesses publish detailed performance reports and host competitors. The Western principle of successful work “if you are open, then you are developing” in Russia simply does not work and will not work for a number of objective reasons (for example: an increase in the number of inspections by competent authorities, attracting the attention of tax and other services, and many others).
Economic sciences/2.Marketing and management
Student Boychenko Mikhail Alexandrovich
National Technical University of Ukraine "Kyiv Polytechnic Institute"
Department of Industrial Marketing
Benchmarkingas a tool for developing competitive advantages
Benchmarking is the new buzzword in management circles. AT Ukraine this concept is still treated with caution, fearing that the concept of benchmarking is hiding behind industrial intelligence. However, benchmarking was not invented yesterday or today.
Benchmarking as we know it today was developed in the US in the 1970s, but its basic concepts were known much earlier. Research into the scientific methods of work organization was carried out by Frederick Taylor at the end of the nineteenth century. They can also be considered the foundations of the concept of benchmarking.
The term "benchmarking" itself comes from English word benchmark ("reference point", "notch"). In the most general sense, a benchmark is something that has a certain quantity, quality, and ability to be used as a benchmark when compared with other items. Benchmarking is a systematic activity aimed at finding, evaluating and learning from best examples business.
The most recent changes in management philosophy indicate an increased focus on competition. Changes in management philosophy over time reflect the changing competitive environment. In the 1950s, when demand was greater than supply, management's task was only to set end criteria and track the process of achieving them. However, already in the nineties, supply significantly exceeded demand, and management began to think about how to get ahead of the competitor's performance in production and marketing "processes".
Benchmarking may seem similar to competitive analysis, although in reality it is more detailed, formalized and streamlined,thancompetitive analysis approach (Table 1).The essence of todaythinterpretationandbenchmarking - the continuous systematic search and implementation of best practices that will lead the organization to a better form.
tablesa 1. ComparisonPaboutincomeaboutto the benchmarkandngaandcompetitive anal andha
|
Process characteristics sa |
analandw competitoraboutin |
Benchmarkandng |
|
Common goal |
Competitor strategy analysis |
Analysis of why and how competitors or leading companies do |
|
Subject of study |
Strategies and competitors |
Business methods that meet the needs of buyers |
|
Object of study |
Products and markets |
Methodology, process sy veden and i b and znes a |
|
Main restrictions |
Activities in the market |
neo limited |
|
The Importance of Acceptance solutions |
Certain |
Very big |
|
Main sources of information |
Industry Experts & Anal & Tiki |
Enterprises - leaders in the industry, outside the industry, competitors, in internal divisions |
The purpose of benchmarking is to find a business that is doing better than you. But this is not enough: after finding the best way to manage and conduct business, you will still have to find the answer to the question "how to do it better?" on your own.
This method was first developed in 1972 to evaluate business performance by the Institute for Strategic Planning in Cambridge (USA). For the first time, Rank Xerox began purposefully using benchmarking at the time of a severe crisis in 1979 to analyze the costs and quality of its own products compared to Japanese ones. Benchmarking is currently considered the most effective area of consulting.
The application of benchmarking consists of four consecutive steps:
1. Understanding the details of your own business processes.
2. Analysis of business processes of other companies.
3. Comparison of the results of their processes with the results of the analyzed companies.
4. Implement the necessary changes to reduce the gap.
Oh here and allocate several types of benchmarking activities:
internal - comparison of work of divisions of the company;
competitive - comparison of your enterprise with competitors in various parameters;
· general - comparison of the company with indirect competitors according to the selected parameters;
functional - comparison by function (sales, purchases, etc.).
· joint - performed in cooperation between groups of companies
They differ in the complexity of the tasks that are set (simple and complex), in direction (internal and external), in the level at which benchmarking is supposed to be carried out (strategic and operational) . How a company uses benchmarking depends on its goals, its stage of development and the state of the industry, that is, its main competitors.
Benchmarking cannot be a one-time analysis. To get the benefit from this process, you need to make it an integral part of your business innovation and improvement process.
In recent years, organizations such as government agencies, universities have also begun to discover the benefits of benchmarking and apply its basic postulates to improve their processes and systems.
In Europe, the use and popularity of benchmarking is still very moderate. Significant differences in the understanding of business processes in different countries significantly slow down its implementation in business processes in various sectors of the economy.
In fact, benchmarking is an alternative method of strategic planning, in which tasks are determined not on the basis of what has been achieved, but on the basis of an analysis of competitors' performance. Benchmarking technology combines strategy development, industry analysis and competitor analysis into a single system. To understand the methods of benchmarking, it is necessary to determine its relationship with strategic planning.
In order to select lines of business, allocate resources, and seek links between lines of business, a company must understand the strategic characteristics of its industry. That's why industry analysis - the first step in developing a strategy. It includes studying the degree and nature of competition, customer behavior patterns and purchasing power, supplier behavior patterns, barriers to entry into the industry, threats to substitute products and services, and other features. Industry analysis provides insight into the earnings potential of an industry average and helps identify the reasons why some companies outperform others.
Starting an industry analysis, it is necessary to answer questions about how profitable the industry is now and what are its prospects in the near future, what are the key success factors. The market is segmented into the most profitable sectors, then the success factors are highlighted (it can be a sales system, low price, etc.). Then it is determined how the key ones differ from each other in terms of their impact on profitability.
The next stage is competition analysis. First of all, it should be analyzed what attention the competitor pays to your business areas, that is, how much resources he will spend on the development of these areas. Here you need to understand the overall financial strength of a competitor and the relationship of his priorities in the field of your competition with him.
After you have figured out the most profitable market segments and assessed your competitive advantages, you need to choose an object to “imitate”. To achieve the most effective result in benchmarking, experts recommend not only finding such enterprises and accumulating information about their activities, progressive management decisions, but also establishing contacts with them. After the information is collected and classified, the degree of achievement of the goal and the factors that determine the result are assessed. Well, then a plan is developed. Its purpose is obvious: to ensure that the processes being changed achieve the highest efficiency.
Having decided on industry and competitor analysis,you can startto strategy development. Actually necessary answer the question of how a company can beat competitors using key success factors in the context of various functional areas: expansion of production, introduction of new products and services, changes in pricing, sales and delivery, marketing, personnel, technologies, etc.
Thus, most businesses use "benchmarking" as one of the means by which they remain competitive. But there are a large number of "traps" that organizations fall into when they first use the concept of benchmarking to increase their competitiveness.
The main mistakes that are often found in the practice of organizations when using the benchmarking approach are:
1. The perception of benchmarking as an "inspection check" of the functioning of the enterprise.
2. Assumption that the existing and approved "baseline" can be used without modification.
3. Decreased focus on service and customer satisfaction.
4. Set yourself tasks that have too blurred boundaries and formulations.
5. Inconsistency.
6. The process is too large and complex to be manageable.
7. Insufficient benchmarking partner studyy.
8. Lack of grounds for benchmarking.
Key benefits of benchmarking:
· Improving work efficiency.
· Reducing the cost of own developments (strategies and processes) by copying and refining others.
· In partnership benchmarking - establishing a trusting relationship between partner companies.
· Continuous improvement of the company's activities by systematically comparing the elements of the activity with similar elements of more successful activities at the macro and micro levels.
Thus, benchmarking can be considered as one of the most importantareas of strategically oriented marketing research.The benefit of benchmarking is that production and marketing s e features become most manageable when researched and promotedat your own enterprise, the best methods and technologies of others, not your ownbusinesses or industries. This can lead to profitableentrepreneurship with high profitability, the creation of usefulcompetition and customer satisfaction.
Literature:
1. Balabanov I. T. Innovative management. Forecasting. Reengineering. Benchmarking. Publisher: Peter, 2001
2. Voevodina N.A.R. Raider. Benchmarking as a tool for determining a strategy and increasing profits. Publisher: RIA "Standards and Quality", 2006
3. Robert Camp. Legal industrial espionage. Business Process Benchmarking: Search Technologies and Implementation best practices the work of your competitors. Publisher: Balance-Club, 2004
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