Benchmarking: How to learn from best‐in‐class practices

Abstract Benchmarking—the process of measuring a company's current business operations and comparing them to those of best‐practices companies—has emerged in recent years as an important tool in total quality management (TQM) programs across the United States. A 1991 survey found that benchmarking is increasing and that this trend is expected to continue. It has been estimated that three quarters of the Fortune 500 are engaged in the practice. Still, most companies have not instituted benchmarking and do not know how to go about it. This article explores the benchmarking process and its benefits and outlines the steps that companies can take if they wish to establish benchmarking in their own firms. The specific experiences of three companies that have recently embraced benchmarking—Life Technologies Inc., ICI Films, and Caterpillar Inc.—are discussed. It is hoped that their enthusiastic commitment will illustrate the value of benchmarking to the many firms that have yet to adopt the process.