Benchmarking can be done internally or externally, and provides a comparative view of organizational performance, product quality or customer satisfaction. This data is particularly relevant to implementing a lean Six Sigma plan as it illustrates a company, process or product within context.

Measurable comparisons tend to be more relevant and useful within a lean Six Sigma context. This data sets a specific target for process improvement efforts relevant to either a production or service environment.

Benchmarking also includes a psychological factor. The benchmarked figure, whether it is the number of defect-free units produced by a competitor or the amount of downtime saved by properly maintained equipment in-house, demonstrates what is possible given the right circumstances. This information can be highly motivating for lean Six Sigma process improvement efforts.

Benchmarking Data

Because benchmarking measurements may be done internally or externally, there are a number of possible sources upon which to rely.

Commonly used sources include :

  • Company Tours – For externally-focused benchmarking, touring the facilities of successful companies can be quite illuminating. Performance measurements are often shared during such tours, and others can be calculated with some degree of accuracy from observations
  • Corporate Publications – This is another helpful source for external benchmarking efforts. A typical corporate publication often includes relevant employment, production or financial data.
  • Industry Publications – Featured corporations are standard fare for industry or trade related publications. These articles often discuss performance metrics or process techniques. This information is particularly accessible, and a great deal of missing information can be extrapolated from the details of any feature article.
  • Third Party Study – One of the greatest challenges facing an internal benchmarking process is maintaining objectivity. If the evaluator has a stake in the final outcome, the accuracy of data gathered may come into question. Bringing in an external consultant can prove an effective way to generate relevant benchmarking data.
  • Benchmarking Reference Materials – A wealth of information has been published on the benchmarking process. These books often include informative case studies as well as advise for managing the process.
  • Public Financial Records – Financial reporting of publicly traded companies provide numerous financial benchmarks for externally-focused studies. This information is readily available in the form of annual reports, for example.
  • Product tear-downs – Highly relevant product information is available by taking apart a competitor’s product. By disassembling the unit, it is possible to make cost and quality comparisons with surprising accuracy.