Benchmarking is a logical structured approach to searching for best practice. It provides strategic data and information that can be compared to similar information from other organisations. Benchamrking are of four types product benchmarking, functional or process benchmarking, best practices benchmarking and strategic benchmarking.
Product benchmarking has been prt of the practice of competitive evaluation for many years. Process benchmarking emphasis on comparsion of a functional process like order entry, assembly, set up activities. It is the nature of the process requires persmission of the organisation being benchmarked, ifit is to be effective.
Best practices benchmarking extends functional benchmarking by directing management focus on management practices as well as the elements of the functional processes . Main purpose is to understand the philosophy and practices which enable good processes to perform exceptionally.
Strategic benchmarking starts with the proposition that unless the strategic direction of the targeted benchmark organisation is known it is unlikely that the exercie will prove to be successful.