Definition
The stick is not necessarily a competitor of the industry by establishing internal excellence expectations by direct comparison with the "best".
In detail
Benchmarking is a method of establishing internal excellence expectations by directly comparing with 'best' practices or performance. The benchmark need not be a competitor in the same industry; it can be an excellent process from another industry. In the management system, it addresses the problem of 'lack of basis for goal setting' by identifying gaps and best practices, providing direction and quantitative standards for improvement. Unlike performance appraisal, benchmarking focuses more on external reference and process learning rather than internal goal decomposition. It typically outputs benchmarking analysis reports, gap lists, improvement targets, and reference practice cases.
Example in practice
A logistics company's warehouse sorting efficiency had long been below industry average, but internally there was no direction for improvement. Management decided to conduct benchmarking: they selected an e-commerce warehousing company known for efficient sorting as a benchmark and studied its layout, equipment, and processes. Through comparison, they identified significant gaps in their own goods placement and route planning. Subsequently, they borrowed benchmark practices, redesigned the sorting area layout, and introduced dynamic route optimization. After implementation, sorting efficiency significantly improved, and the team learned to view internal processes from an external perspective.