Benchmarking gap worksheet

What benchmarking is

Benchmarking is comparing your processes and results with those of organizations that do them best, and learning how they do it. The numbers show how big the gap is. The practices show why, and those are what you can act on. A benchmarking study that ends with a table of gaps and no practices has measured the problem without learning anything.

Types of benchmarking

• Internal: another site or unit of your own organization. Data is easy to get; the best practice may not be inside.
• Competitive: a direct competitor. Highly relevant, but data is hard to get and legal limits apply.
• Functional: the same function in another industry, such as order fulfillment at a distributor compared with a manufacturer's spare parts.
• Generic: a process that is the same in any business, such as invoicing or hiring.
• Collaborative: a group of organizations sharing data, often through a benchmarking network or association.

The figures

For each measure, choose whether higher or lower is better. Then:

• Gap = benchmark − own when higher is better, or own − benchmark when lower is better. Positive means the partner is better; negative means you lead.
• Improve by = gap ÷ |own| × 100: how much you must improve, as a share of where you are now.
• Of benchmark = own ÷ benchmark × 100 when higher is better, or benchmark ÷ own × 100 when lower is better: your performance as a share of the partner's. 100% means equal.
• Target closes = (target − own) ÷ (benchmark − own) × 100: how much of the gap your target would close.

The same lead time of 6.5 days against 1.5 days reads as "improve by 77%" and "23% of the benchmark". Both are correct; they answer different questions.

Comparing like with like

A gap is only real if both sides measure the same thing in the same way over the same period. Lead time from order entry or from payment? Accuracy by line or by order? Agree definitions with the partner before acting on the numbers. Then, for each practice, judge whether it transfers: volumes, products, systems and culture differ. Most practices need adapting, and some do not fit.

Benchmarking is one way to set the goals for an improvement project; the project charter is where they go next.

On the exam

CQPA II.C.3 asks you to define benchmarking and describe how it supports best practices. CQE I.B.2.a covers benchmarking as a deployment technique for the quality system. CSSBB II.B asks you to distinguish types of benchmarking and to select measures and performance goals from benchmarking, and CSSBB VI.D.1 covers gap analysis between current and future states. CSQP V.A.4 includes benchmarking in supplier development.

Common questions

What is benchmarking and gap analysis?

Benchmarking compares your performance and practices with a better-performing partner. Gap analysis measures the difference on each measure and asks which practices explain it, so the result is a plan to adapt those practices rather than just a scorecard.

How do you calculate the gap?

Gap = benchmark − your value (or the reverse when lower is better). This worksheet also gives % to improve (gap ÷ your value) and % of benchmark (your value ÷ benchmark) and shows how far your targets close the gap.

What are the types of benchmarking?

Internal (another site or team in your own organization), competitive (a direct competitor), functional (the same process in another industry) and generic (a best-in-class process anywhere). Functional benchmarking is often the most useful, because partners are willing to share.

Other tools and templates