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Productivity Benchmarks And the Process of Benchmarking


















Companies in different industries may have different productivity benchmarks. The
productivity benchmark of companies belonging to the same industry may even have subtle
differences in their productivity benchmarks.

In its basic economic definition, productivity is the ratio of output to input. In most cases, it
entails to production and processes.  Mostly, the output refers to the product or service in
production while the inputs are the resources used for conversion process.

Benchmark, on the other hand, is the standard by which all items are compared and
measured. The benchmark of one industry can be different from that of another industry,
which can be attributed mostly to the differences in products or services.

Productivity benchmark may then refer to the standard in comparing the productivity of an
enterprise to its performance.  It may also refer to the standard used as a measure of
productivity.

For coming up with a productivity benchmark, it is important for companies to make internal
evaluation and assessment of its past and current performances. Each department can have
its own productivity benchmark. But in order to have a standard in basing its productivity, it is
only good for companies to make thorough scanning and evaluation of performances from
the past, as well as to have realistic forecast.

Companies may also have to consider the asset size and number of employees in devising
productivity benchmarks. They may also have to see different areas, such as marketing,
finance, and production facilities for coming up with written benchmarks.

The process of devising a productivity benchmark involves different areas and factors. There
is also an involvement of planning and monitoring of results.

It is important to collect and collate information from different means and areas of interests,
such as surveys, industry information, interviews, publications, and other sources of
information for analysis and evaluation. In this manner, there is a possibility for an entity to
have a clear productivity benchmark as basis for its performance, or the performance of its
organization and production process.  In order to develop productivity benchmarks, an entity
may have to employ the benchmarking process.

There are various forms of benchmarking that entities can apply. Internal benchmarking
makes a comparison on the processes and practices of different departments within the
organization. Competitive benchmarking involves contrasting the processes of companies
with their direct competitors.

Functional benchmarking compares the practices and processes of other industries, while
generic benchmarking entails investigation of activities occurred in most businesses.

Benchmarking normally involves the comparison of practices and processes. It can be seen
as a strategy of entities to know the moves and practices of their competitors and of other
industries to be aware of the things that should be done, as well as to have the reason for
emulation when the practices and processes of other competitors and in other industries
seem suitable.

Benchmarking can be useful for an entity to develop its productivity benchmark. Productivity
benchmark may be seen as a target, in its most basic sense. Mostly, this is set by companies
pioneering in a certain industry. It would be on the discretion of other companies to emulate
or to make their own benchmarks for productivity.

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