Bench marking is setting some standard to the level of products and services being produced or offered to customers while still minimizing costs. The role of benchmarking is providing a reference point. The discipline of bench marking is focused on analyzing, identifying, studying and adopting best practices in an organization like customer satisfaction, product quality, throughput and implementing the findings. Performance measurement is the regular collection, reporting and analyses of resources used, work produced and whether the specific intended objectives were realized. Performance measurement is usually based on set goals and expected obligations against the outcome. There is a clear difference between a Performance Measure and a 'Benchmark'. The former provides a continuing measure of productivity, cost efficiency, operating excellence or level of quality and service delivery. A Benchmark on the other hand is a point of reference or target. In order to bench mark, the management needs to understand the needs and potential of the organization through its budget mostly and to avoid chasing the target while not accomplishing goals. It’s therefore clear that after setting the benchmark, the performance measures come in place to evaluate how the business did. Performance measurement is something that is done periodically over time to determine whether the business is working towards its goals.
In building a performance measurement system, one should take into account the four principles; Principle one; Establish broad goals to help in decision making;- review the organization strategic plan. The goals should be developed after an assessment of community conditions, a review of all applicable plans, and a review of internal operations.
Principle two, Develop approaches to achieve these goals. Set specific strategies, plans and guidelines on how the goals will be realized.
Principle three, Develop a budget that approaches to achieve the goals. Putting into consideration the constraints of an organization, one formulates a working budget that will realize the expected performance level intended.
Principle four, evaluate performance. Budgets, policies, and plans might or be changed if need be for the organization to realize its goals based on how the organization did. Gradual changes based on performance are more effective and efficient than an all together turnaround change (Alan Probst, 2009, P. 10,11),
Once the performance between the firm and the set standard are measured and the benchmark has been determined, the next step is to find out the resources that will get the firm going towards its goals. These are called the enablers of the firm (Gillen, 2001).. Enablers, which are practices, processes or methods, are the means by which superior performance is achieved.
There is the need of managing these enables and this is how operation management comes in. We will look at Woolworths, a company that branded itself in selling of food stuff and...