Many companies have selected a demonstrated standard of products, services, cost

Question

Many companies have selected a demonstrated standard of products, services, costs, or practices that represent the very best performance for processes or activities very similar to those of your own company. Do you think this is an effective practice for all companies? Explain in detail. If your company is benchmarking, what should you do if you have limited resources to implement the practices? Explain why doubling the capacity of a bottleneck may not double the system capacity, and relate your answer to a specific example from your present or past work environments.

Explanation / Answer

This process is called Benchmarking. Yes this is an effective practise for all companies. Benefits of benchmarking are :-

Benchmarking helps you identify the gaps and helps to improve the areas where gaps exists. This will result in better efficiency, lower cost and resources and better quality. If the company does not have the resources to implement the changes, then company should analyse the benefits against the cost that will be incurred for executing the revised plan basis benchmarking. and those steps for whcih resources are available can be implemented to save cost and increase resources.

There could be a point in the process where the capacity is less than that of the point where you just doubled ie. the bottleneck. In that case, you would not double the system capacity. The system capacity would only double if the bottleneck whose capacity you doubled remained the slowest point in the system.

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