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Benchmarking Types Explained

Benchmarking compares your processes or products against a reference point to find improvement opportunities. There are four recognized types, each suited to different situations.

The four types

Type	Comparison target	Example
Internal	Other departments or plants within the same organization	Plant A compares its changeover time to Plant B
Competitive	Direct competitors in the same industry	Automotive OEM comparing warranty rates to rivals
Functional	Best-in-class performers in the same function, any industry	Hospital comparing patient check-in speed to hotel check-in
Collaborative	Non-competing companies sharing practices voluntarily	Utilities consortium sharing safety metrics

The benchmarking process (Xerox model)

1. Identify what to benchmark
2. Identify comparison partners
3. Collect data
4. Analyze the gap
5. Establish future performance goals
6. Communicate findings and gain acceptance
7. Set action plans and implement
8. Monitor results and recalibrate

CQE exam tips

• Functional benchmarking often yields the biggest breakthroughs — best-in-class may not be in your industry.
• Internal benchmarking is the easiest to conduct (data access) but produces the smallest gains.
• Competitive benchmarking data is often obtained through published reports, reverse engineering, or trade associations — direct sharing with competitors raises antitrust concerns.

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