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What Is Manufacturing Benchmarking?

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  • Written By: G. Wiesen
  • Edited By: Shereen Skola
  • Last Modified Date: 31 May 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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In manufacturing benchmarking, a company evaluates its manufacturing process to compare statistics with other businesses. There are a number of different measurements that can be used for this, which often depend on the type of manufacturing a company performs but can also include more general considerations. One of the most common forms of manufacturing benchmarking is involved in overall performance, which evaluates different businesses to determine how one company compares to another. Best practices benchmarking, on the other hand, compares the various procedures between the best companies in an industry and another business, to gauge areas in which the second company can improve.

The basic idea behind manufacturing benchmarking is that companies can evaluate the way in which products are made in a quantitative, or numerical, way. This means that a business can evaluate how much money is spent, on average, for each item that is produced on a daily basis. Other measurements that are often used in manufacturing benchmarking include Overall Equipment Effectiveness (OEE), which is the amount of time a piece of equipment is operable on a regular basis, and customer delivery rates. These and other variables are all studied and analyzed for a particular company to produce meaningful statistics that indicate how well that business performs.

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Performance manufacturing benchmarking is typically used to determine these types of quantitative values for a company, and then compare them to other businesses. This allows major industry comparisons between manufacturers, to evaluate and consider how well one company compares to another. Different businesses are typically ranked in terms of the numbers produced through this type of manufacturing benchmarking, and investors and consumers can then see which companies are excelling over others. This type of information can be useful in some situations, but it does not usually provide any real information for a business in terms of how it can improve its performance.

In contrast to this, “best practices” manufacturing benchmarking is more specifically aimed at evaluating the measurements of one company with the best businesses in the same field. A manufacturer of circuit boards, for example, might generate benchmarking numbers and then compare each measurement with the highest ranked company in circuit board production. This provides direct information that can identify the areas in which the lower ranked company can improve to reach the same level of performance as the top company. Businesses can then use this sort of manufacturing benchmarking to set goals and plans to improve productivity, which can be vital for their growth and improvement.

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