Functional Benchmarking
This type of benchmarking address's performance comparison with the best functional areas, regardless of the industry in which they arc located. For many years, dating well back into the 19th century. companies were organized and structured both to maximize efficiency and also to control growth. However, with the emergence of a single world economy and increased competition from ~l comers of the globe. today's competitive priorities for success have shifted from efficiency to innovation, speed,
service, and quality. To increase efficiency in the factory, job design was dominated by the division-oflabor concept in which the work to be done was subdivided into a series of tasks that could be performed by less-skilled individuals. However, this approach, while increasing productivity among lower-skilled workers, had its disadvantages. With each individual focusing
primarily on his or her assigned task. no one assumed overall responsibility for the process itself. The result was that these conventional process structures were fragmented and piecemeal. and consequently lacked the integration necessary to support the current competitive priorities, for example, quality and service. This shift in priorities has forced managers to rethink how their firms operate, and to focus on redesigning their core business processes. This is the goal of reengineering. To accomplish this, we need to "get back to the basics," by applying some of the concepts presented in this chapter that allow us to better understand these processes.
Process Measurement and Analysis The benefits to this are several. First, a firm may have less difficulty in obtaining benchmarking partners in other industries where there are not direct competitors. In addition. It is often easy to identify those firms that are con redivide to be the "best of breed" in performing a specific function. The L.L. Bean example presented at the beginning of this section provides a good example of functional benchmarking. Other examples of leaders in specific functional areas include General Electric (information systems),) John Deere (service parts logistics, see photo), and Ford (assembly automation).
