What is Benchmarking?
According to Greg Simpson, swine nutritionist at OMAFRA, producers are often faced with the problem of not having enough time to do much in-depth comparisons or analysis with other producers while setting internal benchmarks for themselves and their production team.
16 February 2010
3 minute read
Benchmarking is the process of determining who the best is at a particular task or process. It sets the standard for everyone else to follow or attempt to achieve. Most of the early work in the area of benchmarking was done in the manufacturing sector. Now benchmarking is a management tool that is being applied almost anywhere to almost any process. From fundraising campaigns to manufacturing cars to agricultural production, benchmarks are being set all around us.
As an industry, swine producers are great at collecting production data and using it to make decisions on their farms. Producers are constantly setting internal benchmarks for themselves and their production team. But often there isn't enough time to do much in-depth comparisons or analysis with other producers or the broader industry. That is where the true power of benchmarking lies. If you do not know what the standard is, you cannot compare yourself against it. To continue to be competitive in these challenging times, you have to know where you stand and how you can improve.
One of the biggest challenges to external benchmarking is figuring out how to measure things. Take the data presented in Table 1 for example.
| Table 1. Comparison of feed cost per weaned pig1 | |||
| Feed cost per weaned pig | OMAFRA Swine Budget | Benchmarking Group A |
Benchmarking Group B |
|---|---|---|---|
| Average | $16.87 | $14.92 | $12.25 |
| Minimum | - | $11.45 | $10.94 |
| Maximum | - | $16.57 | $14.20 |
| 1 Compilation of data from January to June 2009 | |||
The values presented in each column are three different sources for the same measurement, feed cost per weaned pig. The value in the first column is derived from the OMAFRA swine budget. The values in the second and third column were obtained from two different benchmarking groups. While the numbers and the variation around them are interesting and raise a number of questions, are they calculated, or measured, in the same way. When you embark on external benchmarking, that is an important question to ask, otherwise it becomes difficult to compare across operations.
Once you decide what to benchmark, and how to measure it, the excitement begins when you figure out how someone got to be the best and determine what you have to do to get there. For many producers being involved in a benchmarking group can be highly rewarding, motivating and well worth the additional effort.
