On-farm benchmarking: How to do it and how to do it better?

International Farm Management Congress - J.R. Franks, and Jimi Collis

Type: PDF
Knowledge level: Intermediate

Farm Table says:

UK-based and a little outdated, but it would be interesting to have similar data collection methodology tables in the Australian context.

This UK-based paper introduces benchmarking and the requirements for effective benchmarking.

Some definitions of benchmarking are provided:

  • ‘Learning from others’ [Spendolini 1992]
  • ‘Borrowing the good ideas of others is what benchmarking is all about.’ [Brown 1995]
  •  ‘A benchmark is defined as a specific type of measure of comparison that provides a numerical measure of performance.’ [Richard Gray 2001]
  • ‘Benchmarking is the process of continuously measuring and comparing one’s business processes against comparable processes in leading organizations to obtain information that will help the organization identify and implement improvements.’ [Andersen and Pettersen, 1996]
  • ‘Benchmarking is the procedure of comparing the performance of an individual to the average. Normally this is of a financial nature but it can be more wide-ranging.’ [Powell et al 2002]
  • ‘Benchmarking is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help your organization improve its performance.’ It is an activity that looks outward to find best practices and high performance and then measures actual business operations against those goals.’ [The Benchmarking Exchange]

10 steps to successful benchmarking are provided:

  • Identify key performance indicators for whole farm enterprise & the individual enterprises
  • Identify and select databases against which comparisons can be made. Consider:  similar types of farms/enterprises
  • Adopt the methodology for drawing up financial and physical performance measures that is used in the comparative data set
  • Collect and enter data
  • Conduct the comparative analysis, identify high and low performance areas, against average, top and bottom performers
  • Investigate reasons for high/average/low standard key performance indicators to identify the process behind the higher performance, and therefore enable an in-depth development of “improvement action plan”
  • As for step 6 but on an individual ‘farm-by-farm’ basis. In this step, the specific key performance indicators are chosen because they
    represent key constraints for that particular farm business, whether it
  • Comparison of administrative efficiency in identifying and maximise
  • Identify an “improvement action plan”
  • Implement the “improvement action plan” on a systematic basis

Until benchmarking is made easier and the benefits are more clearly demonstrated (e.g. by innovations such as presenting data by categories which represent the major constraint faced by each farmers) it is unlikely many more farmers will use the technique.

 

2003 - United Kingdom - International Farm Management Congress - J.R. Franks, and Jimi Collis
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