Australian Best Practice Demonstration Program - Australia

Source: Australian Government

In 1991 the Federal Government established the Australian Best Practice Demonstration Program as a means of encouraging the adoption of international best practice to improve industry’s position against overseas competition.

Best Practice was defined as a comprehensive, integrated and cooperative approach to the continuous improvement of all facets of an organisation’s operations. It is the way leading edge companies manage their organisations to deliver world class standards of performance.

As a result of the early work in Best Practice a number of principles emerged, one of which was The use of performance measurement systems and benchmarking.

Benchmarking which is an objective, ongoing search for best practices and processes, is an essential tool for organisations committed to achieving world class standards of performance. 

Essential features of such a process include:

• involving employees at all levels;
• identifying, understanding and benchmarking key business processes;
• selecting suitable partners – not necessarily in the same industry, and
• carefully adapting identified best practices or approaches into the organisation.

The Australian Quality Council definition complements this approach: "A business excellence tool for finding, adapting and implementing outstanding practices in order to achieve superior performance".

Three types of benchmarking are distinguished in the literature:

• Internal benchmarking which involves benchmarking between various departments / sections within an organisation;
• Competitive benchmarking which involves benchmarking between enterprises in the same product market;
• Industry benchmarking, in which the benchmarking partner is not a competitor, and is part of the same industry.

The AQC defines benchmarking as outcome or process focussed.

These are further defined as:

Outcome Benchmarking examines high level aggregate measures of performance. Usually starts with the identification and definition of these measures and often uses ratios. Compares performance on a specific characteristic or set of characteristics. Provides little or no insight into the reasons for the differences in performance and does not indicate how to achieve the identified higher performance – further analysis is usually required. 

Process Benchmarking aims to examine, compare and improve performance of processes used in operations. Usually examines process flow, efficiency, effectiveness, adaptability, cycle time, cost etc., and is about how things are done and measures the effectiveness of the implemented improvements. 

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