Process benchmarking: a new tool
to improve the performance of
overhead areas
Ronald Gleich
European Business School, Oestrich-Winkel, Germany
Jaideep Motwani
Seidman College of Business, Grand Valley State University, Grand Rapids,
Michigan, USA, and
Andreas Wald
European Business School, Oestrich-Winkel, Germany
Abstract
Purpose – This paper aims to present an empirically developed and tested process to address the
limitations in the literature on the lack of appropriate performance measures and benchmarks for
recording activity and sub-process related cost. The process presented integrates performance
measures, process cost accounting tools and benchmarking.
Design/methodology/approach – A special type of research methodology called innovative action
research is utilized to develop and test the new process benchmarking tool.
Findings – The new tool provides information not only about costs, but also about the following
non-financial indicators: process volumes, process-related time (cycle times), and used
capacity/resources of processes. Also, the tool can be used in a very economical way.
Research limitations/implications – The findings of the study are limited to the German
mechanical engineering industry. Further research is needed for generalization of the proposed model.
Practical implications – Although, the mechanical engineering industry is used to demonstrate the
proposed framework, it can be applied to other industries with a little modification.
Originality/value – A new, effective and efficient tool for cost reduction and performance
improvement is developed and empirically tested.
Keywords Benchmarking, Cost accounting, Germany, Performance measures
Paper type Research paper
Introduction
Since the landmark publications by Tucker et al. (1987) and Camp (1989), only few
management tools have gained such a high degree of worldwide acceptance within the
last few years as benchmarking. Innumerable publications impressingly underline this
point of view. In German-speaking science and practice, benchmarking has also
become famous (Anderson and McAdam, 2005; Brokemper and Gleich, 1997, 1998a, b;
Dattakumar and Jagadeesh, 2003; Horva
´
th and Herter, 1992; Neely and Adams, 2002;
Yasin, 2002).
Regarding its contents, benchmarking can be considered as a new form of external
analysis, which has a strong functional emphasis and does refer mainly to financial
measures. These are partly built with values of a balance sheet item or figures and
statistical data taken from the external accounting. Benchmarking tries to overcome this
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
BIJ
15,3
242
Benchmarking: An International
Journal
Vol. 15 No. 3, 2008
pp. 242-256
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770810876584