Supply chain operations generate a significant amount of data every step of the way. Organizations that don’t take advantage of this information are missing out on important insights and the potential to improve their processes. If you do not currently measure essential metrics within your supply chain, now is the time to start doing the right things when leveraging benchmarking solutions.
Ignorance is not bliss
Information is king for modern businesses, so organizations would be remiss to ignore the data within their supply chains or only focus on one aspect of the operation. Do you know how your end-to-end supply chain performs against your competitors? How do your key components perform, and are there any KPIs set to drive improvements? If you cannot answer these questions, you could be missing out on significant business advancement opportunities.
Benchmarking will deliver the quality information that you need to help improve supply chain performance amid cross-functional, enterprise, geographic and global complexities. This type of service will tell you how to enhance processes with your current resources, taking into account how your company is performing and how much potential for development it holds. Organization leaders can no longer sit by and expect their supply chains to simply work for them. They must actively analyze the data and use its insights to make real improvements.
Understand the different benchmarking types
Organizations should typically use a combination of three types of benchmarking: internal, external and competitive. According to The Balance contributor Martin Murray, internal benchmarking enables a company with multiple facilities within the same supply chain to compare how processes are performed in those locations. This could be useful for manufacturers that have buildings set up across the nation. External benchmarking takes a company outside of its own industry to expose them to different methods that will help improve their internal processes. Lastly, businesses can use competitive benchmarking to identify strengths and weaknesses of their processes based on those of their competitors.
All of this information will be necessary for organizations to bolster their performance and identify where efficiencies can be made. Benchmarking studies might include financial analysis, product comparisons and strategic observations of how other companies compete. Using a combination of these components and the three different benchmarking study types, organizations can acquire a more comprehensive view of their supply chain and better identify ways that it can be improved.
Establish a benchmarking frequency
Information that you collected a year or two ago might have been useful at those times, but won’t necessarily apply to current needs. Harvard Business School contributor David Stauffer noted that a one shot or annual process will be unlikely to gain continuing commitment to improvement, while monthly benchmarking can turn managers into slaves of the numbers. Organizations should find a happy medium in frequency of benchmarking reports. Quarterly benchmarking might be the best solution as operators are used to working with reports in those timeframes.
It’s important to note that some processes might need to be benchmarked at different frequencies in order to keep up with the speed of business and maintain accurate information. Take stock of your supply chain processes and establish a routine benchmarking study that makes sense for your setup.
“Yes, it’s likely that you’ll best benchmark different processes at different frequencies, perhaps ranging from as often as weekly to as seldom as once every few years,” Stauffer wrote. “But experts add that frequency, in general, is increasing, because the speed of business is increasing, and also because the rankings of best-practices companies are changing at an ever-faster pace.”
Benchmarking is becoming an important part of improving supply chain performance and mitigating challenges. INsights Benchmarking from Inspirage will provide a number of benefits like understanding how you’re performing relative to your competitors, monitoring performance between product lines, instilling accountability and standardizing processes across the organization. For more information on how benchmarking can help you do the right things right, contact Inspirage today.