There are many good reasons to benchmark your Logistics and Supply Chain operations, not least of all to streamline processes, highlight shortfalls in operational performance, and to cut costs.
But benchmarking best practices can also serve as an important tool for managers to achieve company goals, by, for example, breaking up internal logjams, overcoming resistance to change, and convincing company executives of the need for new initiatives.
How Managers can Best Harness the Benefits of Benchmarking
C-Suite executives have been known to dismiss benchmarking as “paralysis by analysis”, based on their limited experience of the process and a lack of understanding of its role in helping the business achieve a competitive edge against rivals.
A canny manager, however, will use the benchmarking programme to achieve all or some of the following business strategies, despite the possibility of resistance from on high:
Attaining the Company’s Business Goals
This strategy involves coalface issues such as defining success, drawing up time-frames, adapting to changes in the market, and monitoring progress towards goals. It is crucial for the manager to demonstrate how the benchmarking programme supports the company’s overall business goals.
Building Infrastructure
Infrastructure in this sense includes, inter alia, the adoption of accounting tools, valuation approaches, reporting standards, and means to track data bases. With this infrastructure in place, members of the team will have the means to communicate clearly, make decisions, and implement actions.
Applying the Microscope
Benchmarking can and should be used by managers to make a microscopic examination of business practices that support supply chain processes and/or key objectives. One objective would be to identify best practices, either internally or externally, to gain maximum competitive advantage. Another objective would be to improve customer relations.
Streamlining the Operations
As a manager, it is your duty, with the help of your team, to streamline the workflow by retooling business processes and administrative systems, by implementing appropriate technology, by outsourcing some functions if necessary, and/or by reorganising information technology options.
Facilitating the Process of Change
The manager needs to scrutinise benchmarking data to identify the best practices of external organisations and determine whether these could be applied to the company’s supply chain.
She or he will also use the data to provide a global perspective of how the various segments of the supply chain affect the whole. This then allows the manager to focus on areas where improvements can be made, and how changes can be implemented.
Conclusion: Performance benchmarking is a very necessary tool that puts the spotlight on segments of the supply chain such as product and service quality, price, customer satisfaction, speed of delivery, and reliability. It also determines the strength of a company’s products and services against those of the competition.
Good managers will use the tool to identify modifications needed in the supply chain to give the company a competitive edge—and, crucially, be assertive enough to persuade company executives to embrace the changes.
If you have specific questions about benchmarking, change management, KPIs, sustainable performance, or organisational development, please do get in touch with us.