As a manager or owner who’s responsible for the smooth functioning of your supply chain operations, you’re always looking for areas where you can improve efficiency and tackle problems that cause unnecessary burdens. Investing time and effort into addressing issues is not a one-time solution; however, it’s necessary to stay on top of your supply chain on a consistent, continuous basis. One approach is to implement a series of supply chain efficiency benchmarks, which can enable your enterprise to identify certain areas of improvement and focus resources to accomplish your goals.
Benchmarking is a Business Necessity
Briefly, benchmarking is a process that involves assessing the performance of your supply chain by looking at how different factors affect supply value, time and quantity. Doing so will give your company a concrete idea of how your efficiencies compare to those of your competitors. Though there are numerous criteria that may apply depending on your industry, some of the primary numbers to crunch are:
- Inventory positioning
- Supplier functioning
- Supply chain risk
- Team productivity
- Inventory organization
Supply chain efficiency benchmarks should be a part of a comprehensive business initiative to raise awareness of how other sectors of your company are performing and how their activities are interrelated. Making these assessments part of an ongoing strategy can show you where you can make improvements to get a leg up on your competition.
What to Look for in Benchmarking Solutions
Much like any other aspect of business operations, industry best practices are key to determining benchmarking solutions that are a good fit for your company. A few features to keep an eye out for include:
- Services that borrow best practices from some of the global leaders in supply chain management
- Solutions that implement relevant metrics to help identify inefficiencies and how to get the best value from prioritizing improvements
- Supply chain efficiency benchmarks that compare your company’s performance to the same analytics of your competition, as well as other organizations considered to be extraordinary performers
- Solutions that offer supply chain features that have shown high levels of success in real world scenarios
The Benefits of Supply Chain Efficiency Benchmarks
When you implement the right solution, you’ll see supply chain operations benefits in both the long and short term. You’re in a better position to evaluate your company’s success against organizations considered to be global leaders in supply chain efficiencies, as well as identify areas where you can improve performance.
However, one of the most critical advantages of implementing a supply chain benchmarking system is that it can help you gain the edge over your competition. It’s essential that you know how your standard operating procedures measure up to your peers and where you may be failing to remain competitive.
The process is known as external benchmarking because it looks outside your enterprise to assess your ability to maintain competitive advantage. These solutions enable you to compare key performance indicators, including inventory efficiency and revenue; plus, there may be other field-specific metrics to evaluate. Obviously, when you’re not performing as well as your competitors, supply chain efficiency benchmarking can help you isolate the causes.
Obviously, your competitors are likely to be less than forthcoming with providing you with their KPIs and the strategies they’ve implemented to improve performance. For this reason, the best practices approach is to retain a reputable consulting firm to analyze your supply chain operations and performance. These companies have the expertise to carefully analyze your processes and figure out where you’re failing – or where your competition is excelling. Only through identifying the inefficiencies will you know where to dedicate resources.