Identifying issues with supply chain benchmarking is one of the most important things you can do for your business. Find out why...
What is supply chain benchmarking?
Supply chain benchmarking involves ‘benchmarking’ or identifying key areas of your supply chain for improvement.
Supply chain risk, inventory positioning, logistics and distribution are just some of the areas that can benefit from benchmarking and will help you to improve the overall functionality of your supply chain.
Why is it important for your business?
If your supply chain doesn’t seem to be working as well as it should, this benchmarking can help you to identify the specific issues so you can get to work on improving them.
Also by measuring the efficiency of specific operations against other areas of your own business or other companies supply chains, you can gain a real sense of where your company might be going wrong.
What types of benchmarking are there?
There are actually two different types of benchmarking out there, internal benchmarking and external benchmarking.
The type that you use will depend of the type of business you run and the outcome that you are expecting to gain.
Internal benchmarking is perfect for a business that runs two or more facilities using the same supply chain method.
This process allows a business compare the same operations between multiple facilities to gain a better understanding of why some operations work well whilst other don’t.
A successful benchmarking process involves identifying the areas you wish to benchmark and working with your managers to focus on performance indicators within these areas.
Once this has been done, the data received can then be used to create a plan of action focussing on improving the areas of your supply chain that aren’t working as well as they could be.
Another type of supply chain benchmarking used by organisations is external benchmarking.
The intentions and outcomes are the same as internal, however, rather than comparing multiple facilities within your own business, you compare your supply chain with that of rival companies to see what improvements can be made.
Of course, this is easier said than done and most, if not all rival businesses will not be willing to share their success secrets with you.
This is where supply chain and logistic specialists come in.
Whether you want to complete internal or external benchmarking, working alongside experienced supply chain consultants can help you to create and implement performance improvement programmes will give your business the edge it needs to expand, improve and drive profitability.
Benchmarking is just one way you can improve your supply chain but it is also one of the most important.