Benchmarking in Supply Chain Operations

Logistics consulting services are one of the best ways to improve your warehouse operations and supply chain efficiency. Typical services include throughput management, warehouse operations, international logistics & transportation, and the development of new procurement systems. One key tool in the effective implementation of these services is benchmarking. Benchmarking allows logistics consultants to compare a business’ operations to some of the top performers in the industry in an effort to glean insights and information about how to operate more efficiently. 

Benchmarking allows an analyst to find out whether operations are “on-track” to meet future expectations. Additionally, benchmarking is a tool that can be used to constantly measure progress against clearly outlined target performance metrics. This type of system also lays the framework for the implementation of other improvement studies such as gap, SWOT, and stakeholder analyses. Overall, benchmarking is a fantastic tool to help companies define future business improvements. 

How to implement benchmarking in supply chain management operations? 

1. Analyze your own business and identify specific operations or processes that you are looking to improve. By targeting specific trains of your operations, you can focus your benchmarking studies and therefore your process improvement tasks. If there is one particularly troublesome process, it is possible to do an entire benchmarking study within that process. It is advisable to hire logistics consulting services for this type of work. Using a consultant from the start of a change management program is more effective than implementing mid-way through.
2. Recognize the key performance indicators (KPIs) for selected processes. Examples of KPIs include: cost, time, efficiency, and quality.
3. Document existing operations. Without having a baseline of your operations and your key performance metrics, it is impossible to measure improvement.
4. Identify competitors or your target for improvement. Targets can vary based on the type of improvement that your business is considering. In some cases, benchmarks can be used for reference and future state operations will approach your target. In other cases, your future state may match the target or even surpass, or breakthrough, the benchmark. 

Specifically, with regard to supply chain operations, the top 10% of companies typically spend 5% less on logistics and supply chain operations than their competitors. While 5% may not sound like much, when you are spending millions of dollars on logistics costs, it adds up. Experienced consultants who have witnessed these types of best practices and operations can be major keys to your business’ success.