Benchmarking helps you to improve your performance
‘Benchmark’ and ‘benchmarking’ are two terms often used interchangeably: the computer world tends to use ‘benchmark’, while ‘benchmarking’ is commonly used in management. Benchmarking is originally a term from the world of quality assurance. A benchmark is a test procedure to enable comparisons between processes, equipment, systems or organizations. As such, benchmarking is the first step towards improving performance.
At Groenewout, we have extensive experience in benchmarking supply chain operations. Our consultants compare your performance against that of your competitors and highlight areas for improvement.
This can include coverage of the following topics:
- Benchmarking of business processes: we assess your productivity levels and compare them against representative market values. This benchmark enables us to identify inefficient processes.
- Benchmarking of logistics-related Key Performance Indicators (KPIs): we analyze the data to measure the current KPIs (inventory, lead time, delivery reliability, etc.). Based on market information, we are able to establish the ‘to-be’ performance levels of the various KPIs.
- Benchmarking of transport costs: we compare your rates with a wide selection of market rates for every possible mode of transport. This includes consideration of aspects such as transit times, delivery reliability and whether the goods involved require special handling, among other things.
- Benchmarking of warehousing costs: taking account of the location, types of storage systems and containers, the nature of the goods, volumes and bonded warehouses among other things, we utilize detailed market data to benchmark your warehousing costs.
Benchmarking for transport
In order to give you a sense of our approach when providing advice on benchmarking, we are pleased to outline the project we completed for our client Spandex. Spandex, a leading supplier in the sign and specialty graphics industry, asked us to optimize its hardware and aftermarket freight within Europe and Australia while maintaining its existing supply chain footprint. In the first phase, we closely examined the supply chain performance. A combination of interviews and data analysis resulted in a longlist of potential areas for improvement. Benchmarking and simulation were two of the tools used to reduce the longlist to a shortlist of possible improvements. During the benchmarking process, the following aspects were considered:
- Benchmark of cargo transport to identify possible savings on transport costs. This comparison led to negotiations resulting in better contracts with the logistics service providers.
- Logistics business processes compared against industry benchmarks. This benchmarking activity identified several opportunities for cost reductions, amounting to a total savings potential of over EUR1.6 million.
Would you like to know more about how your organization can benefit from benchmarking? If so, please feel free to contact our expert: