Benchmarking helps you to improve your performance
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Benchmarking & KPIs
Are you keen measure the performance of your logistics processes, supply chain or organization as a whole against that of your competitors or against your own and/or your customers’ expectations? Or are you looking for concrete tools to further professionalize your company, to achieve your key performance indicators (KPIs) or to save costs? Benchmarking is a crucial first step in this process.
What is benchmarking?
‘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 and achieving KPI targets.
Benchmarking provides a helicopter view of your organization. It gives you quantitative and qualitative insights into your market position and is an extremely useful instrument to steer your business. In order to guarantee accurate results, it is essential to combine thoroughness with knowledge of a variety of industries.
Benchmarking for transport & logistics
Consulting firm Groenewout has extensive experience in conducting benchmarks for 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 freight 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.
Benchmark & KPI references
Benchmarking logistics & supply chain operations; your supply chain performance is compared against that of your competitors and areas are highlighted for improvement.
Benchmark topics, for example: business processes, logistics-related Key Performance Indicators (KPIs), freight costs, warehousing costs.
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Topics in benchmarking & KPI
Benchmarking insight into costs
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 freight transport to identify possible savings on transport costs. This comparison led to negotiations resulting in better contracts with the logistics service providers.
- Comparison of logistics business processes against industry benchmarks. This benchmarking activity identified several opportunities for cost reductions, amounting to a total savings potential of over EUR1.6 million.