There are always ways to improve the company’s supply chain management. Streamlining this flow of goods and services is the key to seeing increased efficiency in all aspects of your business. But determining which benchmarks to aim for is just as important as the decision to develop them in the first place.
That’s why we’ve put together this simple primer to crafting benchmarks for your end-to-end supply chain. Understand these concepts and you’ll be well on your way to a stronger system.
Tackle Qualitative and Quantitative Benchmarking
Qualitative benchmarking looks at the successful approaches of comparable businesses (even local competitors) in order to identify new, fresh tactics for improving supply chain management at your own company. Incorporating only the best practices of other similar companies can bring significant improvement to your own.
Quantitative benchmarking is more numbers-focused and data focused. You’ve probably heard of KPIs, also known as Key Performance Indicators. With quantitative benchmarking, KPIs such as processing time, inventory management, transport efficiency, productivity, and profit are used to analyze what does and doesn’t work, while eliminating waste in the system.
Level Up With Internal Benchmarking
Internal Benchmarking entails your organization focusing on the operations of its own departments and facets, and learning from the strengths and weaknesses of these structures. Processes are analyzed within these different branches and are studied on the basis of efficiency. Internal benchmarking offers a self-assessment, an objective look at an organization’s own systems. As a result, required restructuring, as well as the elimination and addition of processes are made clearer.
In external benchmarking, your own company’s data is compared to that of other businesses within the same industry. This data is commonly generated into a detailed report for you to review. The resulting outcome is that these practices can be incorporated if you choose.
It’s also important to remember that when it comes to direct competitors and competitive benchmarking, there are likely going to be more limits to your benchmarking. Rather than sharing valuable internal knowledge on best practices, direct competitors will be more likely to use common industry metrics.
Analyze Opportunities Strategically
Just because something works for one company in your industry doesn’t mean it will work for yours. Analyze the context as much as you can, and prune or add improvements only after careful consideration of the data. Effective benchmarking requires experience, skill, analytic ability, and a deep understanding of how the supply chain works. Involving different levels within your organization in the decision making process will allow you to make more informed calls and increase the likelihood of success for any given change.
Are you in the process of improving your supply chain? Consider eShipper for all your global shipping needs. To discuss how we can help you enhance the efficiency of your system or learn more about shipping best practices, get in touch with us today.