What is Benchmarking?Competitive Benchmarking isthe continuous measurement of the company’s products,services, processes and practices against the standards ofbest competitors and other companies who are recognizedas leaders.Who are doing it?Xerox started the practice in 1981, then became popularin all major international companies, e.g. MotorolaThere are international organizations specialized inthis service, e.g., Global Benchmarking Council,American Productivity and Quality CenterAsian Benchmarking Clearinghouse, Hong KongBenchmarking Clearinghouse
Setting Benchmarking PrioritiesWhich processes and entities in the supply chain are ofstrategic importanceWhich processes and entities have a high relativeimpact on the business economics (costs, revenue,asset performance, and human productivity)Where there is a choice between ‘make’ and ‘buy’(processes of high impact on performance /productivityand hard to source from suppliers)Where there is internal readiness to change
BenchmarkPrioritiesRelative impact on businesseconomicsProcesses that have adisproportionate impact on:Total costRevenue generationFixed-asset productivityHuman productivityStrategic importanceProcess that are likely to play amajor role in the future success ofthe companyOrganizational readinessProcesses executed bypersonnel who are ‘ready’ toimproveMake versus buy economicsProcesses determined to have highimpact on product performance/profitability and which are hard tosource from quality suppliers
ConclusionBenchmarking vital tool in maintaining world classstatus.Successful benchmarking programmes firstly enablelogistics strategies to be developed which are firmlybased upon customer service requirements,and secondly, ensure that the processesemployed are truly leading edge.
ReferencesChristopher, M., Logistics and Supply ChainManagement, 3rd edition, FT-Prentice Hall,2005.