What is Benchmarking?
It may be one of the most overused idioms in the English language but the phrase “imitation is the sincerest form of flattery” underscores the equally widely quoted business improvement technique known as “benchmarking”.
Benchmarking is a quality improvement programme and can be defined as the process of comparing practices and results with ‘best in class’ organisations - both competing and non - and then adapting key features of those practices to one’s own organisation.
It is a powerful tool to help businesses achieve and maintain competitive advantage through the measurement, monitoring and improvement of processes on a continuous basis.
The merits of undertaking a benchmarking exercise can be applied to any company regardless of size or sector and are not restricted to the ‘Blue Chip’ or FTSE100 organisations.
Benchmark Your Logistics
Increasing global competition, rising costs and more demanding customers mean that in order to remain viable and profitable, companies must continually improve the quality and value of their products and service offering.
In today’s competitive market and economy, failure to do so can quickly translate into declining sales, falling profits and even worse. Your competitors will use benchmarking and, as a result, may be able to take away your customers. So it could be said that benchmarking is an important requirement for corporate survival.
How to Benchmark
Benchmarking can be undertaken at the functional level, to measure and improve specific business functions or processes. Or at strategic level, for instance, to identify what an organisation needs to do to reduce its operating costs to remain competitive with key rivals, or to retain or grow its market share.
At Davies & Robson, our consultants have extensive experience of both tactical and strategic benchmarking but the most common service requested by our clients is benchmarking at the functional level, particularly of warehousing and transport operations, inventory control and customer service.
Decide which process to benchmark. This can be determined by identifying the function that causes the most problems, or which has the greatest impact on the customer. In many cases this is the logistics function which is effectively responsible for the physical delivery of service, where problems are therefore both highly visible and mission critical.
Measure the current process. At this stage, key performance indicators must be developed and used to record the current level of efficiency and service quality.
Within warehousing this is likely to involve the measurement of delivery failures, picking productivity or pick accuracy, while in transport the measures may be the cost per customer delivery or vehicle utilisation.
Process map the function being benchmarked. Detailed process analysis of a specific operation such as this can provide a valuable insight - rarely do companies fully understand exactly how things work on a day-to-day basis and, in many cases, how little is required to improve efficiency and productivity levels.
Identify competitors and other best-in-class companies against which to benchmark your own performance. Of course, sourcing relevant “best in class” information is not always easy but useful sources include:
- Annual reports
- Trade shows and industry sector conferences
- Professional bodies and organisations, e.g. the FTA, RHA, Cranfield University
- Trade journals and publications
- Equipment suppliers may also be able to provide particular standards
- And, of course - specialist consultancies with access to relevant information
Compare your own performance with that of the benchmark organisations. Identify and understand the reasons for any variance and what changes can be made to enable you to achieve or exceed this level. Focus should include service quality and customer satisfaction as well as efficiency and cost reduction.
Your Logistics Benchmarking Solution
As a specialist logistics consultancy, Davies & Robson is ideally placed to assist with the sourcing of relevant “best-in-class” standards. Our consultants have spent many years working for a wide range of companies across all business sectors and have built a vast knowledge of leading practices and techniques, costs, productivities and standards.
Davies & Robson is able to provide comprehensive strategic and operational support. All of our consultants have practical experience gained in both commercial and operational roles. We pride ourselves on a reputation for delivering practical, achievable solutions, based on individual requirements rather than pre-set formulas.