Operations within your supply chain should be reviewed and revised constantly, to ensure you are making the necessary improvements to achieve your end goals, whatever they may be.Benchmarking your supply chain is a step by step process where you are able to determine which areas of your business you would like to change and what areas don’t need to be focused on at this moment in time. You can base your benchmarking process of 11 easy to follow steps;
11 Steps to Benchmarking your Supply Chain:
Select Area for Improvement
Although every area of your business could be improved, it’s best to benchmark one area at a time. Perhaps you are looking to improve your warehouse operations or looking to optimise your international supply chain. Decide which areas of your business you do want to improve and then cut it down to one area you think needs the most improvement – its best to start from the big issues and you can focus on the smaller details later! Now, you can get started on the process of benchmarking.
Define the process
After coming to a decision on what area of your business you are going to improve, you can define the process you are going to take in order to make these improvements. In order to do this, you will need to work with others and further your knowledge of how this area of your business works and how is best to improve it, for example, are you going to redesign your warehouse in order to optimise the space you already have? Often, having a look at what your competitors are doing and how they are evolving will help you brainstorm ideas of how you would like your business to run!
Identify Potential Partners for Comparison
Being able to understand your competition is absolutely crucial to success in benchmarking your supply chain. You are able to see what methods your competition has tried and what has worked or hasn’t worked for them – enabling you to learn from their mistakes and gain inspiration from their success, as well as seeing what methods haven’t been tested yet. Don’t just stick to your “market” there could be hidden inspiration outside of your immediate industry.
This is the most time-consuming task of benchmarking your supply chain. You will need to collect the data required to make the changes to your chosen area. This can often be outsourced to an external company for a small fee, but most companies find it just as easy to collect this information themselves. The type of data that you require could come in a range of different forms, such as old sales records, charts, monthly reports, forecasts, and more.
Watch out for abnormal numbers or anything that you think seems unusual. Keep a log of these discrepancies and all of the details such as the date, time, workers or any other key variable that may affect the data. Any of the discrepancies that you have recorded could help you to identify problems later on in the process. After identifying your discrepancies, you are able to work out different factors that could be creating areas of concern within your chosen business area. From this information, you are able to decipher the problems and come up with a solution to them in order to improve your chosen area of the business.
Establish Process Differences
After identifying your discrepancies, you are able to work out different factors that could be creating areas for concern within your chosen business area. From this information, you are able to decifer the problems and come up with a solution to them in order to improve your chosen area of the business.
Set Targets for Change
Setting your targets is a very important part of benchmarking. Your targets could be regarding the discrepancies you found in Step 5 or could be loosely based on other ideas you have for improvement in your chosen area. Remember that you can always alter your targets if and when you achieve them, so start realistic and gradual increase your end goal as you start to see improvement!
Communicate Internally and Externally
Make sure to communicate with your benchmarking colleagues on a regular basis, keeping each other informed on the progress and changes that are happening at all times. This could be achieved by holding a weekly meeting to discuss further plans, current achievements and setting new goals. If you have external colleagues, such as a business analyst or marketers, discuss your plans and progress with them, keeping everyone involved fully in the loop during the entire benchmarking process!
As you move on with the processes, you may find that the goals you previously decided on, no longer suit the needs of your business. Perhaps you have already achieved the original target that you put in place and now you want to raise that target in order to keep on improving! Don’t be scared to realign your goals and keep them relevant.
You will now need to implement your changes. You could do this on a step by step basis or entirely all at once, depending on the size and type of changes you are making. Make sure that you are continuously communicating during this process to ensure everyone knows what is happening when it is happening and why it is happening. This will help to avoid confusion and encourage everyone to work towards a common goal.
Review Results and Adjust
After making all of the necessary changes to your area of improvement, you must now evaluate how successful those changes have been. By doing so, you are able to determine if this area has been improved upon to its full capability or if there is still more you could improve upon. During this process, make sure you are keeping relevant, regular data. If you find that something is not working– adjust your process! Realign your goals! Benchmarking is a continuous process, and success depends on your ability to remain focused on your end goal and your desire to always want to achieve more!