benchmarking

The Basic Introduction on Supply Chain and Logistics Benchmarking

The Basic Introduction on Supply Chain and Logistics Benchmarking

What is Supply Chain Benchmarking? Why and how do we do it? Check out this video to find out the answers. Also, we have a recorded webinar on this topic. You can access it here: https://www.logisticsbureau.com/benchmarking-replay/ Related articles on this topic have appeared throughout our websites, why not check them out? Robobyrne: Warehouse & Distribution Centre Benchmarking Case Study Supply Chain Secrets: One Of The Best KPI Ever Benchmarking Success: Why Performance Benchmarking is a Powerful Management Tool Dawson Consulting: Why Supply Chain Benchmarking Matters for Small Businesses Editor’s Note: This post was originally published on October 14, 2020, under the title “Basic Introduction on Supply Chain and Logistics Benchmarking” on Logistics Bureau’s website. Best Regards, Rob O’Byrne Email: robyrne@logisticsbureau.com Phone: +61 417 417...

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How to Benchmark Your Supply Chain

How to Benchmark Your Supply Chain

Well, I asked Steven Thacker, one of our benchmarking management experts, exactly that question! I hope his answers help you. What is Benchmarking? Benchmarking is essentially comparing; comparing one against another. When we compare different levels of sophistication and performance in supply chains, we can identify particular levels that we think are important to achieve, or that represent typical performance levels for supply chains as a whole. Those levels are “benchmarks”. Of course, benchmarks and benchmarking can cover all kinds of different things, at work or elsewhere. Suppose you wanted to be the fastest runner in the world, for example. The first thing you’d want to know is “what is the benchmark?” meaning “what speed do I have to beat to be the fastest?” You can benchmark for individuals and also for teams. You can also benchmark supply chains. Sometimes benchmarks, like how fast you run, how high you jump, and so on are easy to identify. They are simple activities to measure and the figures are clear and meaningful. Elsewhere it’s more complex, as is often the case in business. It’s still just as important, though, if you want your business to improve, to know how you compare, and how good you have to be to be the best. How Can a Business Start Benchmarking? You can start with the things organisations frequently want to benchmark. The first of these is “How good is my service?” In fact, it’s also a good idea to go further, because these days, service provision should typically be a competitive advantage for an organisation. So the questions are rather: “How good is my service today?” and “How good does it have to be to really differentiate my business compared to my competitors?” A second one is then cost; For instance, “Is that level of service, whether current or planned, cost-effective?” This is a question that frustrates businesses if they only have data that is anecdotal and subjective, and lack the quantitative hard data that really tells them what’s going on. This is where the SCOR model can be a big help, because it defines formal, structured ways of capturing data, which can then be stored in a database to provide a better guarantee of accuracy. Using SCOR to Benchmark the Supply Chain SCOR is a method that’s helped businesses in many different areas, such as quality circles. In the general supply chain...

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11 Golden Rules for Meaningful Supply Chain KPIs

11 Golden Rules for Meaningful Supply Chain KPIs

In an attempt to help you keep your supply chain organisation from analysis paralysis, metric manipulation, or measurement misnomers, I decided to use this post to share nine important guidelines, or golden rules, for benchmarking your business and monitoring performance using meaningful supply chain KPIs. Golden Rule #1: Meaningful KPIs Require a Meaningful Strategy I’ve written many posts on this blog about the importance of having a supply chain strategy aligned with the overall business plan, and why it is a mistake to have misaligned strategies. I’ve also described some of the issues that can arise from such an error. However, it’s a topic worth touching on again, as an unclear or misaligned supply chain strategy will make it difficult for you to develop meaningful KPIs. Your supply chain strategy should be the basis for your KPIs, but for that to be possible, the strategy must be clear, understandable, and aligned with the business plan. With these conditions assured, you should be able to identify (broadly) the areas of measurement that will steer your organisation towards its goals. Golden Rule #2: Don’t Meddle or Manipulate If you want meaningful supply chain KPIs, you need to live with the numbers they reveal. I’ve seen more than one management team create or exploit process loopholes to arrive at better KPI results. It’s a folly to do so, and it doesn’t do the managers or the company any favours. A prime example of this kind of manipulation (and really, it is manipulation), is when performance issues arise which result in shipment delays. Instead of concentrating on resolving the issues at hand, the management team starts contacting customers and asking if they will accept a later delivery date or time. If the customers agree, the management team dispatches the shipments and records them as delivered on time. Of course, contacting the customers is the right thing to do, but when it is the shipper and not the customer, who initiates a change in the delivery schedule, there is no way it should be recorded as “on-time delivery.” Late is late, even when it is with a customer’s permission. Golden Rule #3: Put Yourself on the Outside, Looking In You can come up with a list of service metrics and call them KPIs, but that doesn’t automatically make them meaningful supply chain KPIs. For them to be useful, your service KPIs should reflect how...

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Why Large Companies Increasingly Opt for 4PL Services

Why Large Companies Increasingly Opt for 4PL Services

SUMMARY: Because 4PL providers handle a company’s entire chain, including challenges that are thrown up by advances in technology, they are increasingly being favoured over third-party logistics (3PL) providers, especially by big companies with complex supply chains. In its simplest form, fourth-party logistics is a model in which manufacturers hand over the entirety of the organisation and oversight of their supply chain to a 4PL provider. By contrast, the third-party logistics model is where a manufacturer retains oversight of its supply chain but outsources such processes as warehousing, shipping, packing, and distribution to a 3PL provider. When the COVID-19 pandemic began wreaking havoc in global supply chains, smaller companies turned to 3PL providers for help. Bigger companies with complex global supply chains, however, realised they needed sophisticated digital technologies and streamlined supply chain processes offered by 4PL providers to help them ride out the storm. The concept of fourth-party logistics has existed for some time but only truly began evolving with the arrival of Industry 4.0—the digitisation of manufacturing. Because 4PL providers handle a company’s entire chain, including challenges that are thrown up by advances in technology, they are increasingly being favoured over third-party logistics (3PL) providers, especially by big companies with complex supply chains. The Differences between 4PL and 3PL It will be helpful at this stage to determine the differences between 4PL and 3PL. The terms are often mixed up and some firms claim to be 4PL providers when in fact they only provide 3PL services. What is 4PL? In its simplest form, fourth-party logistics is a model in which manufacturers hand over the entirety of the organisation and oversight of their supply chain to a 4PL provider. What is 3PL? The third-party logistics model is where a manufacturer retains oversight of its supply chain but outsources processes such as warehousing, shipping, packing, and distribution to a 3PL provider. The key difference between the two can perhaps be explained in the following example: A 3PL provider working with a paint manufacturer may package and store products as well as transport them to retailers and/or customers. Unlike a 4PL, however, it won’t manage the paint maker’s entire supply chain. There are, of course, some other important differences between the two types of providers: 4PL is, in general, better suited for medium-to-large businesses, while 3PL is more suited to small-to-medium businesses.4PL companies operate at the optimisation and collaboration level...

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A Case Study of Warehouse & Distribution Centre Benchmarking

A Case Study of Warehouse & Distribution Centre Benchmarking

BENCHMARKING IS A FANTASTIC BUSINESS IMPROVEMENT TOOL. John Monck, Manager Consulting at Logistics Bureau will demonstrate its use and explain more about it. Kindly watch the video below: Editor’s Note: This post was originally published on August 05, 2020, under the title “Warehouse & Distribution Centre Benchmarking Case Study— John Monck” on Logistics Bureau’s website. Best Regards,Rob O’ByrneEmail: robyrne@logisticsbureau.comPhone: +61 417 417...

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