Académique Documents
Professionnel Documents
Culture Documents
in Supply Chain
Benchmarking
October 2009
TABLE OF CONTENTS
Table of Contents ..........................................................................................................................................................2
Question 5: What type of benchmarking will your organization be considering in the next 12 months?..........11
Question 6: Please rate each supply chain category by how likely they are to benefit from benchmarking
activities? .............................................................................................................................................................12
Question 7: Given your experience, what were the positive results achieved in previous benchmarking
activities? .............................................................................................................................................................13
Question 8: Given your experience, what were the primary difficulties experienced when participating in
previous benchmarking activities? ......................................................................................................................14
Question 9: In your opinion, how easy is it for your supply chain organization to generate and share
quantitative performance data that might be used in benchmarking programs? ..............................................15
Question 10: In your opinion, what time of year is most appropriate for your supply chain organization to
participate in benchmarking programs?..............................................................................................................17
EDITOR’S NOTE
October 16, 2009
The study was meant to be brief and precisely focused and was designed in the
form of a 10 question survey distributed online to a targeted list of supply chain
professionals. Although the brevity of the survey indicated that the results would merely
be a temperature check of current opinions on the subject, we found that the responses
yielded much richer results and correlations than initially anticipated.
Most interesting was the difference found between participants opinions regarding
the ease of internal data collection and the perceived lack of comparable data points as
a barrier to achieving benchmarking benefits, as well as how the respondents viewed
the value of cost management in relation to actual benefits achieved through
benchmarking .
Thank you to all the respondents that made this study possible and I hope that you
find the results as interesting and useful as we did.
Marc A. Brazeau
Principal
AutoDiversity Management inc. (ADMi)
AutoDiversity Management Inc. (ADMi), recognizing the demand for insight into the
strategies and tactics that enable supply chain improvement, performed a global cross-
industry review of client opinions on the use of benchmarking as a tool to improve
supply chain transparency, performance measurement, and business development
opportunities.
This study aims to provide valuable insight into the current uses of benchmarking as
an integral management tool in 2009, the perceived benefits and barriers to
participating in benchmarking initiatives, and the opportunities that benchmarking can
offer the supply chain industry in 2010.
ADMi conducted the 2009 Trends in Supply Chain Benchmarking survey during the
months of July and August of 2009, distributing the questionnaire to 1,941 supply chain
leaders across six industries. Participants were asked to gauge supply chain and
benchmarking activities within their organizations. Survey responses were collected
over a 4 week period then analyzed and summarized at an aggregate level.
Respondent Profile |
Survey participants were drawn from six global industries, all of which rely heavily
on supply chains. Contributors were identified via trusted and direct sources; either as
existing clients, known colleagues or recognized decision makers that expressed interest
in participating in the survey. Selection criterion was vital to ensure meaningful survey
data for analysis.
Furthermore, the Transportation sector includes logistics service providers, third The study has an
party logistics concerns and transportation brokerages and International freight
forwarders. The Technology sector includes information systems and technology
equitable distribution of
providers to the overall supply chain industry. purchasing decision-
Although overall response rates are slanted towards the automotive industry, the
makers and supply chain
crucial dimension of this profile is the equitable distribution of responses from supply operator respondents
chain purchasing decision makers (59%) and logistics service providers (41%), providing
a very balanced opinion base for the remaining study questions. (Figure 1b – Purchasers
vs. Providers)
Feedback on the next question establishes the significance of the yearly spend on
supply chain operations. Regardless of an organization’s budget, if supply chain costs
apply, they represent a significant overhead. A strong and equal representation from a
range of businesses - this question applied mostly to the 59% of service users - revealed
the importance of this considerable outlay on an organization’s bottom line and
therefore the indisputable opportunity it provides to realize savings.
The 56% of respondents with annual supply chain expenditure over $100million are
ideally placed to benefit from quick-win savings revealed through benchmarking, mainly
attributable to the scope of their spend activity.
The findings validate that, regardless of actual spend, the proportion of achievable
savings bears out the importance of capitalizing on any re-engineering benefits resulting
through benchmarking or any other comparative study method.
For those 39% not currently engaged in benchmarking activities, consider what
these organizations are missing out on in terms of improvements and where they fit in
with competitors now and in the future. If current benchmarking program adherence
continues to increase in depth and scope across the industry, as time goes on, those
organizations choosing not to participate in benchmarking programs may be put at a
significant disadvantage in establishing best practices and influencing industry policy. This response
demonstrated support
for benchmarking and a
commitment to
identifying real
performance
improvements
Further to the preceding question, the survey explored the types of benchmarking
engaged in and, where there is engagement, it found that the studies performed to date
were not truly holistic in their approach. Narrow dimensions are chosen for studies
based on specific needs rather than amalgamated to create a comprehensive
understanding of the correlation that exists between the multiple dimensions that make
up high performing supply chains.
Overwhelmingly the
survey found that the
focus of benchmarking
Figure 4 - Type of Current Benchmarking studies has been on
Operational elements were analyzed separately rather than studies that capture
specific business
the wider impact on overall delivery. (Figure 4 – Type of Current Benchmarking) processes
Overwhelmingly the survey found that the focus of benchmarking studies has been
on specific business processes.
The performance of the supply chain network was a close second, with 49% of the
respondents replying that they would like to assess their competitive position within the
market by comparing specific performance metrics.
While many companies indicate an inability to strategically plan and set a course for
their supply chain organization, 46% of the respondents recognize the importance of
strategic benchmarking to identify advantages and disadvantages in their supply chain
network.
Comparing the findings from this question to those of the current benchmarking Benchmarking initiatives
engagement statistics in question 4, we find, surprisingly enough, that Product are on the rise across all
benchmarking seems to be poised for the biggest gain in adoption, with Functional a
close second (Figure 5a). This is an interesting finding because both of those types
areas of the industry
require greater detail and technical proficiency to perform, which may imply that current
benchmarking practices are indeed evolving, as previously thought, into deeper and
broader areas of study and geared more towards technological advancements in supply
chain management systems and equipment R&D (Product), as well as the organizations
ability to synthesize the benefits of those advancements into workload productivity
(Functional).
Question 6: Please rate each supply chain category by how likely they are to
benefit from benchmarking activities?
Based upon feedback, benefits accrued fairly consistently across each performance
dimension. In fact no category scored below the midpoint demonstrating that a
corporation’s individual benchmarking aspirations are closely shared by competitors and
colleagues alike. (Figure 6 – Benchmarking Benefits by Supply Chain Category)
Organizations vary only mildly in terms of where they feel the greatest benefit is
achieved and as a whole the industry is very much in harmony when stipulating
benchmarking benefit requirements.
Organizations vary only
mildly in terms of where
they feel the greatest
benefit is achieved and
as a whole the industry is
very much in harmony
when stipulating
benchmarking benefit
requirements
Figure 6 - Benchmarking Benefits by Supply Chain Category
Cost Management obtained the highest rating at 3.3, network design and
operations averaged 3.00, with systems, organization, and strategy all falling between
2.77 and 2.82. This information confirms the current economic landscape indicating
that supply chain organizations are focused on overall cost reduction to ensure a
competitive edge and be ideally positioned for an economic turnaround tomorrow.
Question 7: Given your experience, what were the positive results achieved in
previous benchmarking activities?
…Although organizations
value cost reduction
highly there is an
understanding that this
Figure 7 - Positive Results of Benchmarking
can only be repeated,
The top three positive results from benchmarking activities are:
measured and improved
• Provision of a performance baseline (62%), upon through the
• Provision of a competitive ranking alongside similar companies (59%),
and
implementation of…
• The generation of cost savings initiatives (54%). effective long-term
That the provision of a performance baseline is seen as the most significant
governing strateg(ies)
outcome emphasizes the importance of a roadmap to ensure sustainable competitive
ranking and on-going cost savings amongst other results.
It appears that although respondents were fairly satisfied with past studies, they
weren’t entirely satisfied with the identification of specific actions to improve
performance (only 46% ranked this as a positive result). The identification of mining
gaps was also ranked at the lowest of the positive results at only 31%. These last two
points support one of the top weaknesses identified in past studies that data can be too
high level lacking the required detail to identify mining gaps in organization or pinpoint
actionable items that impact performance.
A lack of comparable data was by far – 69%- the most frustrating shortcoming of
past studies. The apparent inability to compare like-for-like data, performance,
processes or networks seriously compromises the results of the study restricting the
participant’s ability to validate network performance.
Excluding data comparison, the other challenges are statistically low barriers to
benchmarking participation. Comparatively, the Positive Results illustrated in Figure 7
confirm that participants feel the positive outcome of these far outweighs drawbacks.
Repeatedly the importance of this data for benchmarking has been raised: 69% of
respondents rated a lack of comparable data the most frustrating shortcoming in Figure
8. Respondents were polled to gain an understanding of the realities of information
sharing.
Another drawback identified by the study that can be compounded by data collection
difficulties was the time consuming aspect of participating in benchmarking studies.
When a company struggles to gather quantitative data, protracted manipulation of the
data may be required to synthesize it for the study to be truly meaningful. Lengthy
analysis may unfortunately lead to frustration and dissatisfaction in participating in 67% of organizations are
benchmarking studies or, when the conclusion is rushed, in the significance of the
generated study results.
currently in a strong
position to participate
and benefit from
benchmarking studies
that produce timely,
detailed and actionable
results
Organizations that struggle with detailed data gathering may find themselves at a
competitive disadvantage if they cannot fully grasp the impact of change on the supply
chain network or its cost structure. These companies may struggle to improve their
networks and become more competitive in the marketplace.
Question 10: In your opinion, what time of year is most appropriate for your
supply chain organization to participate in benchmarking programs?
For the majority of respondents (38%), the timing is irrelevant, whereas: 23%
preferred the first quarter, 15% preferred the second quarter, and 21% preferred the
third quarter.
Ideally the first quarter is preferable for data collection, allowing for synthesis and
analysis to occur during the second quarter so that results are delivered and actionable
items may be applied during the third quarter along with the annual budget, strategic
and operational planning periods of most organizations.
Administratively, the fourth quarter is a busy time for most companies making it
difficult to guarantee the availability of resources for participation in any type of
benchmarking study.
CONCLUDING ANALYSIS
The 2009 Trends in Supply Chain Benchmarking white paper confirms
that the majority of respondents recognize the value of benchmarking and
participate in studies today. Further, the survey reveals that planned
benchmarking is on the rise across all study dimensions, suggesting the
possibility of an influential gap between those currently benchmarking and
the remaining 38 percent that have yet to engage in the opportunity for an unbiased
evaluation of their network.
Contrary to common assumption, the survey demonstrates that cost savings is not
identified as the single most beneficial dimension. Rather, the provision of a baseline
and the competitive ranking of each company’s supply chain network were recognized
as being of most value to participants. This factor bears out that benchmarking can be
as beneficial to supply chain partners as to their purchasers. As opposed to focusing
solely on price reduction, comprehensive cost management, including the
administration and correlation of all aspects of the supply chain, provides the most
favorable long term results increasing the efficiency of all supply chain partners’
operations.
The fourth quarter was deemed unfavorable for benchmarking activities yet the
majority of respondents were very open to participating throughout the rest of the year.
This result supports the benchmarking process of data collection, from the previous full
calendar year, during the first quarter, data analysis and results review in the second
quarter, with development and implementation of action plans the remainder of the
year.
The 2009 Trends in Supply Chain Benchmarking survey bears out that benchmarking
is a popular and valid tool in use widely across the industry and, indeed, confirms that
benchmarking, when properly structured, defined and adopted is considered an
effective tool to evaluate supply chain performance and cost structure in relation to
overall corporate efficiency and goals. Companies need to pursue further collaborative
data-sharing efforts to effectively realize the full benefits of measuring performance and
gauging progress against competitors while improving their competitive edge.
ADMi is an impartial supply chain consultancy and research organization that offers
clients strategy, research and collaboration support by providing supply chain
benchmarking and analysis. ADMi provides strategy consulting, transportation research,
decision and purchasing support to the Global supply chain industry. ADMi is uniquely
designed to provide unbiased, non-conflict of interest supply chain research and
decision support services to all the supply chain industry by creating mutually
productive collaborative network opportunities, promote supply chain innovation and
standards, as well as provide qualifying tools to emerging carriers and service providers
to improve overall competition.
Vehnet is the leading name in IT systems for outbound finished vehicle logistics,
providing the industry’s most advanced software to major companies worldwide.
Offering unrivalled expertise and comprehensive practical experience in this sector,
Vehnet is committed to continuous innovation and outstanding support, keeping clients
ahead of competitors through better service, improved efficiency and reduced costs.
Wherever vehicles and other rolling assets are handled, stored, processed and
transported, Vehnet can make a real difference to business processes - and to carbon
footprint. Operating at locations across Europe, North America and Asia, Vehnet
technology is the most sophisticated and adaptable software available today.
Contact Information
David C. Vandenbossche,
Principal Consultant
dcv@autodiversity.com
Confidentiality
All information in this document is provided in confidence for the sole purpose of
adjudication of the document and shall not be used for any other purpose, be published
or disclosed wholly or in part to any other party without ADMI’s prior permission in
writing nor be held in safe custody. These obligations shall not apply to information
which is published or becomes known legitimately from some source other than ADMI.