Benchmarking and supply chain modelling...
At some time or another most companies decide to embark upon a
benchmarking exercise. The reasons are diverse. Perhaps there are
readily identifiable problems repeatedly occurring, maybe your competition
is stealing a march, customer service levels are going due south
or the Logistics Director has decided that this is the flavour of
the month. Whatever the reason, undertaking professional and meaningful
benchmarking is neither quick nor easy. It requires total commitment
at all levels. There must be strong and well- articulated reasons
for doing it and it must be aligned with your company’s vision
and strategy. Benchmarking some of your primary business processes
and ignoring others can lead to the wrong conclusions and actions.
You might correct some of the symptoms but remain blissfully ignorant
of the disease.
Benchmarking, if well constructed and applied, can be a tremendous
aid to successful operations. But companies about to embark upon
it for the first time would be well advised to seek some external
guidance. Too much time, energy and expense have been devoted to
benchmarking exercises that that never delivered the objectives
or crashed and burned half way through the exercise.
Bisham Consulting has a 5-step approach that can assist companies
to benchmark and avoid the numerous pitfalls that are commonplace.
We also have a number of tools to model various supply chain options.
In particular, our Cost to Serve model has many advantages
- The Cost-to-Serve Model (CSM) establishes a baseline against
which to compare alternative solutions
- Developing the CSM provides a common framework of Key Performance
Indicators for discussion
- It considers physical distribution costs by distribution channel,
product type and customer market
- It helps to identify areas of relatively high costs and focus
attention on the issues, which matter
- It enables the options to be rigorously tested against the
assumptions and ensures that the options selected are robust
- It helps to identify ‘quick wins’
- It may be necessary to adjust the CSM based on data availability
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