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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