How does benchmarking across the supply chain impact overall efficiency, including logistics and distribution?
Supply Chain Benchmarking is vital for improving performance and effectiveness, with companies using different practices to achieve their goals.
Discover how these benchmarking practices work and why they matter. Find out which strategies offer the most benefits.
Trent Morris will provide detailed answers. Watch the video below to learn more.
I’m excited to dive into the topic of supply chain benchmarking, with a special focus on cost benchmarking. Joining me is Trent Morris, who brings a wealth of knowledge on how businesses can effectively evaluate their logistics expenses in the face of rising costs and changing demand.
The Significance of Cost Analysis
Cost benchmarking has become crucial for companies dealing with increasing expenses and fluctuating demand. What Trent emphasizes is that this approach allows us to compare our logistics costs with industry standards. Instead of engaging in lengthy and expensive processes like RFPs, cost benchmarking offers a quicker, more efficient way to see if our expenses are competitive. It’s a great method for spotting potential savings without the hassle of traditional sourcing methods.
Methods for Effective Benchmarking
Trent’s process involves gathering about a year’s worth of data on transport, warehousing, and ocean freight. We then compare this data with industry benchmarks and verify it through third-party sources. If we spot any discrepancies, we might issue a small RFI to address them, clearly stating that this is for benchmarking and not immediate sourcing. For those of you who might prefer not to hire consultants, there are other resources. Industry reports like the Drewry World Container Index and the Australian Institute of Petroleum’s fuel price index can be invaluable for understanding market trends and evaluating your cost position.
Utilizing Industry Relationships
Networking is another powerful tool in benchmarking. By connecting with peers and potential suppliers, we can gain informal insights and comparisons. It’s also beneficial to maintain strong relationships with current suppliers, as they can offer valuable information about market trends and cost-saving opportunities. These interactions help us get a broader view of our performance and identify areas for improvement.
The Importance of Regular Evaluation
Regular benchmarking is essential for staying competitive and making informed decisions. It’s like running a race—you might think you’re doing well, but comparing yourself to others is crucial. Regularly checking where we stand against industry standards ensures we keep improving our logistics operations and effectively manage our costs. It’s an important practice for spotting opportunities to optimize and enhance our performance.
Make sure to watch the full video for detailed insight on this topic.
Related articles on this topic have appeared throughout our website, check them out:
- Freight Benchmarking: What Is It? Why Do It?
- How to Select the Right KPIs for Supply Chain Benchmarking
- The What, Why, How of Supply Chain Benchmarking
- Common Sense Warehouse Performance Metrics for Supply Chain Benchmarking
- 8 Uses for Supply Chain Benchmarking and Their Most Valuable Benefits
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated November 15, 2023, under the title “Supply Chain Benchmarking with Trent Morris“.
