Benchmarking Now an Indispensable Business Practice
Benchmarking the supply chain was once seen as a novelty, a practice introduced by big companies with plenty of staff and plenty of money to produce data that would allow them to boast publicly about their performance metrics.
But, with the maturing of the market over the years, benchmarking is now recognised by companies, big and small, as an indispensable means to cut costs and improve efficiencies right across the supply chain.
The explosion of benchmarking across numerous industries is being fuelled by economic factors. The most overriding reasons to benchmark are to improve efficiency and to reduce costs. It has been shown, for example, that best-in-class supply chains operate at 50 percent of the cost of their peers.
- It provides a realistic insight into a supply chain performance compared to others
- It helps identify achievable goals
- It can be used to set a baseline for continuous improvement
- It can identify metrics to suit specific improvements
- It can help identify best practices
- It highlights shortfalls in a company’s operational performance compared to best-in-class supply chains.
However, Supply Chain is Only Part of the Modern Business Benchmarking Story
Business benchmarking is being applied nowadays in ways not thought possible before, including, significantly, measuring a business’s impact on the environment, its carbon emissions, and its human rights record.
Some examples:
1) World Benchmark Alliance has ranked international seafood companies according to their promotion of stewardship of natural resources and production chains.
2) Corporate Human Rights Benchmark has since 2017 annually ranked 200 of the largest publicly traded companies in the world on a set of human rights indicators.
3) KPMG regularly publishes benchmarking reports on a range of business sectors, including:
- The performance of city services around the world
- An analysis of the enterprise value of the most prominent European football clubs
- The European golf market
- Responsible investment
- Innovation in the workplace
4) Benchmarking software has been tailored for niche sectors, such as law firms, road toll companies, online gambling, family business owners, and a whole lot more besides.
As in life, as in business, benchmarking is more and more becoming everyday practice. It makes good business sense: Unless you measure, you can’t improve.
As late US football player Ralph Marston put it so aptly: “What you do today can improve all your tomorrows.”