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While Assessing Your Supply Chain Relevance, Consider Benchmarking
By Darrell Edwards, SVP & Chief Supply Chain Officer, La-Z-Boy
Benchmarking Brings Clarity to Your Strategy
So where do you start with your benchmarking exercise. At the most basic core of any business endeavor is being profitable, and being profitable means you’re doing most things very, very well. But regardless of how successful your firm is, there is always room to get better, and a successfully executed supply chain strategy can help fuel many of the initiatives for the business. Getting your supply chain strategy “right” is critical. As you assess the global market place you’re competing within, consider the following questions: where do you need to compete more strongly, where are you most vulnerable, and what must improve? Conversely, asking a significantly different set of questions can be equally compelling, such as: what are you doing well, where do you stand , and what do you need to keep doing? Change for change’s sake can be destructive, and often times winning with your supply chain means not only knowing what to change, but what not to change.
A good first step is to candidly consider how your supply chain is performing verses aspirational-type firms, or at least aspirational-type metrics you wish to improve. If your research includes publicly traded companies, a purview into their disclosed supply chain metrics can offer insightful learnings. Naturally, the evaluation can be extended well beyond the supply chain into many of the more common metrics, as most firms leverage their global supply chain as a strategic differentiator, and overall performance is generally an interdependent corollary to supply chain performance. Chances are, if the greater firm performance is good, so is it’s supply chain. But focusing on a few critical metrics can provide a powerful catalyst in changing your performance trajectory, or at least it should create the most value, the fastest.
Having personally been a part of several supply chain strategies throughout my career, I have found benchmarking to be one of the simplest, yet most powerful tools anyone can use while assessing their supply chain relevance
You have likely noticed that the common denominator throughout this article is the act of researching and comparing one’s supply chain to those supply chains that possess some best-in-class capability you aspire to develop or improve. Let’s face it; no one firm has solutions to all the problems plaguing contemporary business today. Moreover, no single firm has the time or resources to solve all of its problems, so practicing benchmarking can have a multiplying effect on your business. Benchmarking is an incredibly powerful tool, when practiced well, can create a path of least resistance to driving seismic-type results. Pick a capability, any capability you would like to improve, and then go to work researching supply chains that have refined it. Study their processes, experiment, and learn how they achieved their results. Throughout the process, ask yourself, did you discover any lessons learned, in other words, are there areas you should stay away from? No need to re-create the same mistakes experienced by others, and your strategy, when developed with this new knowledge, will be far less costly, happen more rapidly, and ultimately have a more profound impact than it would have otherwise. If the firm you are studying is not a competitor of yours, often times they are happy to assist you in a short discussion and walk you through their pathway of success. Just remember if someone is helping you, whenever possible, be sure to consider returning the favor to them one day.
Probably never before in the history of business has the supply chain discipline been more important than it is today. The speed of business is faster than ever before, and continues to increase at an alarming rate. The internet has compressed the size of the global marketplace, and as such, consumers, and consumer expectations continue to change, and in many cases their expectations are changing faster than business is equipped to respond. Leading firms operating within global markets develop capabilities that are agile enough to navigate these turbulent landscapes. With so many demands being placed on business today, it becomes increasingly significant that their supply chain remains a competitive and thriving enterprise. Naturally there are many ways to achieve terminal competitiveness, but practicing a simple benchmarking exercise is certainly is a good start to becoming and remaining a relevant supply chain. So remember, as you begin assessing, or simply refreshing your global supply chain strategy, don’t forget one of the simplest and most profound basics of business analytics – benchmarking.