Supply Chain Benchmarking: Get the Gain Without the Pain - Early Experiences with the Benchmark

By Joe Francis -- Supply Chain Management Review, 4/1/2008

Previous page: The Challenges of Benchmarking

What are the lessons learned from development of the new SCORmark program? First, many companies have serious difficulty defining their supply chain for the purposes of benchmarking. Many believe they have “a” supply chain (or three or four or five…) when in fact they have a large constellation of supply chains. Using the SCOR supply chain definition matrix technique, companies can easily identify all of their supply chains by major project line/customer segment. They can then choose groupings of these to benchmark based on shared characteristics. I see this as becoming more deeply embedded in the benchmarking workflow because we designed the SCORmark system with the assumption that companies already did something roughly equivalent to identify supply chains.

Second, there is a huge variation in how much detail companies manage in their supply chain data. This became clear when we saw how long it took various companies to beta-test the benchmarking system. Here's a sampling of how long it took companies to gather and submit the necessary data for the benchmark tool:

• Company A: 6 hours
• Company B: 2 days
• Company C: 10 days
• Company D: 6 weeks
• Company E: Abandoned the survey because it was too difficult to get the data.

Now, these companies are in different industries with different levels of supply chain maturity. However, Company A had used SCOR for years, had standardized its operations around the model, and was able to easily pull its standard performance data for benchmarking. Company B also had used SCOR for years. The company had not standardized operations on SCOR metrics, but it did have metrics data that it used in SCOR programs. Company C had good operational metrics, but those metrics were not standardized. Company D had some operational metrics, not standardized. Finally, Company E simply had serious difficulty compiling any metrics. (We also suspect it had trouble in defining its supply chains for the purpose of benchmarking.)

Among the first 30-40 companies using SCORmark, we also saw similar variations in time-to-complete the exercise, with a skew towards taking several weeks to complete. Half our beta testers were relatively sophisticated SCOR users. Those users that had standardized on SCOR could quickly complete benchmark surveys and get frequent updates. That is the ideal situation.

Benchmarking a supply chain clearly can help companies determine their relative performance and shore up operations to stay competitive. But until recently, conducting effective benchmarking quickly and cost-effectively was a monumental task, one that consumed big budgets, patience, and time. The biggest hurdle was coming up with standard ways to compare one company's operations with another's in order to make “like-for-like” comparisons. The SCORmark system has done the heavy lifting of defining those standards. It's now becoming far easier for manufacturers and their supply chain partners to determine whether they're keeping pace and what they need to do about it.

Supply chain benchmarking doesn't have to a complex, costly undertaking. Early adopters of SCORmark have proven that convincingly. If you're looking for a relatively pain-free—yet effective—way of benchmarking your supply chain activities, SCORmark could be right for you, too.

Gaining Access to SCORmark

The SCORmark benchmarking tool itself is available only to members of the Supply-Chain Council (SCC). The cost to join the SCC is $3,000 for a company in one region, for example the United States; $5,000 for companies in multiple regions; and $600 for academics. There are no restrictions on the number of individuals within a company who can log into the tool.

Non-members can view the 2007 benchmark results, but again must be members to participate.

The Supply-Chain Council plans to introduce a half-day benchmarking tutorial in 2008 to be presented around the country. The session will be open to members and non-members alike.

For more information, visit www.supply-chain.org

Sources: Poluha, Rolf G. Application of the SCOR Model in Supply Chain Management. Youngstown, NY: Cambria Press, May 2007.

In this article:

• Introduction
• Some Basics of Benchmarking
• The Challenges of Benchmarking
• Early Experiences with the Benchmark

Resource Center