The Current and Future Value of Benchmarking

This is an excerpt of the original article. It was written for the January-February 2017 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2017

Transformation is a topic that comes up in almost every conversation I have with supply chain managers these days. Executives from companies as diverse as J&J Vision Care, the division of Johnson & Johnson that manufactures contact lenses, and Thrive Markets, a startup selling health and wellness products to its members, have talked about how they have had to remake their supply chains to meet new customer demands. Transformation is also the theme of this issue of SCMR.

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Benchmarking is a well-known tool for comparing the performance and practices of a business entity against those of others.

Successfully implementing benchmarking canresult in benefits for an organization, including:

• facilitating comparisons across business units;
• accelerating restructuring and change;
• encouraging innovation;
• enabling objective comparisons; and
• improving productivity and quality

Although benchmarking presents the opportunity to obtain rich and beneficial information, organizations may not be making full use of this tool. To better understand how organizations are using benchmarking and the results of their efforts, APQC conducted a survey of 319 respondents representing a variety of industries and organizational functions. Nearly 19% of those survey respondents indicated that their roles are within a supply chain function, which APQC defined as the logistics, operations, supply chain planning, manufacturing and procurement functions of an organization.

APQC then compared the benchmarking practices of supply chain functions against the practices of all other types of organizational functions. The results indicate that supply chain functions have integrated benchmarking into their decision-making and improvement efforts more so than other functions but they have room for improvement when it comes to identifying the financial impact of benchmarking and involving more employees.

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