Benchmarking is the practice of accepting inherent company weaknesses which place it at a disadvantage against its competitors who are better performers in the same industry and the willingness to learn from them to strategically steer the learning organization to surpass its rivals.
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These are applied at the strategic, tactical, and operational levels. Benchmarking is applied in the supply chain activities that range from raw materials, production, to the end consumer. Several companies use the concept of benchmarking to ensure sustained sales and economic growth, continued expansion, and profit maximization. Among these companies is Unilever.
For Unilever to continually maintain and improve its position and beat its rivals in the current competitive global economic climate, it must focus and apply benchmarking in its manufacturing and supply chain activities. It must be innovative and should integrate new technologies to improve productivity, its performance, the quality of its products, and other supply chain activities. Such breakthrough innovations and improvements have been achieved by integrating a number of critical factors.
The company continuously takes measurements of its current supply chain activities, draws comparisons with her key competitors, and learns from her competitors’ supply chain activities in their supply chain management processes. It then continuously integrates the best options when initiating improvements that bring about sustained growth which put the company at a competitive advantage against its rivals.
These changes must be applied in line with its stated objectives according to my strategic plan to benchmark Unilever’s supply chain activities.
The five stage benchmarking process involves planning, searching, observing, analyzing, and recommendations for adapting new changes. The benchmarking process could cover aspects such as the company’s products, technical, financial, performance measures, strategic plans, and functional activities.
Problems identified with Unilever’s supply chain activities include the company’s product pricing strategies, lack of product substitutes, and unstructured maintenance of supply vehicles.
When benchmarking the company’s supply chain activities, the organization must identify the critical success factors employed by competitors, integrate those factors in its supply chain activities, maintain a comprehensive documentation of the benchmarked activities, and develop performance measures to ensure standards are met in the supply chain activities.
Once the company has searched for benchmarking partners, Unilever’s executives will set to closely observe how competitors conduct their supply chain activities. Observations thus made should be clearly documented to identify best practice elements in the process.
These steps are followed by conducting a gap analysis to identify the discrepancies that lead unilever to loose its hold to its core competitors. The actual causes of the discrepancies need to be established and possible solutions identified and a strategy plan initiated to implementing the changes.
Several alternatives may be realized in the process. The need to select the best strategy among the alternatives is vital as the choice comes with a variety of benefits. In the process of adapting these changes, Unilever’s operating conditions play a vital role in determining the best approach to be employed by its executives to implement the changes.
Among the factors to consider include the size of the company, the number and size of its suppliers, its sales volume in a given financial period, and the extent to which it has focused its procurement. The learning organization could gain by incorporating the need to continuously benchmark its supply chain activities to place it a competitive edge against its rivals.