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Benchmarking, being a decision-making technique, can go a long way in making an organization gain competitive advantage over competitors. This is significant because benchmarking ensures sharing of information in an organization by simplifying operations and performance. Benchmarking can help an organization become efficient through various methods. However, the whole process does come with its challenges.
Two stage Benchmarking Methodology
A two-stage benchmarking method is beneficial for an organization. This technique uses performance evaluation metrics followed by continuous improvement metrics in aiding an organization achieve the needed competitive advantage. In performance evaluation, the performance of the benchmarked company provides a standard for evaluation with other competitors.
For example, Capstone Logistics may look at how to incorporate proper technology to manage its needs and make the best choice for its transportation needs. Thus, this will confirm what the competitors do to select the best choices to achieve the goals, and if possible be dominant (Murray, 2010). All the parameters in performance evaluation have to be factored. For instance, issues like partnerships, analysis of buyers or suppliers and even relationships of the organization are issues that are thoroughly considered.
Partnership evaluations help in cementing supply chain systems thus facilitating organization’s strategic goals. The partnership evaluation parameter can be noted in the level of support involving major organizational issues. This parameter can aid in identifying and solving complex problems.
Another aspect of performance is delivery performance analysis. Here, the lead-time is critical as the time the deliverables reach their respective target is assessed. In this case, on-time delivery will inevitably suggest that ideal distribution has been achieved. Delivery also has another feature that borders on the capacity of what has been on transit. Capstone Logistics therefore considers alternatives that influence supply chain such as speed of vessels, dependability of driver and location depots.
This analysis increases efficiency leading to a decrease in portfolio levels (Novich, 1990). Continuous improvement can also boost a firm’s principal value. It is therefore expected the supply chain management continually improves on efficiency. However, Lee and Billington (1992) recognize that benchmarking logistics staging cannot complete adeptness if different facets of the supply chain track objectives autonomously.
Continuous improvement also complements the performance evaluation metrics since it also takes in the other arising issues. It considers the grey areas that are arising.
This could further the advances in technology that are more effective than the previous ones. This new technology, when incorporated, increases effectiveness and efficiency in an organization (Murray, 2010). For example, improved data mining could do well towards all the company roles. Capstone Logistics for example, has a system that allows users to access the system and validate the model.
Though benchmarking may contribute to the body of knowledge, it is essential for an organization to understand why clients are attached to it. For example, DHL does recognize that its customer loyalty arises out of efficiency and effectiveness of its operational process.
Analytical method thus serves to give an order of fixing what to benchmark. An analytical analysis helps to assess issues such as process selection, clustering of the different customer wants and may include value chain for benchmarking. AHP was initially quite helpful in measuring the service quality of many organizations.
However, the analytical method has failed in measuring the quality of a single organization. It is worth noting that organizations face different dynamics. Thus, it is wise to ensure that valuable quality of service of a single organization is established to assist in measuring customer satisfaction and other parameters, which are difficult to quantify. For example, AHP attempts to address judgmental and psychological information that may be difficult to quantify.
An organization should take up a process improvement initiative with the zeal to achieve results (Murray, 2010). Many organizations take up initiatives with the opinion that only the customer benefits and thus fail to reap the fruits of a whole process improvement initiative. Quality improvement aims at benefitting both the client and the organization.
An effective model is also that which incorporates the staff. AHP can be a model used for evaluation and comparison but also used to increase the benefit. It is a better model if it incorporates staff so action plans expected can encourage competitiveness. That is, complete satisfaction and participation of the team ensures success of the model (Murray, 2010).
3PL plays an essential role in successful benchmarking approach. Capstone Logistics has implemented 3PL solutions that produce several key roles.
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This has helped improve the process, reduce operational costs as well as aid in implementation of sustainable best practices. It has also helped in time optimization besides providing a platform through which the management system can draw information to aid in decision-making. Capstone Logistics uses the 3PL technique to provide transportation intelligence, track shipments and manage carriers among others.
Benchmarking logistics performance is critical to achieving an organization’s success. This is because it goes deep into critically analyzing all the organization’s value drivers thereby achieving the general success of that organization.
Lee, H. L., and Billington, C. (1992).Supply Chain Management: Pitfalls and Opportunities. Sloan Management Review, 33, Spring, 65-73.
Murray, M. (2010).Benchmarking in the supply chain.New York: NY, New York Times press
Novich N. (1990).Distribution strategy: Are you thinking small enough? Sloan management Review 32 (1) 171-77