Let's first have an insight into benchmarking before moving on to benchmarking of logistics management and supply chains

What is benchmarking?

Benchmarking could be defined as a systematic comparison of organizational processes and performances to create new standards or to improve processes. Benchmarking models are generally used to evaluate and compare performances between other similar entities.

A benchmark can be used for improving communication, to professionalize the organization/processes, or for budgetary reasons. Often performance measures are compared with previous measures from the same organization at different times. Though this may be a good indication of the rate of improvement within the organization, the scenario could be such that while the organization improves, the competition could be improving at a faster pace. Benchmarking can spur innovation and provide renewed focus on areas in need of improvement and provide a target to pursue.

Managing the ever-growing complexities and contradictions in performance is increasingly becoming the order of the day for many supply chain professionals across the globe.

General Benchmarking Methods

Broadly, there are four types of benchmarking methods:

Internal (benchmarking within a corporation - between business units)
In most large companies there are similar functions in different business units. One of the simplest benchmarking exercises is to compare these internal operations. The objective of internal benchmarking is to identify the internal performance standards of an organization. The main advantages being : (a) a significant amount of information sharing . (b) many organizations are able to obtain immediate gains by identifying their best internal practices and transferring those to other parts of the organization. (c) This internal knowledge can become the baseline for later investigation and measurement involving external benchmarking partners.

The disadvantage of internal benchmarking is that it may foster an introverted view, easily ignoring the fact that other firms have the edge. (Different business units are focused on outperforming internal rivals.)

Competitive (benchmarking performance or processes with competitors) Benchmarking can be done externally against competitors to compare companies functioning in similar markets with competing products, services, or work processes. . The advantage being; relative performances can be analyzed; the disadvantage - information is hard to obtain beyond what is available in the public domain.

Functional (benchmarking similar processes within an industry)
Industry benchmarking tends to involve comparisons between firms that share some common technological and market characteristics, and concentrates on specific functions. The big advantage of industry benchmarking is that it is easier to identify willing partners since the information is not going to a direct competitor.

Generic (benchmarking operations between unrelated industries)
This type of benchmarking focuses on best practices rather than business processes of a particular organization or industry. Some business functions or processes are the same regardless of dissimilarities of the industries. Generic benchmarking can be very effective even though it is generally the most difficult. It has the potential of revealing the best of best practices. It requires broad conceptualization and careful understanding of the generic process.

Let us look at a benchmarking platform

NetMarkers, an online benchmarking platform, claims to provide supply chain professionals an opportunity to share best practices and compare supply chain performance with others.

Based on the Supply Chain Operations Reference 6.1 model developed by the Supply Chain Council, NetMarkers has developed the Supply Chain Efficiency Measurement Architecture (SCEMA) to measure and monitor a supply chain more accurately and dynamically. The key value addition here is that SCEMA provides a framework to analyze the complexity of a supply chain in terms of its geographical expanse and operational functions.

NetMarkers launched the 2005 Lubricants & Paints Supply Chain Benchmarking program covering Asia-Pacific and Middle-East regions. The benchmarking research, which is based on proprietary SCEMA, covers innovative practices, HSE practices and laboratory and testing processes, in addition to all Level 1 and Level 2 supply chain processes and best practices as specified by SCOR 6.1.

Netscribes has launched the program in collaboration with Metanoia Consulting, a Mumbai-based management consultancy firm with domain expertise in the lubricants and paints industry.

Study Scope

The entire study is structured across three key modules and a best practices assessment framework, which are listed below:

Business Module

Source (Purchase and Inbound Logistics)

Make (Processing and Filling/Packing/Storage)

Delivery (Outbound Logistics, Supply and Distribution)

Support Module

Product Management (Grade/SKU Portfolio Management, New Product Introduction)

Facility Management (Maintenance, Management of Change)

Laboratory Management (Good Analytical Laboratory Practices)

System Module

Quality and HR Management

Plant HSE Management

Road Transport HSE Management

Innovation Management

Best Practice Assessment Framework

Plan Process (40 best practices — feedback questions)

Source Process (60 best practices — feedback questions)

Make Process (60 best practices — feedback questions)

Delivery Process (70 best practices — feedback questions)

The products covered in NetMarker’s study include lubricants, paints and coatings covering 24 countries in the Asia-Pacific (excluding Japan) and the Middle-East region, viz: China, India, Bangladesh, Sri Lanka, Pakistan, Taiwan, Hong Kong, Vietnam South Korea, Australia, Thailand, Malaysia, Singapore, Philippines, Indonesia, New Zealand, Iran, Saudi Arabia, UAE, Syria, Kuwait, Jordan, Oman, Bahrain and Qatar.

Tarachand Wanvari looks after the South Indian desk of Indian Television Dot Com Pvt Ltd. He is a Consulting Correspondent for Business Gyan. Feedback at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it \n This e-mail address is being protected from spam bots, you need JavaScript enabled to view it "

Issue BG58 Jan06

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