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Business
Performance
An Executive Guide to
Performance Benchmarking
How to provide best-in-class service
and halve supply chain costs
Measure to improve
A healthy supply chain is fundamental
for business success. If not a
revelation, it is a realisation that has
well and truly dawned for companies
of the recession generation. Whilst the
world has certainly got much smaller,
it has also become more complex,
which means a real understanding of
your supply chain is ever more critical.
Making big decisions without full
understanding of your supply chain
is obviously a very risky business.
Performance benchmarking allows
Quantify the size of the prize - the real financial benefits you can gain
Identify how to deliver the perfect order - the ultimate measure of customer service
Why do it?
There are a number of very good reasons
to benchmark yourself against the
competition but chief among them is
establishing where the bar really is. Of
course if you aspire to be the best, you
need to know what the best looks like.
To use a simple sporting analogy, if you
intend to be the fastest man in the world,
you know you have to beat Usain Bolts
100m time of 9.58 seconds. It is an
unambiguous goal.
Benchmarking your performance is
critical if you want to defend or improve
your competitive position. And of course,
once you have made gains, it then
becomes a useful sales tool - being able
to demonstrate you are one of the top
performers in your sector has got to be
good for business.
Industry sector
1. The data used has been collected over many years; it is comprehensive,
robust and regularly refreshed
2. The Oliver Wight database includes nearly 1,000 organisations from
across the globe
3. Performance Benchmarking is tailored to your organisation - the
analysis is made against organisations with comparable supply
chains to your own, and you can specify which types of organisations
you want to be benchmarked against, although of course, we
never reveal the names of the companies in the dataset you have
selected
4. You enter your own data so the results are based on your own real
life and current information
Engineering
Retail suppliers
Computers and electronics
Office equipment
Industrial suppliers
Retailers
Pharmaceutical and hospitals
Chemicals and plastics
Clothing
Who is it for?
Oliver Wight Performance Benchmarking
is a must for any organisation that wants
to improve its supply chain performance.
It is suitable for any business in any
sector, as long as it has a complete endto-end supply chain system, from order
to delivery. It is most useful for mid- to
large-sized companies.
What do I get?
The Performance Improvement Report (PIR)
Your Performance Improvement Report (PIR) provides a detailed evaluation of your
supply chain performance, relative to those in your chosen data set. The following
pages show just some of the things it includes.
Dark blue area outlines the spread of other supply chains positions on the chart
FIG 2. Strategic cost and service relationship
This chart shows the performance of Company X relative to the organisations within
its chosen dataset. The dotted line denotes the trajectory of best-fit performance of
service related to supply chain costs for the group dataset. For Company X, there is
improvement potential for both service and cost.
X-axis: Service driven by SIFOT; DIFOT, inventory accuracy; perfect order ratio etc.
Y-axis: Cost driven by cash-to-cash cycle; supply chain cost silos; stock turns etc.
Warehousing
Outbound transportation
Customer service
Variable costs including management staff, overtime and casual labour, postage,
telephone, fax and power etc
The performance of Company X is shown by the blue bar (3- <4%). 85% of supply
chains in the comparison group have lower costs than Company X for the warehouse
function and only 6% have lower costs.
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The grey arrows show where Company X achieves parity, or close to parity, with its
peer group and the yellow arrows indicate where there is a significant improvement
opportunity. For Company X, Perfect Order Probability is below the average
(Parity) for its peer group and well below best-in-class (Advantage) in its group.
The company has a particular weakness in inventory availability, which is recorded
at just 80%.
The blue flags denote the performance of Company X. It has an excellent in full
delivery performance of 99 per cent, but on time delivery and stock turns are only
average (Parity) compared to its competitors.
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$
$
$
$
$
$
$
$
In this real life example of a food manufacturing company, Oliver Wight Performance
Benchmarking has identified a potential gain of $8.79 million in supply chain costs,
plus a further $2.70 million in other costs, for a single decile improvement in overall
supply chain performance.
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Inspiring
Business
Performance
Oliver Wight has a 40 year track record of delivering business improvement
to some of the worlds best-known organisations. We believe that sustainable
improvement can only be made through your own people. So unlike other
consultancy firms, we transfer our knowledge to you, which means you can
achieve performance levels and financial results that last.
At the leading edge of management thinking and
practice, our Integrated Business Planning (IBP)
model lies at the heart of our clients journey
to outstanding business performance. Oliver
Wight originated Sales and Operations Planning
in the 1980s and IBP can most simply be
described as advanced S&OP; evolving from its
production planning roots over 40 years into the
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The information contained is proprietary to Oliver Wight International and may not be modified,
reproduced, distributed or utilized in any manner in whole or in part, without the express prior written
permission of Oliver Wight International.