admi 2009 trends in supply chain bench marking survey

8/9/2019 ADMi 2009 Trends in Supply Chain Bench Marking Survey

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C o p y r i g h t A u t o D i v e r s i t y M a n a g e m e n t I n c . ( A D M i )

2009 Trends

in Supply Chain

Benchmarking

AutoDiversity Management inc.

(ADMi)

Supply Chain Consulting

Research White Paper Series

October 2009


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2009 Trends in Supply Chain Benchmarking

C o p y r i g h t A u t o D i v e r s i t y M a n a g e m e n t I n c . ( A D M i ) P a g e | 2

TABLE OF CONTENTS

Table of Contents .......................................................................................................................................................... 2

Editors Note .................................................................................................................................................................. 3

2009 Trends in Supply Chain Benchmarking: Introduction ......................................................................................... 4

Methodology & Purpose | ......................................................................................................................................... 5

Respondent Profile | ................................................................................................................................................. 5

2009 Trends in Supply Chain Benchmarking: Results .................................................................................................. 6

Business Profile & Supply Chain Spend | ................................................................................................................... 6

Question 1: What is your primary business category? .......................................................................................... 6

Question 2: What is your organization's annual supply chain spend? .................................................................. 8

Current Engagement & Views on Benchmarking | .................................................................................................... 9

Question 3: Does your organization currently participate in benchmarking programs? ...................................... 9

Question 4: What type of benchmarking is currently performed? ....................................................................... 9

Question 5: What type of benchmarking will your organization be considering in the next 12 months? .......... 11

Perceived Benefits of Benchmarking | .................................................................................................................... 12

Question 6: Please rate each supply chain category by how likely they are to benefit from benchmarking

activities? ............................................................................................................................................................. 12

Advantages & Complexities of Benchmarking | ...................................................................................................... 13

Question 7: Given your experience, what were the positive results achieved in previous benchmarking

activities? ............................................................................................................................................................. 13

Question 8: Given your experience, what were the primary difficulties experienced when participating in

previous benchmarking activities? ...................................................................................................................... 14

Data Sharing & Benchmark Timing | ....................................................................................................................... 15

Question 9: In your opinion, how easy is it for your supply chain organization to generate and sharequantitative performance data that might be used in benchmarking programs? .............................................. 15

Question 10: In your opinion, what time of year is most appropriate for your supply chain organization to

participate in benchmarking programs?.............................................................................................................. 17

Concluding Analysis .................................................................................................................................................... 18

About Us & Contact Information ................................................................................................................................. 20


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EDITORS NOTE

October 16, 2009

At the beginning of 2009, we were approached by several clients

wanting to discuss benchmarking and other collaborative performance

measurement methods. The level of interest was so much higher and

the questions being asked were so much more externally focused than in

the past few years that we decided to undertake this study to better understand how

organizations viewed and used benchmarking in this current economic climate.

The study was meant to be brief and precisely focused and was designed in the

form of a 10 question survey distributed online to a targeted list of supply chain

professionals. Although the brevity of the survey indicated that the results would merely

be a temperature check of current opinions on the subject, we found that the responses

yielded much richer results and correlations than initially anticipated.

Although benchmarking enjoys a healthy adoption rate, a full 39% of respondentsdo not currently participate in any benchmarking activity. With future adoption rates

indicating that benchmarking activity will be getting deeper and broader in the next 12

months, those choosing not to participate in some form of benchmarking may find it

difficult to identify, and take advantage of, the gains achieved by their competitive sets.

Most interesting was the difference found between participants opinions regarding

the ease of internal data collection and the perceived lack of comparable data points as

a barrier to achieving benchmarking benefits, as well as how the respondents viewed

the value of cost management in relation to actual benefits achieved through

benchmarking .

Thank you to all the respondents that made this study possible and I hope that you

find the results as interesting and useful as we did.

Marc A. Brazeau

Principal

AutoDiversity Management inc. (ADMi)


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The question we hear

how do we evaluate

supply chain

performance and cos

structure in relation to

corporate efficiency a

goals?

2009TRENDS IN SUPPLY CHAIN BENCHMARKING:INTRODUCTION

Current economic instability has required companies to identify ways to reduce

overall costs while improving organizational productivity and performance. As Global

supply chain networks recover from the whipsaw swing between the under-capacity of

just a couple of years ago and the over-capacity experienced today, many companiesare more focused than ever on the cost effectiveness and performance of the supply

chain to drive overall corporate efficiency. The question we hear is, how do we

evaluate supply chain performance and cost structure in relation to overall corporate

efficiency and goals?

AutoDiversity Management Inc. (ADMi), recognizing the demand for insight into the

strategies and tactics that enable supply chain improvement, performed a global cross-

industry review of client opinions on the use of benchmarking as a tool to improve

supply chain transparency, performance measurement, and business development

opportunities.

As global markets concentrate on rebounding, it is crucial that cost saving activities

be identified and acted upon without hesitation. Solid, relevant data is required to

establish robust processes in order to maximize supply chain network performance and

ensure organizations are well positioned for the economic resurgence.

And, as we look to the inevitable recovery of our industry, its time to focus on a

new theme: Collaboration, and the challenge of how we, as supply chain professionals,

identify, capture and institutionalize the communication and cooperation best practices

developed throughout this economic crisis and whether collaborative benchmarking is

an effective tool to accomplish that.

Because of the participant involvement in the program development; identifyingperformance dimensions for studies, agreeing on data collection requirements,

promoting the development of standard metrics and encouraging the transfer of best

practices within the industry, collaborative benchmarking provides effective

performance comparisons that promote overall improvements in the supply chain

without eroding competitive advantages of the participants.

The cornerstone of effective collaborative benchmarking is relevant and reliable

data producing truly actionable items for tactical or strategic implementation.

Effectiveness is further enhanced when participants agree to blind the data, making it

impossible to identify a specific participants responses and ensuring complete

transparency, which produces high value results that can be used to develop baselineperformance comparisons and indices.

This study aims to provide valuable insight into the current uses of benchmarking as

an integral management tool in 2009, the perceived benefits and barriers to

participating in benchmarking initiatives, and the opportunities that benchmarking can

offer the supply chain industry in 2010.


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Methodology & Purpose |

ADMi conducted the 2009 Trends in Supply Chain Benchmarking survey during the

months of July and August of 2009, distributing the questionnaire to 1,941 supply chain

leaders across six industries. Participants were asked to gauge supply chain and

benchmarking activities within their organizations. Survey responses were collectedover a 4 week period then analyzed and summarized at an aggregate level.

The 2009 Trends in Supply Chain Benchmarking survey provides a comprehensive

picture of industry benchmarking involvement and opinions as well as an analysis of

when and where some of the largest industry players want to focus future study efforts

that yield tangible benefits.

With this in mind, a series of questions was devised to determine whether

respondents:

currently participate in benchmarking programs, the types of benchmarking pursued or that they are interested in

pursuing,

how benchmarking benefits their organization, the strengths and weakness of benchmarking studies, the potential for data sharing and, the importance of timing for performing and participating in

benchmarking activities.

Respondent Profile |

Survey participants were drawn from six global industries, all of which rely heavily

on supply chains. Contributors were identified via trusted and direct sources; either as

existing clients, known colleagues or recognized decision makers that expressed interest

in participating in the survey. Selection criterion was vital to ensure meaningful survey

data for analysis.

Respondent profiles include:

83% at or above responsible managerial positions, with 56% at thedirector level and above.

Responses from North America, the United Kingdom, the EuropeanUnion, the Russian Federation and China.

59% considered purchasers or consumers of transportation services,with remaining 41% representing logistics service providers (LSPs).

All modes of transportation (truck, rail and vessel) and several services(port/terminal operations, freight forwarding, third party logistics

providers and freight processors) are represented.


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2009TRENDS IN SUPPLY CHAIN BENCHMARKING:RESULTS

Business Profile & Supply Chain Spend |

Question 1: What is your primary business category?

The opening question profiled the primary business interests of respondents. As

depicted in Figure 1, the Automotive (54%) and Transportation (23%) industries are

chief respondents. General Manufacturing and Energy & Petro (8% each), Chemical

(4%) and Technology (3%) make up the remainder of the study.

Figure 1 - Primary Business

Additionally, respondents from within the Automotive community covered both

original equipment manufacturers (OEMs and Tier 1 suppliers) and service providers not

elsewhere classified as Transportation, such as port and terminal operators and non-

transportation supply chain service providers. Therefore, 72% of the Automotive slice IS

made up of OEMs with the remaining 27% coming from industry specific service

providers. (Figure 1a Automotive Breakdown)


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The study has an

equitable distribution

purchasing decision

makers and supply cha

operator respondent

Figure 1a - Automotive Breakdown

Furthermore, the Transportation sector includes logistics service providers, third

party logistics concerns and transportation brokerages and International freight

forwarders. The Technology sector includes information systems and technology

providers to the overall supply chain industry.

Although overall response rates are slanted towards the automotive industry, the

crucial dimension of this profile is the equitable distribution of responses from supply

chain purchasing decision makers (59%) and logistics service providers (41%), providing

a very balanced opinion base for the remaining study questions. (Figure 1b Purchasers

vs. Providers)

Figure 1b - Purchasers vs. Providers


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Findings validate th

importance of

capitalizing on any re

engineering benefits

resulting through

benchmarking

Question 2: What is your organization's annual supply chain spend?

Feedback on the next question establishes the significance of the yearly spend on

supply chain operations. Regardless of an organizations budget, if supply chain costs

apply, they represent a significant overhead. A strong and equal representation from a

range of businesses - this question applied mostly to the 59% of service users - revealed

the importance of this considerable outlay on an organizations bottom line and

therefore the indisputable opportunity it provides to realize savings.

Figure 2 - Annual Supply Chain Spend

The survey confirms that over 70% of respondents have a budget greater than $10million and of these a quarter have a budget over a billion.

The 56% of respondents with annual supply chain expenditure over $100million are

ideally placed to benefit from quick-win savings revealed through benchmarking, mainly

attributable to the scope of their spend activity.

The significance of efficiencies on the supply chain outlay is further emphasized by

the finding that only 15% of respondents reported no such spend. Although this slice,

representing physical transportation service providers, doesnt technically have a

transportation spend, these respondents are likely to gain by follow-on efficiencies

identified around productivity and network design.

The findings validate that, regardless of actual spend, the proportion of achievable

savings bears out the importance of capitalizing on any re-engineering benefits resulting

through benchmarking or any other comparative study method.


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This response

demonstrated suppo

or benchmarking and

commitment to

identifying real

performance

improvements

Current Engagement & Views on Benchmarking |

Question 3: Does your organization currently participate in benchmarking

programs?

This response demonstrated support for benchmarking and a commitment toidentifying real performance improvements.

The response to question three indicates a readiness within the industry to

capitalize on the gains that benchmarking programs deliver. With just under two thirds

of the respondents currently engaged in such exercises, the extensive benefits of these

programs have been recognized by the industry; however, there are still a significant

number of players that have yet to fully realize the benefits that are accruing to their

competitive set. (Figure 3 Current Benchmarking Engagement)

For those 39% not currently engaged in benchmarking activities, consider what

these organizations are missing out on in terms of improvements and where they fit in

with competitors now and in the future. If current benchmarking program adherence

continues to increase in depth and scope across the industry, as time goes on, those

organizations choosing not to participate in benchmarking programs may be put at a

significant disadvantage in establishing best practices and influencing industry policy.

Figure 3 - Current Benchmarking Engagement

Question 4: What type of benchmarking is currently performed?

Further to the preceding question, the survey explored the types of benchmarking

engaged in and, where there is engagement, it found that the studies performed to date

were not truly holistic in their approach. Narrow dimensions are chosen for studies

based on specific needs rather than amalgamated to create a comprehensive

understanding of the correlation that exists between the multiple dimensions that make

up high performing supply chains.


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Overwhelmingly the

survey found that the

focus of benchmarkin

studies has been on

specific business

processes

The survey outlined the 5 types of benchmarking most commonly used:

Strategic: Observing competitive advantages or disadvantages incommon or uncommon groups

Process: Identifying and observing specific business processes toidentify best practice

Functional: Focusing on a single function to generate specificoperational improvements

Performance: Assessing an organizations competitive positionthrough specific performance dimension comparison

Product: Designing new products or upgrading current ones, thisincludes reverse engineering of competitive products

Figure 4 - Type of Current Benchmarking

Operational elements were analyzed separately rather than studies that capture

the wider impact on overall delivery. (Figure 4 Type of Current Benchmarking)

Overwhelmingly the survey found that the focus of benchmarking studies has been

on specific business processes.

Fifty-nine percent of respondents preferred to focus their attention on process

improvement and the identification of best practices. Naturally companies that improve

processes and network performance in an economic downturn will be well positioned to

take advantages of an upturn in the economy.

The performance of the supply chain network was a close second, with 49% of the

respondents replying that they would like to assess their competitive position within the

market by comparing specific performance metrics.

While many companies indicate an inability to strategically plan and set a course for

their supply chain organization, 46% of the respondents recognize the importance of

strategic benchmarking to identify advantages and disadvantages in their supply chain

network.


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Benchmarking initiati

are on the rise across

areas of the industr

Question 5: What type of benchmarking will your organization be considering

in the next 12 months?

In order to generate meaningful responses, the question regarding planned

benchmarking covered only programs planned for the next 12 months. The responses

confirmed that benchmarking initiatives are on the rise across all areas of the industry.

(Figure 5 Planned Benchmarking)

Figure 5 - Planned Benchmarking

Comparing the findings from this question to those of the current benchmarking

engagement statistics in question 4, we find, surprisingly enough, that Product

benchmarking seems to be poised for the biggest gain in adoption, with Functional a

close second (Figure 5a). This is an interesting finding because both of those types

require greater detail and technical proficiency to perform, which may imply that current

benchmarking practices are indeed evolving, as previously thought, into deeper and

broader areas of study and geared more towards technological advancements in supply

chain management systems and equipment R&D (Product), as well as the organizations

ability to synthesize the benefits of those advancements into workload productivity

(Functional).

Figure 5a - Current and Planned Benchmarking Variances


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Organizations vary on

mildly in terms of whe

they feel the greates

benefit is achieved an

as a whole the industry

very much in harmon

when stipulating

benchmarking benef

requirements

Perceived Benefits of Benchmarking |

Question 6: Please rate each supply chain category by how likely they are to

benefit from benchmarking activities?

Survey participants gauged supply chain performance dimensions as to whichaccrue the greatest benefit from participating in external benchmarking studies.

Respondents rated benchmarking benefits for each supply chain category on a scale

ranging from 1 to 4: 1-Unlikely, 2-Somewhat Likely, 3-Likely and 4-Highly Likely.

Based upon feedback, benefits accrued fairly consistently across each performance

dimension. In fact no category scored below the midpoint demonstrating that a

corporations individual benchmarking aspirations are closely shared by competitors and

colleagues alike. (Figure 6 Benchmarking Benefits by Supply Chain Category)

Organizations vary only mildly in terms of where they feel the greatest benefit is

achieved and as a whole the industry is very much in harmony when stipulating

benchmarking benefit requirements.

Figure 6 - Benchmarking Benefits by Supply Chain Category

Cost Management obtained the highest rating at 3.3, network design and

operations averaged 3.00, with systems, organization, and strategy all falling between

2.77 and 2.82. This information confirms the current economic landscape indicating

that supply chain organizations are focused on overall cost reduction to ensure a

competitive edge and be ideally positioned for an economic turnaround tomorrow.

Respondents agree that companies need to re-evaluate organizational structures

and processes ensuring these are robust and capable of reacting quickly to changes in

the marketplace. Benchmarking is an ideal mechanism for rapid evaluation and to

indicate where tactical changes can be achieved in terms of both quick-wins and long-

term improvements.

By identifying tactical actionable items through like competitor benchmarking,

network design and operations not only benefit from improved service levels, but the

achievement of reduced operating expenses provides immediate cost benefits to the

organization and can engender a baseline roadmap for long-term strategic planning.


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Although organizatio

value cost reduction

highly there is an

understanding that th

can only be repeated

measured and improv

upon through the

implementation ofeffective long-term

governing strateg(ies

Advantages & Complexities of Benchmarking |

Question 7: Given your experience, what were the positive results achieved in

previous benchmarking activities?

Survey feedback highlighted the positive results that customers of benchmarkingprograms have achieved through past studies. (Figure 7 Positive Results of

Benchmarking)

Figure 7 - Positive Results of Benchmarking

The top three positive results from benchmarking activities are:

Provision of a performance baseline (62%), Provision of a competitive ranking alongside similar companies (59%),

and

The generation of cost savings initiatives (54%).That the provision of a performance baseline is seen as the most significant

outcome emphasizes the importance of a roadmap to ensure sustainable competitive

ranking and on-going cost savings amongst other results.

As highlighted in the Benefits section, although organizations value cost reduction

highly, there is an understanding that this can only be repeated, measured and

improved upon through the implementation of an effective long-term governing

business strategy.

Respondents value the baseline and competitive ranking as they provide an

assessment of current supply chain operations and comparison against competitors. In

this manner participants can evaluate whether they are champions (top performers) or

challengers (low performers) in a particular study dimension. This either validates past

supply chain strategy or provides valuable data to develop a strategy improvement plan.

Effective benchmarking studies also determine which dimensions are strategically

important to an organization and whether these operations support company goals,

which may not always be aligned.


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Although respondent

were fairly satisfied wi

past studies, they

werent entirely satisfi

with the identification

specific actions to

improve performance

Respondents recognized that the key to an effective supply chain organization is

controlling existing cost structure and knowing the competitive advantages the

organization possesses alongside any weaknesses that may pose a risk. Equally it is

crucial that the organization be able to identify and implement actionable items to

reduce cost.

It appears that although respondents were fairly satisfied with past studies, they

werent entirely satisfied with the identification of specific actions to improve

performance (only 46% ranked this as a positive result). The identification of mining

gaps was also ranked at the lowest of the positive results at only 31%. These last two

points support one of the top weaknesses identified in past studies that data can be too

high level lacking the required detail to identify mining gaps in organization or pinpoint

actionable items that impact performance.

In addition to the responses contained in Figure 7, the survey also polled

respondents for any additional benefits they felt were generated by these programs. Of

all those surveyed only one respondent felt that no benefits were achieved. Whereas

the following gains to their organization were reported by multiple respondents:

Education of staff, Improved forecasting accuracy, Identification of new potential markets, and Illustration of potential for change without upsetting status quo.

Question 8: Given your experience, what were the primary difficulties

experienced when participating in previous benchmarking activities?

To ensure a program of continuous improvement in benchmarking operations, the

survey sought to gather information on the greatest challenges, weaknesses ordifficulties that respondents had encountered on previous benchmarking programs.

Figure 8 - Challenges of Benchmarking

A lack of comparable data was by far 69%- the most frustrating shortcoming of

past studies. The apparent inability to compare like-for-like data, performance,

processes or networks seriously compromises the results of the study restricting the

participants ability to validate network performance.


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Despite overwhelmin

respondent support fo

benchmarking studies

(they) need to produc

valid and weighted

comparisons which

generate actionable

items and deliver theopportunity for

quantitative performan

improvements

Another important weakness highlighted was that benchmarking results are

frequently perceived to be too high-level to be effectively acted upon (36%). Further to

this, many respondents viewed benchmarking studies as a time consuming (33%)

activity, likely due to the time required to clarify and synthesize data. The lack of

experience in some companies conducting supply chain studies may add to the

frustration of participants having to explain processes and network operations to ensure

a valid comparison is conducted.

Despite overwhelming respondent support for benchmarking studies (only 5% felt

there was no value) there is a clear recognition that these studies need to produce valid

and weighted comparisons which generate actionable items and deliver the opportunity

for quantitative performance improvements.

Excluding data comparison, the other challenges are statistically low barriers to

benchmarking participation. Comparatively, the Positive Results illustrated in Figure 7

confirm that participants feel the positive outcome of these far outweighs drawbacks.

In addition to the responses contained in Figure 8, the survey also polledrespondents for additional challenges encountered during benchmarking programs.

Difficulties included the following:

Funding, A reluctance to share confidential information, Difficulty in obtaining data from specific regions (Japan was

highlighted),

The lack of a common language or definitions within the industry, and The impetus for change needs to come from the client (LSP do not

necessarily feel the need to change).

Data Sharing & Benchmark Timing |

Question 9: In your opinion, how easy is it for your supply chain organization

to generate and share quantitative performance data that might be used in

benchmarking programs?

A companys ability to react and quickly gather detailed data to participate in

benchmarking studies brings with it a strong competitive advantage. Companies that

have data readily available demonstrate a firm understanding of their network

performance and cost structure alongside the ability to develop tactical and strategic

plans to improve their performance.

Repeatedly the importance of this data for benchmarking has been raised: 69% of

respondents rated a lack of comparable data the most frustrating shortcoming in Figure

8. Respondents were polled to gain an understanding of the realities of information

sharing.

As illustrated in Figure 9, data gathering activities for benchmarking studies was

rated as follows:

Very Easy for 11% of respondents,


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67% of organizations a

currently in a strong

position to participat

and benefit from

benchmarking studie

that produce timely,

detailed and actionab

results

Easy for 18% of respondents and, Somewhat Easy for 38% of respondents.

Feedback demonstrates that 67% of organizations are currently in a strong position

to participate and benefit from benchmarking studies that produce timely, detailed and

actionable results. This is significant when correlated to the results of question 8

regarding perceived challenges, namely an overwhelming majority feel the lack of

comparable data leads to poor outcomes in benchmarking, and yet this similarly strong

percentage of respondents is reporting that internal data collection is somewhat easy

or better. How do the data comparisons get lost between internal and external analysis?

And more importantly, why is it so difficult for an industry that measures so much, and

in such common detail, to properly establish comparative definitions?

Another drawback identified by the study that can be compounded by data collection

difficulties was the time consuming aspect of participating in benchmarking studies.

When a company struggles to gather quantitative data, protracted manipulation of the

data may be required to synthesize it for the study to be truly meaningful. Lengthy

analysis may unfortunately lead to frustration and dissatisfaction in participating inbenchmarking studies or, when the conclusion is rushed, in the significance of the

generated study results.

Figure 9 - Ability to Share Corporate Data

Organizations that struggle with detailed data gathering may find themselves at acompetitive disadvantage if they cannot fully grasp the impact of change on the supply

chain network or its cost structure. These companies may struggle to improve their

networks and become more competitive in the marketplace.

Companies that excel in information gathering appear to have strong system

support to maintain and retrieve crucial data quickly and accurately. Those with data

readily available appear to be at an advantage with a greater capacity to develop

strategies to improve performance and monitor progress.


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The first quarter is

preferable for data

collection.so that

results are delivered a

actionable items appl

during the third quar

Question 10: In your opinion, what time of year is most appropriate for your

supply chain organization to participate in benchmarking programs?

Although there doesnt appear to be a preferred time period during which to

participate in benchmarking studies, respondents sent a clear message that the 4th

For the majority of respondents (38%), the timing is irrelevant, whereas: 23%

preferred the first quarter, 15% preferred the second quarter, and 21% preferred the

third quarter.

quarter was to be avoided.

Figure 10 - Timing of Benchmarking

Ideally the first quarter is preferable for data collection, allowing for synthesis and

analysis to occur during the second quarter so that results are delivered and actionable

items may be applied during the third quarter along with the annual budget, strategic

and operational planning periods of most organizations.

Administratively, the fourth quarter is a busy time for most companies making it

difficult to guarantee the availability of resources for participation in any type of

benchmarking study.


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CONCLUDING ANALYSIS

The 2009 Trends in Supply Chain Benchmarking white paper confirms

that the majority of respondents recognize the value of benchmarking and

participate in studies today. Further, the survey reveals that planned

benchmarking is on the rise across all study dimensions, suggesting thepossibility of an influential gap between those currently benchmarking and

the remaining 38 percent that have yet to engage in the opportunity for an unbiased

evaluation of their network.

Respondents also clearly endorse and support the use of benchmarking as a

performance management tool. With growing participation, even during an economic

downturn, they actively seek out opportunities for growth, improvement and

investment. Meanwhile, those not yet taking advantage of external benchmarking are

at risk of falling behind their competitors and may be at a disadvantage in establishing

best practice and influencing industry policy. This prospect is highlighted by the finding

that, amongst all the growth areas of benchmarking, both Product and Functional

benchmarking are poised for the greatest adoption indicating the majoritys

involvement in extensive and comprehensive studies that target technological,

analytical and organizational management advances.

Participants are asking for benchmarking studies focused on operational

performance improvement, process enhancement and overall costs reduction with the

provision of a clear strategic direction to identify gaps and opportunities that can be

taken advantage of without eroding industry competition. Internally, organizations that

benefit the most from benchmarking studies such as Purchasing, Operations and

Network Design, and Organization and Strategy will garner the ability to identify and

implement changes effectively. The value of truly effective benchmarking studies

depends upon the ability to correlate various dimensional aspects into detailed,

actionable items which cannot be identified by concentrating on just a single element.

A multi-dimensional study identifies and explains the correlation between various

aspects of the supply chain network, drawing together the impacts of cost, operations,

and quality.

While identifying a willingness to participate in external benchmarking studies,

respondents acknowledge the industrys existing level of distrust for participating in

collaborative efforts. This reluctance to share information may be due to perceived

competitive reasons or a lack of understanding of the benefits that can be realized from

cooperation in such studies. Respondents recognize that data must be shared in order

to provide more relevant and detailed industry benchmarking studies with competitive

comparisons of network cost and operations for all participants.

Contrary to common assumption, the survey demonstrates that cost savings is not

identified as the single most beneficial dimension. Rather, the provision of a baseline

and the competitive ranking of each companys supply chain network were recognized

as being of most value to participants. This factor bears out that benchmarking can be

as beneficial to supply chain partners as to their purchasers. As opposed to focusing

solely on price reduction, comprehensive cost management, including the

administration and correlation of all aspects of the supply chain, provides the most


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favorable long term results increasing the efficiency of all supply chain partners

operations.

The fourth quarter was deemed unfavorable for benchmarking activities yet the

majority of respondents were very open to participating throughout the rest of the year.

This result supports the benchmarking process of data collection, from the previous full

calendar year, during the first quarter, data analysis and results review in the second

quarter, with development and implementation of action plans the remainder of the

year.

Although many companies perform their own internal benchmarking studies to

evaluate their supply chain performance, having an unbiased third party with supply

chain experience and access to competitive information will benefit the participants the

most by providing an honest evaluation of all aspects of the supply chain network and

development of truly actionable items for tactical and strategic planning.

The creation of an effective benchmarking study requires participant collaboration

to develop and agree on an approach with a shared set of dimensional measurementsthat span all aspects of the supply chain network, which reduces the risk of results

suffering from a lack of comparable data points. This cooperative approach may

generate a waterfall effect in findings as participants move through the varying

dimensions of study. To facilitate data sharing and that relevant, detailed and

actionable output is achieved for all, an unbiased third party or facilitator, may work

with a group of common competitors to identify like industries, shipping comparable

products, in similar networks, with related types of equipment. Its imperative that a

significant number of industry competitors are included in the study to provide relevant

and worthwhile comparisons of supply chain performance and to reduce the instances

of incomparable data. Adoption of a holistic approach to benchmarking supports a

collaborative effort between shippers and supply chain partners that includes allimportant dimensions of the supply chain network

The 2009 Trends in Supply Chain Benchmarking survey bears out that benchmarking

is a popular and valid tool in use widely across the industry and, indeed, confirms that

benchmarking, when properly structured, defined and adopted is considered an

effective tool to evaluate supply chain performance and cost structure in relation to

overall corporate efficiency and goals. Companies need to pursue further collaborative

data-sharing efforts to effectively realize the full benefits of measuring performance and

gauging progress against competitors while improving their competitive edge.

Jennifer Cavanagh David C. Vandenbossche

Senior Research Associate Principal Consultant

London, UK Detroit, M


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ABOUT US &CONTACT INFORMATION

About AutoDiversity M

ADMi is an impartial supply chain consultancy and research organization that offers

clients strategy, research and collaboration support by providing supply chainbenchmarking and analysis. ADMi provides strategy consulting, transportation research,

decision and purchasing support to the Global supply chain industry. ADMi is uniquely

designed to provide unbiased, non-conflict of interest supply chain research and

decision support services to all the supply chain industry by creating mutually

productive collaborative network opportunities, promote supply chain innovation and

standards, as well as provide qualifying tools to emerging carriers and service providers

to improve overall competition.

anagement inc. (ADMI)

Visit the ADMi website atwww.autodiversity.com

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technology is the most sophisticated and adaptable software available today.

ehnet limited

Visit the ADMi website atwww.vehnet.co.uk

Contact Information

For more information on this report or to participate in benchmarking studies please

contact:

David C. Vandenbossche,

Principal Consultant

[email protected]

Con

And for more information on benchmarking in general, please visit:

www.benchmarksupplychain.com

fidentiality

All information in this document is provided in confidence for the sole purpose of

adjudication of the document and shall not be used for any other purpose, be published

or disclosed wholly or in part to any other party without ADMIs prior permission in

writing nor be held in safe custody. These obligations shall not apply to information

which is published or becomes known legitimately from some source other than ADMI.
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admi 2009 trends in supply chain bench marking survey

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