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Bench Marking Supply Chain Management

Bench Marking Supply Chain Management

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Published by: pravin02343 on Aug 30, 2009
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12/26/2010

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Benchmarking Supply Chain Management: Finding Best Practices
By
Bjørn Andersen, Tom Fagerhaug, and Stine RandmælSINTEF Industrial Management, Trondheim, NorwayJürgen Schuldmaier, Profactor, Steyr, Austria
ABSTRACT
This paper represents a more popularized adaptation of the completereport written (Fagerhaug, Randmæl, Andersen, 1998) as documentation of thebenchmarking activity in the project SMArTMAN SME. The objective of usingbenchmarking in the SMArTMAN SME project was to increase the knowledge aboutthe supply chain management process and to enable the industrial partners to learnfrom the best practice. This was done through identification and study of otherenterprises in Europe and their processes. The two key findings from thebenchmarking studies are:1.
 
A set of flow charts that portray what we consider to be a best practice processspanning the areas of procurement and supply chain management. This processhas been designed by merging the best elements from each of the benchmarkingpartners’ processes into one generic process.2.
 
Descriptions of practices observed at the benchmarking partners’ that seem to beof “best practice” level and which were not suited for inclusion in the flow charts.
1
 
The SMArTMAN SME Project
The European machine manufacturing industry consists mainly of SMEs, since inmost cases the product, a machine, is not suitable for mass production. TheseEuropean Machine Manufacturing SMEs (MM-SMEs) are forced by the increasing- 1 -
 
worldwide competition to redesign their business processes and their cooperation withsuppliers. Therefore, new pragmatic methods and tools are needed on three levels:1.
 
Support for strategic Make-or-Buy decisions for complex parts and components.2.
 
Support methods and tools for the organization and management of the suppliers.3.
 
Adaptation and integration of operational Information and Communication Tools(ICT) for the operative management of product logistic, quality, and administrativeinformation between the MM-SMEs and their suppliers.The project is divided into six tasks:1.
 
Current State and Requirements.2.
 
Benchmarking.3.
 
Make-or-Buy Tool (in parallel to).4.
 
Organization Scenario.5.
 
ICT-Systems.6.
 
Validation and Demonstration.
2
 
What is Benchmarking?
Benchmarking can somewhat philosophically be defined as follows (APQC, 1992):
 Benchmarking is the practice of being humble enough to admit that someone else is better at something, and being wise enough to learn howto match them and even surpass them at it.
This definition captures the essence of benchmarking, namely learning from others.The core of the current interpretation of benchmarking is:- 2 -
 
 
 Measurement 
, of own and the benchmarking partners’ performance level, both forcomparison and for registering improvements.
 
Comparison
, of performance levels, processes, practices, etc.
 
 Learning
, from the benchmarking partners to introduce improvements in your ownorganization.
 
 Improvement 
, which is the ultimate objective of any benchmarking study.Benchmarking emphasizes attaining so-called breakthrough improvements, as shownbelow (Andersen and Pettersen, 1995):
PerformanceTime
ContinuousimprovementBreakthroughBenchmarkingacceleratesimprovement& changeContinuousimprovement
 Breakthroughs of the type illustrated by the star are usually accomplished byintroducing practices that are new to an industry, through generic benchmarking.Some examples are listed in the table below.
Problem Compared with
- 3 -

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