An illustration of a supply chain.
Supply chain benchmarking is a management tool that companies use to measure the efficiency and effectiveness of their supply chain. Supply chain benchmarking often focuses on how companies use a supply chain to benefit consumers, the costs associated with the supply chain, and the resources used to develop and implement a consistent level of service throughout the supply chain. Supply Chain.
Supply chain benchmarking is a management tool that companies use to measure the efficiency and effectiveness of their supply chain.
A supply chain is an organizational system that companies use to move consumer products from their warehouse to consumers. Supply chains often include a variety of different businesses, such as delivery companies, warehouses, distributors, and retailers. Business owners and managers use benchmarking to compare their company’s supply chain to a competitor’s supply chain or to the industry standard. Benchmarking is a management tool that allows companies to improve their operational performance.
A supply chain is an organizational system used by companies to move products from their warehouses to consumers.
Supply chains increase the lead time for a company to make a profit from the sale of individual consumer goods. Manufacturing and production companies often have longer supply chains because they use many other companies to deliver, store, and sell products to consumers. Supply chains can also affect a company’s regional or national sales. The longer a company takes to ship products to warehouses or distributors, the longer companies must wait to make a profit. Supply chain benchmarking allows business owners and managers to compare their supply chain processes to another company’s and determine which is more effective. Owners and managers can also compare their supply chain performance to previous periods to see if previous supply chain changes have seen any improvement.
Supply chains often include a variety of different businesses, such as delivery companies, warehouses, distributors, and retailers.
Measuring costs is a common approach to supply chain benchmarking. Owners and managers will calculate the cost value associated with each business in the supply chain. Each organization in the company’s supply chain increases the cost of the individual goods that flow through the chain. Companies will pass these costs on to consumers to improve their profitability. Cost benchmarking can help owners and managers discover if recent cost increases are creating unfavorable conditions for selling consumer products.
Companies often devote large amounts of financial resources to the supply chain process. A supply chain not only requires the company to spend capital to pay for the services of other organizations, but can also use the company’s labor and equipment to package and ship products through the supply chain. Owners and managers measure this process by supply chain benchmarking to determine the opportunity cost of using economic resources in the supply chain rather than elsewhere in the business. An opportunity cost represents the second best use for a company’s capital and other resources. Companies evaluate the use of economic resources and supply chains to determine if they can create their own internal process to deliver goods to consumers.