Chain Reactions

"Benchmarking Is For Losers"

I heard a fascinating comment about benchmarking the other day. Without divulging which industry sector this person works in, the observation was basically this: "Only lousy companies bother with benchmarking. There's nothing you can learn from your competition because they don't know your business and your operations like you do."

In other words, "Measurements don't matter manage by your gut, and you'll do fine."

So why do I find this observation so fascinating? I guess I'm susceptible to the same fascination that draws people to slow down highway traffic to a crawl just to get a better look at the spectacular crash on the other side of the median. There's an undeniable curiosity at play whenever somebody or some company does something so outrageous that you just can't help but watch, grateful that it's not you who are involved in the accident.

And make no mistake any company that deliberately takes on the attitude that benchmarking is a sign of weakness will soon be needing a new sign of their own, and it will simply say, "CLOSED."

Not that benchmarking is a magic elixir that can cure all ills benchmarking, of course, doesn't actually fix anything. As I state in my book:

When it comes to measuring overall supply chain performance, companies typically focus on benchmarking metrics, such as those established in the Supply Chain Council's SCOR model. Delivery performance, fill rates, perfect order fulfillment, cash-to-cash cycle time, inventory turnsthese are some of the standards by which supply chains are judged, to determine whether they're best-in-class, fair-to-middling, or knocking on death's door.

I strongly suspect that the benchmarking naysayer I talked about earlier had a bad experience with a consultant, who probably promised that a benchmarking study would fix all his problems, but all that really happened was the consultant recommended a very long engagement that would mostly just fatten the consultant's wallet. But that's not benchmarking; that's an example of a "boiling the ocean" project designed to last forever.

In any event, none of the manufacturers that I write about in the metrics chapter of my book who do benchmarking could be defined as "losers" in any way, shape or form: Hyundai, IBM, Imation, Nissan. All these companies, and many more like them, have learned that by studying the best and emulating the best and that includes studying yourself, if in fact you're already the best you become and you remain a winner.

TAGS: Supply Chain
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish