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Benchmarking in logistics
If you're in logistics and you still haven't implemented benchmarking, there's bad news for you. You may not even realise how much money is going nowhere. Your logistics may seem efficient until someone else comes along who does the same thing faster, cheaper, with fewer employees and fewer errors.
And you won't even know it because you haven't compared yourself to your competitors. Why is it important to do this? You will learn the answer to this question from a new publication in LLC «FabriQuanta» blog.
And you won't even know it because you haven't compared yourself to your competitors. Why is it important to do this? You will learn the answer to this question from a new publication in LLC «FabriQuanta» blog.
What is benchmarking
Benchmarking isn't just ‘comparing for interest’. It's a way to understand where you are relative to best practice, and how quickly you can get there.
In logistics, benchmarking shows you where your business is weak, what processes need to be revised, how much you are really losing compared to the industry leaders, and what you need to do to be at least at their level.
What are the dangers of not having one
Firstly, the illusion of efficiency. You may think that the warehouse is working perfectly until you find out that another warehouse with the same volumes is doing twice as many operations per shift.
Secondly, lack of benchmarking threatens to lose your competitive advantage. While you're happy with your performance, competitors have already optimised delivery time accuracy to hours, not days.
Third, without benchmarking against the market, you don't know where and how to scale.
Types of benchmarking
Benchmarking isn't just ‘comparing for interest’. It's a way to understand where you are relative to best practice, and how quickly you can get there.
In logistics, benchmarking shows you where your business is weak, what processes need to be revised, how much you are really losing compared to the industry leaders, and what you need to do to be at least at their level.
What are the dangers of not having one
Firstly, the illusion of efficiency. You may think that the warehouse is working perfectly until you find out that another warehouse with the same volumes is doing twice as many operations per shift.
Secondly, lack of benchmarking threatens to lose your competitive advantage. While you're happy with your performance, competitors have already optimised delivery time accuracy to hours, not days.
Third, without benchmarking against the market, you don't know where and how to scale.
Types of benchmarking
- Internal. You compare units against each other, such as two warehouses or two logistics shifts.
- Functional. See how the same processes (at least partially) work in other areas or industries.
- Competitive. Comparison with direct or indirect competitors.
- General. Consideration of global standards and best practices, even if they seem distant to you so far.
How to implement benchmarking in logistics - step by step
Here's a clear algorithm on how to capitalise on it:
Here's a clear algorithm on how to capitalise on it:
- Determine what to compare. This can be delivery times, speed of order processing, shipping accuracy, return rates, cost per kilometre, etc.
- Choose who/what to compare against. This could be internal departments, partners, open industry data or even logistics association standards.
- Gather the data. Numbers only, facts only. Not ‘it seems to us’ but ‘here are the metrics: ours and theirs’.
- Find the gap. Where exactly are you sagging? 10%? 50%? Where is it worst?
- Understand the reasons why. Why are others doing better? What do they have that you don't: processes, equipment, something else?
- Develop an action plan. Optimisation, automation, process redesign, staff training - whatever it takes to level up or overtake.
- Repeat regularly. Benchmarking is not a once-a-year action. It's a constant check to realise you're not falling behind.
What you should definitely not do
Don't copy blindly: what works for others may not always work for you without adaptation. And don't gloss over the results: if there is a failure somewhere, discuss it, learn from it, correct it. It's not a reason to be ashamed, it's a reason to grow.
Benchmarking is your spotlight. It shows you where you really are at and where to go next. Start small, advise the experts at LLC «FabriQuanta». Compare one process. One indicator. But start.
While you live in your figures, the market lives in real comparisons.
Don't copy blindly: what works for others may not always work for you without adaptation. And don't gloss over the results: if there is a failure somewhere, discuss it, learn from it, correct it. It's not a reason to be ashamed, it's a reason to grow.
Benchmarking is your spotlight. It shows you where you really are at and where to go next. Start small, advise the experts at LLC «FabriQuanta». Compare one process. One indicator. But start.
While you live in your figures, the market lives in real comparisons.
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