Shifts in the market are a little like the tides. They both change gradually over time, and sometimes, a sudden wave will bowl unsuspecting people over. But by keeping an eye on them, it’s easier to predict what the change will look like and when it will come—making it easier to prepare.
That’s why benchmarking is so vital for supply chain managers. Without continually monitoring their key performance indicators (KPIs) and checking in to see how they stack up against industry standards, managers will continually find themselves playing catch up with market fluctuations—when if they’d seen the signs, they could have been two steps ahead and reaping the benefits.
In the latest in our ongoing series about how focusing on supply chain efficiencies can give shippers a competitive advantage, let’s dive into the importance of frequent benchmarking, including some tips for doing it right.
What’s the big deal about benchmarking?
Most market shifts don’t happen overnight. Fluctuations tend to occur gradually over a period of weeks or months—but the day-by-day change may be so slight that no one notices until it’s impacting the bottom line.
Numbers don’t lie. Paying close attention to KPIs can help supply chain managers spot gradual shifts in real-time before they add up to major changes. And by applying predictive analytics, they can more accurately forecast what those changes will look like, helping them lay the groundwork to meet them well in advance.
Even when fluctuations do happen suddenly, there are usually warning signs. In the same way that an upcoming holiday can cause consumer goods sales to suddenly spike (something that managers in that industry are fully cognizant of and know to prepare for), a variety of factors can signal a rapid shift on the horizon that may affect procurement, demand, or freight costs. Being attuned to the numbers and aware of historical patterns can help supply chain managers spot the warning signs and take action before a shift blindsides them.
How can shippers benchmark effectively?
Done well and often, benchmarking allows companies to become more agile in response to market shifts. But there are right ways and wrong ways to benchmark.
An integral aspect of successful benchmarking is the ability to view both the big picture and the granular details. Without one or the other, supply chain managers may struggle to pinpoint why a certain shift is happening—or miss the forest for the trees.
Leveraging business intelligence (BI) tools makes it easier to gain a holistic view while maintaining the ability to take a deeper dive whenever needed. With access to an intuitive supply chain dashboard that they can quickly pull up and scan at any time, supply chain managers can make benchmarking a regular and simple part of their workflow, rather than a chore that leaves them scratching their heads.
Of course, this is only possible if a company is able to gather its supply chain data consistently and ensure that it’s up-to-date and of a high quality. If benchmarks are determined from outdated or “unclean” data, the market view they point to may be wildly misleading.
Utilizing a robust transportation management system (TMS) that automatically collects and synthesizes data from across a company’s disparate systems ensures supply chain managers are working with up-to-date and accurate data, making benchmarking a lot easier.
Market shifts don’t have to be a surprise
Supply chain managers can’t predict the future. But through frequent benchmarking, they can anticipate changes on the horizon, allowing them to respond more agilely to market shifts and avoid getting caught unawares.
At CTSI-Global, we champion proactive—rather than reactive—supply chain management. Our industry-leading TMS and BI solutions help supply chain managers benchmark quickly, regularly, and effectively to steer their companies in the right direction.
In a volatile market, this agile and responsive approach can make all the difference, leaving some companies standing while others crumble under the pressure.
Don’t leave benchmarking on the to-do list until it’s too late. Get started today.