We all utilize benchmarking is some way, shape or form to determine if we are on the right track with our supply chain operations. But did you know that benchmarking can provide you with much more information than just giving you a thumbs up or down on what you are doing now?
By definition, benchmarking is the search for best practices utilizing metrics (or measurements) to determine performance “gaps” in your supply chain operations. By way of example, most hospitals use the benchmark of 98% for acceptable stock outs received from their distributors on their first shipment. However, what if you discovered that one of your peers was consistently achieving a performance level of 99.6% wouldn’t you be curious to find out how they are attaining this level of superior performance?
This is why benchmarking matters, because you just uncovered a performance “gap” of 1.5% between your hospital and your peers that is holding you back from superior performance in this area of your supply chain operations. How would you know that this opportunity to improve your operations existed if you didn’t employ benchmarking to become better than good?
Just as important, once you have this information in hand you than need to determine through surveys, interviews and even site visits why there is a difference between your performance and that of your peers. Once you understand the difference, then you need to develop an action plan to improve your own performance to match or exceed that of your peers.
There are exceptions to this protocol! Sometimes you will find that due to physical constraints or special circumstances you won’t be able to meet your peer’s superior performance metrics. For instance, we once benchmarked a client’s disposable bath system usage and identified it as being too high only to find, after interviews and a site visit, that our client’s hospital had no bathrooms in their patient rooms, only common bathrooms in the hallway. Well, this physical constraint certainly showed us why there was a distinct difference between this hospital and their peers’ disposable bath system usage, which we now concluded was within acceptable limits.
After years of hands-on research, I have come to the conclusion that if you want to excel in supply chain management you will need to set priorities, measure, and benchmark to reach superior performance. There is no substitute for benchmarking, if you are dead serious about identifying new and emerging best practices that can raise you own high standards to even higher levels of peak performance.
Robert T. Yokl
Chief Value Strategist
Strategic Value Analysis® in Healthcare