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Procurement Advisory ServicesBenchmarking provides evidence that Procurement is delivering value to the business in a rigorous, data driven manner – and reassures management that their practices are in-step with competitors.
The focus of benchmarking in procurement is to identify high performing organisations that excel in area of business, this could be in terms of capabilities, processes, or performance. Often, we can learn from best-in-class organisations, identify what they’re doing well and understand how you compare. You’re then able to set targets for your own organisation's improvement. You can also learn from their experience and avoid pitfalls that they have may have encountered during their development. You’re then able to set targets for your own organisation's improvement. Good benchmarking practices, helps with adding value to your organisation.
Managing time, managing money and mitigating risk are at the core of these benchmarking activities. There is an ongoing need to ensure that Procurement and Supply Chain activities are competitive and governed by best practice, particularly across these three key areas.
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Good benchmarking practices are core to identifying and limiting supplier risk. As well as:
The following types of benchmarking support improvement and help to add value to your organisation:
There is of course no reason why an organisation should not apply more than one of the above approaches simultaneously.
Benchmarking can be internal or external. Internal benchmarking involves comparing performance, processes or procedures within an organisation i.e. comparing how different departments carry out the same task.
External benchmarking involves comparing performance, processes, or procedures to those of an external organisation, such as a competitor.
Benchmarking in procurement has a few advantages:
Benchmarking can provide necessary external confirmation that might be needed to provide additional support for an organisation that has embarked upon a difficult period of change.
Although benchmarking is a great method to monitor how your organisation is doing, there are some disadvantages to this method:
Benchmarking data can be costly so doing some homework on the credibility and suitability of the information is essential. Alternative methods can include attending events and conferences, reading case studies and joining specialist networking and knowledge exchange groups.
Operations management is a key area within any organisation. It plays a key role in keeping supply chains operational in today’s challenging environment. Discover the key to success when thinking about operations management
Find out more about Operations Management
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