Published on September 29, 2020
Trent had been tracking its operational trends and wanted to compare its performance measures against the top performing organisations in retail to uncover areas for potential business improvement.
The performance benchmarking exercises with American Productivity and Quality Center (APQC), facilitated by Tata Business Excellence Group (TBExG), enable companies to identify areas for process and performance improvement. It also facilitates the creation of a culture of continuous improvement and transformation.
Accordingly, using APQC’s Open Standard Benchmarking (OSB) assessment, TBExG helped Trent in comparing its supply chain planning (SCP) and logistics metrics with those of the best in the industry.
The operational key performance indicators (KPIs) for both the processes were run through a detailed, multi-step validation process and compared to the peers with detailed metrics. The assessment report from APQC contained validated benchmarking information, including the performance relative to its peers in separate industry, region, and organisation-size peer groups. In addition, qualitative information related to key business practices and enablers was included in the report, which helped Trent identify the performance gaps in their key metrics and identifying the performance measures to be taken for improvement.
The report highlighted KPIs related to supply chain and logistics in the categories of cost effectiveness, process efficiency, and cycle time for Trent compared to all participants as under:
- 25th percentile or bottom performers: This represents the performance level below which 25% of all responses fall
- Median: The median performance level for all participants in the database. The median reflects the value below and above which there is an equal number of values
- 75th percentile or top performers: This represents the performance level below which 75% of all responses fall
- Gap: Represents the difference between the performance levels of the organisation versus the top performer value for that particular metric
Post the OSB assessment, Trent has identified the following key areas for further understanding of global benchmarks and best practices as part of the improvement interventions to bridge the performance gap.
1. Total transportation cost as a percentage of revenue
2. Total inventory turns
3. Percentage of supply chain workforce with Six Sigma training
4. The period from customer shipment to delivery cycle, in days
APQC’s Open Standards Benchmarking in supply chain and logistics processes was a helpful exercise as it provided an outside-in perspective. Usually, these processes are internal to any organisation as it becomes challenging to benchmark for the key performance indicators, which becomes an impediment to continuous improvement. The benchmarking exercise helped us visualise the process holistically and identify the opportunities for improvement with some world-class benchmarks.
TBExG has partnered with APQC to enable Tata companies to measure and compare their performance with leading international organisations. TBExG helps Tata companies compare their business performance metrics to the best in the industry through APQC’s Open Standard Benchmarking (OSB) assessment. It helps companies identify performance gaps in their key metrics. It also assists in improving performance measures by sharing best practices both within and outside the Tata Group.