It is amazing sometimes how we use the same words but absolutely do not communicate. And no, I am not talking about my hearing, which after 10 million air miles is not as good as it once was (interesting I am preparing this podcast from seat 3B in a small, noisy regional jet).
However, nor am I speaking about my wife and I's broken conversation (think about wife from Venus and me, Pluto) about taking the grandchildren to a pumpkin farm this weekend, and I absolutely don't think we got it done from a communication standpoint.
What I am talking about is a conversation I had two weeks ago with a senior executive at a large multi-national corporation. I said something like, "I really feel benchmarking and best practices would help you prioritize the opportunities to improve your supply chain." The executive looked at me and said, "I don't agree -- first of all, benchmarks are just general guidelines and not applicable to my company, and secondly, best practices do not provide useful information on how my company can improve."
Wow, let me be clear this executive and I were both speaking English, and we both used the phrase benchmarking and best practices, but we absolutely and totally were not communicating.
First, to have any value, and in my definition to even use the word benchmark, I am 100 percent certain that a benchmark must be specifically focused on a specific situation. For example, to say the average person in my daughter's family is four feet tall would lead you to believe that my daughter's family is short.
To the contrary, the six-foot father, five-foot 6-inch daughter, two-foot six-inch 3-year-old daughter and a two-foot tall 1-year-old son are all average height. And so the benchmark of four feet is absolutely irrelevant because I am mixing the benchmark of two adults and two infants. In a very similar way, all benchmarks to be valid must be benchmarks for appropriately defined, similar groups. So for a supply chain benchmark to be valid, it must be a benchmark by comparing similar types of organizations and supply chains.
Otherwise the benchmark is not worthwhile, and in fact, in my terminology, not even a benchmark. Sometimes to make this point even stronger I refer to "benchmark" in accordance to a concept I created. I think this is an Italian phrase -- primo solo. What this means is: what I desire is to compare my benchmarks against other folks like me -- solo -- that are the best performers -- primo. So built into the word benchmarks is that they must always be primo solo. In conjunction with being primo solo, I must know what supply chain processes beget the primo solo benchmarks.
If all I know is the benchmark, I don't know anything. For example, if all I know is I have 8.6 inventory turns a year, versus my primo solo group of 10.3, it is clear I have a significant opportunity to improve. But if all I have is the benchmarks, I really do not know how to improve.
This is where the best practices come in. What I need to grasp is the best practices, the supply chain processes that beget the 10.3 inventory turn performance, and now I have the ability to identify the specific process that I must change to improve my performance. So this is what I am meaning by benchmarking and best practices.
Now the good news: communications can be made to work. After I explained primo solo benchmarks and supply chain best practices to the multi-national senior executive, he got it. So he and I both now agree that benchmarking and best practices would help him prioritize his opportunities to improve his supply chain.
Going back to podcast #4 in this series, please recall in the answer to my question of John Spain, "How do you decide on the right opportunities?" -- John responded, "Well, once we gather the data, we compare it to relevant benchmarks and best practices to identify the gaps, the opportunities, that we then need to pursue."
John explained the process of the global supply chain assessment (see podcast #4), and now what we must do to present the rest of the story is fully discuss the process of benchmarking and best practices.
I am very pleased to introduce to our podcast audience the Executive Director of the Supply Chain Benchmarking and Best Practices Consortium -- and my brother -- Bruce Tompkins.
Jim:
Bruce, very pleased to have you join us today. Please begin by sharing with our podcast audience the objectives of the consortium.
Bruce:
The primary objectives of the consortium are to provide a direct comparison of supply chain metrics, the ones that you mentioned Jim, to help companies understand the relationship between their performance metrics and the practices they use. It's a way to identify gaps and specific initiatives that will provide them with the needed improvements in their supply chain practices. The consortium also strives to be a source of leading-edge supply chain knowledge.
Jim:
How does the consortium go about obtaining primo solo benchmarks that lead to relevant best practices?
Bruce:
We have identified the core benchmarks that represent supply chain performance, ranging from supply chain planning and sourcing functions all the way through all other supply chain functions to the sales and customer service side of the supply chain. Companies can use the database tools we have created to search the database and then analyze the data to learn more about their supply chains in comparison to others. These tools give consortium members specific data comparing themselves from a data standpoint, a metric standpoint, and a processes standpoint to companies just like them.
Jim:
So there are a lot of participants in the consortium?
Bruce:
The consortium has grown rapidly over the last two years. We have nearly 200 companies who are actively participating in the database and tools. The companies are from manufacturing, retail, and wholesalers/distributors across all industries. We have about an equal mix today of manufacturers, retailers, and wholesale distributors, so the distribution of companies that we have is very good.
Jim:
Are the topics broad across the supply chain?
Bruce:
The topics that are covered as a part of the consortium process have also grown with time. Today we have benchmarks and best practices data in supply chain planning, sourcing, manufacturing, international transportation, domestic transportation, distribution center operations, sales and customer service, supply chain technology, security, environmental/sustainability issues, and financial metrics. In total there are over 550 questions that make up our database.
We also create and execute frequent Hot Topics surveys. These surveys probe a particular topic identified by the consortium. These topics are where we learn and share information that is happening today; where a company can immediately get some help on a particular issue by identifying the things that other companies are doing in that particular area. An example of a Hot Topic was a Fuel Cost Strategies Hot Topic, which we actually did a few months ago, to help companies identify strategies that they can be using with fuel pricing approaching $4.50/gallon.
Jim:
You mentioned the search tool set -- are there other tools?
Bruce:
The tools used by the consortium are keys to members getting specific value from our database. In addition to the search capacity, members can also create filters to segment the data and query any individual question.
Our members also have access to a dashboard tool to allow them to compare their benchmarking and best practices with other industry-leading firms. The dashboard is designed to help companies assess their practices, and with drilled-down capabilities, understand the opportunities that are available for them to improve their supply chain. The dashboard tool is unlike any other tool we have seen in the industry, in that it really allows companies to understand where their opportunities are and get to the bottom of strategic improvements they would like to make.
Jim:
Who are the leaders of the consortium?
Bruce:
The consortium has an advisory board that leads the process. The board is made up of companies who have participated in the consortium for some time. The individual board members are supply chain leaders within their perspective organizations, so they bring a great deal of knowledge and background to our consortium, and really help us understand what the issues are that the consortium should focus on.
Our 2009 slate of board member companies include Campbell Soup, Hallmark Cards, Hewlett Packard, Ingram Micro, Kraft, Miller Coors, Target, Coca Cola, and TrueValue. So you can see we have some leading companies that help provide guidance to the consortium and direct the efforts of Tompkins Associates in facilitating the process.
Jim:
How do consortium members interact?
Bruce:
Interaction and networking among our members is one of the most important aspects of being a part of the consortium. We host a two-day annual Leadership Forum where our consortium members meet and share data and practices.
The consortium members are also encouraged to reach out to each other to discuss issues and seek out best practices. Sometimes we at Tompkins facilitate these discussions, where other interactions are less formal. The consortium database includes a tool called Peernet, where members voluntarily enter contact information and make themselves available for network discussions.
Jim:
If folks wanted to obtain more information on the consortium, how would they do this?
Bruce:
The consortium's website is a great place to start to learn more about what we do and how we do it. It can be found at www.supplychainconsortium.com. There is also contact information on the website to reach out to myself or my team. I would be happy to talk with anyone about the consortium. My number is 919-855-5527 (click here to e-mail Bruce Tompkins). Now back to Jim.
Jim:
Well thank you very much Bruce -- you covered a lot of ground today. I very much appreciate you being with us.
This concludes podcast #5 in this globalization series. In two weeks I look forward to presenting a look into one of the major challenges within today's global supply chain: the relationship between suppliers and customers.
Glad you were with Bruce and I today; we look forward to speaking to you again real soon.
