Case study of benchmarking logistics supply chain mgt in Thailand

1. 1 Case study of “benchmarking” logistics & supply chain mgt in Thailand Asst. Prof. Ruth Banomyong Head, Dept. of International Business, Logistics & Transport Thammasat Business School Banomyong@thammasat.net

2. 2 Agenda Benchmarking? Benchmarking logistics framework Example of Thai output Questions & Answers

3. 3 What is benchmarking? Benchmarking is an improvement technique that considers how others perform a similar activity, task, process or function. Benchmarking is not only a comparison of key performance indicators (KPIs) although benchmarking uses KPIs to compare operations.

4. 4 Reasons to benchmark The objective in developing the benchmarking exercise was to gain information on how organisations: 1.Defined current performance levels 2.Quantified the gap between current levels and best practice. 3.Managed the logistics process from the perspectives of inputs into the system and logistics outputs.

5. 5 Superior Performers Spend Less on Logistics

6. 6 Benchmarking logistics framework Benchmarking exercise conducted in 2002 with Thailand Productivity Institute. 18 Thai companies registered MNEs, State Enterprises & SMEs Use of SCAR framework (Supply Chain Assessment Review)

7. 7 World Class Supply Chains

8. 8 DIFOT

9. 9 Procurement Overview

10. 10 Supplier Performance

11. 11 Balanced KPIs – Is Forecasting Important? 5 Strategic Level 1 Supply chain KPIs: Customer service – DIFOT Cost to deliver to service – total and functional % of sales, Cash cycle. Sales Forecasting Accuracy. Inventory Turn Over. Supplier DIFOT (for distributor) or manufacturing performance.

12. 12 A Benchmarking Model. The Charts (service-cost and inputs-outputs) uses the results from a Customer Order Fulfilment and Supply Chain Survey. Questions selected are those that impact on logistics best practice. The Customer Order Fulfilment and Supply Chain Survey consists of eight parts which include: Profile of operation -DC/warehouse Logistics & SCM structure -Transport Purchasing -Customer service Inventory management - Functional Costs

13. 13 KPI Summary

14. 14 Cost & Service Chart

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16. 16 The chart below illustrates the performance of supply chain inputs (enablers) that XXX use to achieve their current service and cost structure. Underdeveloped inputs equate to close to the centre while best practice is extreme outside of web. Supply Chain Inputs

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18. 18 Peer group methodology