The globalization of trade and complex business situations in the competitive environment demand for efficient inter-company collaboration and better control of supply chain processes. Both upstream and downstream partners are involved in the supply chain collaboration. To become efficient, the participating members shall set best in the class as the benchmark and progress in the right direction. The previous research focuses mainly on supply chain benchmarking at intra-company level. Inter-company benchmarking needs a new perspective of understanding and collaborative learning amongst the participating members. This paper proposes a benchmarking scheme for supply chain collaboration that links collaborative performance and collaborative attributes. This scheme can be used to examine the current status of supply chain collaboration among the participative members and identify the performance gap for improvement initiatives. A non-parametric mathematical programming technique called Data Envelopment Analysis (DEA) is used for benchmarking.
Benchmarking is the most popular technique adopted by organizations to understand how well they are performing relative to their competitors. It is also used to identify what management practices are worthwhile to apply in one's own firm in order to achieve desired performance goals. Benchmarking has been defined as "the search for industry best practices that leads to superior performance" (Camp, 1989), but it can also be regarded as the constant search for reference points due to the rapid state of change on all fronts (e.g., technology, human resources skill, consumer tastes, etc.). The benchmarking process consists of investigating practices and establishing metrics, where practices are interpreted as the processes that are employed and metrics are the quantified result of instituting practices. Companies have to create close relationships with their upstream and downstream partners due to acute competition. The traditional relationship is no more effective in this competitive era (Bowersox et al., 2000).
One of the earliest firms to adopt benchmarking was Xerox Corporation, who used it as a major tool in gaining competitive advantage. It began the benchmarking with manufacturing activity, and later on in 1981, the process was adopted by the company covering all the cost centres and business units (Lapide, 2000). The emerging trends in supply chain collaborations have been quickly adopted by many companies. For example, the pilot project of Collaborative Planning, Forecasting and Replenishment (CPFR) scheme helps Wal-Mart and its supplier to improve stock levels, reduce lead-times, slash on hand inventory create more consistent orders and smooth production cycles (Parks, 2001). For its substantial benefits, the trend of adopting collaborative activities such as CPFR will continue to increase in the coming decade. Internal and external metrics are monitored to enable the chain members to asses the progress of performance improvements (Stewart, 1997). An integrated performance is required by all members to facilitate their performance status along the supply chain (Lapid, 2000). The participating members become committed only if their individual performance is clearly linked to collaborative performance (Lambert and Pohlen, 2000). They also need a collaborative benchmarking that provides ideas of improvement based on comparisons between their collaborative performance against customers' and competitors' requirements (Boyson et al., 1999; Cox et al., 1997; and Watson, 1993). |
