Where do visualization and benchmarking meet operations?
As I looked down the tee on my final swing, I knew that this shot would determine it all – whether I would end the season with a high tee-to-green average or not. Above 1.1, I would be in the top 1%. Below 1.1, I was meaningless. I took a deep breath, closed my eyes and slowly swung my arm backwards.
With every hit of the ball in golf, there are dozens different statistical measurements that are taken. Data analysts, sports fanatics and casual observers pick apart every element of the game; often out of pure interest. These numbers give them a finger on the pulse of every minute activity in the game.
However, when we look at our company operations, we could only wish it were the same. Why can fans measure every little detail of a player’s performance and compare it to other players but we can’t get a simple visualization of our supply chains comparative performance?
Why is it so difficult to benchmark my operations and visualize it compared to my golf game?
The Art of Benchmarking
Organisations are constantly trying to find savings and improvements but are your goals even realistic and achievable? Before launching ways to improve, these are probably your most important questions. Data without context is meaningless.
One way to discover the answer is benchmarking. By benchmarking we can know:
Can I halve my Supply Chain Cycle Time?
Is it realistic to improve my Customer Fill Rate by 30%?
Is a 99% Production Yield even possible?
Can we reduce handling time by a factor of five?
Once you know the benchmarks, then they should define your lower bound on performance, not upper bound. Just because another company hasn’t been able to achieve a 99.9% on time delivery rate, it doesn’t mean that it’s not possible – the benchmark will tell you the difficulty.
But the data is never enough. New visualization and analytics tools are allowing managers to drill into the causes of poor performance and find the bottlenecks stopping stellar performance easier than ever.
More importantly, the goal here is to do a little and learn a lot via visualising what is happening.
But given the importance of benchmarking how do we do it? And where do we get the data from?
Benchmarking Strategies – Where to Acquire the Data
This is often the hardest part. Where do I get my benchmark data from to even be able to benchmark my company’s performance? There are four major strategies that can be pursued:
Benchmark between comparable companies that operate in different geographical markets
Members of our team have successfully carried out benchmarking in the wool handling industry by setting up benchmarks between like companies that operate in different countries. We were able to collect data on two separate companies that dominated their market in their respective countries that on the surface looked very similar. Once we explored this it became apparent that there were fundamental differences in performance of key metrics such as:
Cost per unit
ROI of capital investment and much more
Using this information, the companies were able to target specific strategies to improve their performance based on facts.
Benchmark between different sectors of similar industries
For example, companies operating in the space of providing disposable goods in the automotive space could compare themselves to companies selling goods in the motorcycle, sporting goods or hardware industries. Even if the goods being sold and purchasing cycles are different you can look at:
Transport methods for similar sized goods and understand why the same service is costing you so much,
The number of purchase orders raised and whether this number is too high and finding ways to reduce manual effort,
The handling times for boxed goods and understanding why you need to touch such items three times instead of one like other companies.
Often your suppliers will be a great source of data and will share their data with you if you just ask. Some data elements will be present in the documentation they provide such as terms of trade, shipping documentation or invoice documents or their performance. Examples might include:
Minimum order quantities
Order cycle time and variation
Order line fulfilment
Platforms that collect data for their customers on aspects of the performance of their systems (e.g. Internet of Things, websites, etc.) have benchmark data on each company’s performance. A very common example is Google Analytics which can provide benchmarking information on numerous metrics across a website and allow you to compare your website’s performance with that of the average of others.
In addition to the above, there are many reports such as:
We are able to address the issue by looking at the exact time points that caused higher variance and perform the holy grain of benchmarking: root cause analysis. We can now ask the questions like why is there a difference and what are the causes?
But it only begins to get exciting when your visualisations start to live. This means moving to mobile, having real time updates on your tablet or phone. So when that cyclone hits and scuttles all your great plans, you have the alerts and the right information to make informed decisions. This functionality seems to be quite new to many visualization tools but one tool that is outperforming the rest in this sphere is Domo. Based on our limited experience with Domo, we have done things like:
Managing by exception instead of analysis exhaustion,
Making sure not just you but your teams know what is going on at the level of granularity they need to know it.
Collaborating across teams
Accessing data and visualize it on any device and anywhere – 24×7 visibility
Self-service visualization without IT department input
The ROI of Benchmarking and Visualisation
So get your benchmarking data and put it in front of the right people. Confronting them with these truths is sometimes enough to drive the culture change need to achieve that next level performance. Simply knowing your not up to the mark can be enough to drive action.