Logistics Bureau

LOGISTICS BUREAU
FREE REPORT

THE BUSINESS RACE,

What Position Are You In?
Ignorance is NOT bliss!
Companies who provide Best-in-Class service do so at half the cost of their
peers

The pressure is on! Supply Chain and Logistics costs keep rising every day
and you are almost certainly missing major opportunities for improvement.
This Report introduces real, long-term solutions to help you improve ser-
vice, reduce costs and gain a crucial understanding of how your business
stacks up against your competition.

How does your business rate? Find out now!

>>
Allow us to introduce ourselves
Thank you for making the effort to download this Benchmarking Report.
We are certain that you will find the contents of great value.

So that you can appreciate the background behind the

contents of our Benchmarking Report, allow us to take a
moment and introduce ourselves.

Logistics Bureau is a specialist management consult-

ing company in the field of Supply Chain and Logistics,
established in 1997, by Rob O’Byrne. Rob is the owner
and Group Managing Director of Logistics Bureau and
has been working, teaching and consulting in the field
of Logistics and Supply Chain since he was 17! Since
1997 he has built Logistics Bureau to become the lead-
ing Supply Chain and Logistics Consulting company in
the region with offices in Sydney, Melbourne, Brisbane,
Perth, Auckland, Bangkok, and Ho Chi Minh City.

Logistics Bureau has conducted over 1,500 client as-

signments in over 23 countries to date (Some like Ar-
gentina, are not on the map of our region!).
We are exceptionally proud of the fact that 67% of our
work is repeat business. We believe that speaks vol-
umes about the quality of our work.

The Logistics Bureau Group comprises three compa-

nies, Logistics Bureau, Logistics Bureau Asia and Bench-
marking Success, who focus on the area of Supply Chain
Performance Benchmarking and Business Improvement
Programs.

We’ve had the pleasure of working with some truly great

businesses and fantastic people over the years, and it’s
from this rich breadth and depth of work experience
that we offer you this information. We know it will give
you some great insight and tips to improve your own
business and career.

Our greatest satisfaction comes from helping people

and businesses make real lasting business improve-
ments. We want to make your working life easier and
less stressful. We want your customers to be happier
and of course, we want you to achieve significant bot-
tom line improvements, which will remain sustainable
for the long term.

We hope you enjoy what this report has to share.

We’ll also provide a resource section at the end of this
Benchmarking Report where you can gain access to a
lot more valuable, free information!
>>
Skyrocketing Costs –
Demanding Customers
You feel the pressure every single day. Supply Chain and
Logistics costs keep growing, along with the pressure to
maintain and even improve on your service, while keep-
ing the costs under control.

Getting a handle on where the opportunities for improve-

ment are is essential to an ongoing profitable operation
and the stress of trying to resolve key Supply Chain or
Logistics issues can really add up. It’s often difficult to
manage the day-to-day requirements of your regular job,
while at the same time, trying to handle all the many busi-
ness improvements that are expected of you.

We understand that you are expected to maintain service

levels, but this doesn’t need to be “at any cost”! Business-
es just like yours are throwing away millions of dollars
simply due to a lack of planning, process and sound man-
agement practices.

In fact, if no solution is found, your problems will continue

to snowball along with your costs and your service de-
livery will begin to suffer. These are all too familiar prob-
lems that keep many Executives awake at night.

There is a correlation though between superior service

and cost, and it might not be the kind of correlation that
you think! If you think that better service equates to high-
er costs read on — you might be surprised!
If you TRULY aspire to be the best, you
need to know how high that bar is set!
Consider this for a moment…if you wanted to break the world record for the high jump,
the first thing you’d need to know is how high the current record holder jumped. Sim-
ilarly, if you want to provide “Best in Class” service, you need to know how high your
competition’s performance bar is set.

Did you know that there are businesses out there, with truly efficient supply chains,
who manage to provide best in class service at HALF the cost of what their peers are
spending? That’s right, half the cost. That’s setting the bar pretty high.

We’re not trying to add toy our stress. In fact, the ability to achieve best in class service
AND best in class cost is rare (best in class = performance that is in the top 20% of
recorded results). Research from our database of 833 supply chains suggests that only
2% of them operate at best in class service, coupled with best in class cost.

However, research also shows that uncompetitive businesses fail, more often than not.
Consider the automotive industry. There are currently 67 brands worldwide, but…632
car brands no longer exist. If your supply chain is not operating at its optimal potential,
you run the risk of succumbing to that same fate, but it doesn’t have to be that way!

How much could your business be saving? How much could your service improve? Do
you know how your costs and service stacks up alongside your industry peers? Do you
have a true idea of how competitive your business is? If you’re not sure you are certain-
ly not alone, but in this situation, ignorance is NOT bliss!

Ignorance of the real facts adds up to a very dangerous business practice. If you don’t
know how your supply chain performs against your competitors and peers, how do you
know where to begin the improvements and how far behind you already are?

In a recent survey we conducted, we discovered that a full 61% of organisations did not
have a well understood, documented supply chain strategy and they didn’t know how
their performance compared within their market.

You see? You are not alone, but that doesn’t mean it’s a comfortable place to be. It
doesn’t need to be so difficult and you don’t need to figure it all out yourself.

That 2% of companies we mentioned who are achieving best in class service and cost
combines are not “super companies” and the people managing them are not “super
heroes”…the are regular companies and people just like you. The only difference is that
they have good comparative data and a proper supply chain and logistics strategy in
place.

We understand that it might seem to be almost impossible to figure out how to reduce
costs and improve service levels at the same time, but a growing number of businesses
are achieving this with their Supply Chain and Logistics operations and saving money.
So many things can go wrong if you don’t get your supply chain working effectively.
Stop jumping through high cost hoops
Stop performing and focus on the performance itself. Our business is all about
finding solutions to these problems and we’ve helped hundreds of companies and
people just like you. We can help you in very real, measurable, lasting ways. It’s what
we do and we have many ways to help, depending on your needs.

If you’ve never considered Benchmarking your supply chain and logistics perfor-
mance, you are missing out on the most popular and effective business manage-
ment tool used worldwide and we’d like to help you remedy that.

Guessing gets you nowhere

“You can’t improve on what you don’t measure.” How else are you going to know
how well your supply chain is performing? We measure and weigh our children to
make sure they are growing well, why wouldn’t we do the same for our business?

Benchmarking is about comparing and understanding performance; therefore mea-

surement is a critical ingredient in the process. Once measurements are made and
understood, then performance gaps may be identified and a comprehensive im-
provement plan can follow. Until then, you ‘re really just guessing at your direction.

Not knowing how your supply chain is performing compared to your competition
and peers really is a dangerous business practice. If you aspire to be amongst the
best, you need to know, “How good is the best?” Benchmarking provides hard data
and demonstrable metrics so that improvement initiatives may be accurately quan-
tified. Cost reduction opportunities need to be achieved in conjunction with service
improvements in order to truly be “best in class”. How high is that bar? Find out!

Perhaps one of the most compelling arguments to be made for striving to be best
in class, is that companies who provide best in class service are doing it for half the
cost of their peers. Survey data supports this, but you may wonder how the heck it’s
even possible.

Here are some of the answers from organisations that have successfully been able
to achieve this, i.e. demonstrable best-in-class service at half the cost:

• Get it right the first time, every time

“We don’t make many mistakes so there is less rework, less returns, less expediting
etc.”

• Focus on the detail

“Costs become readily apparent when you have a passion for service excellence.
You can’t look at one without unavoidably looking at the other.”

• Price Service Relationship

“Because our service is consistently superior and our customers know it and rely on
it, we both increased our market share, and also could afford to charge more than
our competitors.”
Winning the Popularity Contest
“Benchmarking is the most popular management tool in use, worldwide.”

Of all the management reporting reports and tools and available, Benchmarking was
ranked number one in a Bain & Company annual report and global survey. (Source:
Bain & Company Management Tools & Trends Report)

The survey encompassed 1,430 international executives from companies across a

broad range of industries and focused on a full twenty-five different management
tools that are available to executives.

Benchmarking took the number one preferred tool usage spot, knocking strategic
planning out of the top position. Why? Because benchmarking is seen as a priority in
achieving cost cutting in the business, while at the same time improving service. By
benchmarking first, strategic planning can then follow more effectively than ever.

Now where did we leave that compass?

If you don’t know where you’re going, a company really isn’t much help. If you don’t
know where you are beginning, a compass isn’t a great deal of help either!

In Stephen Covey’s inspiring bestseller “The 7 Habits of Highly Effective People” he

lists habit number two as, “Begin With the End in Mind”. This is exactly what we are
talking about!

Before you can set out an effective supply chain or business strategy, you need to
know where your business sits right now, in comparison to your competitors and
peers. You also need to know where you aspire to go, in order to be among the
best in class. Benchmarking provides the data required for you to get an overview
of where you are and then sets realistic targets towards overall supply chain excel-
lence. It also provides a roadmap that will enable you to understand how to bridge
the gap between your current performance and where you want to be.

Bring it On!
The importance of benchmarking isn’t limited to those businesses struggling to im-
prove and doesn’t fade away once you have your supply chain humming like a top.

Benchmarking provides a clear comparison against a group that includes your peers
and competitors. The better your performance, the better your opportunity to use
this information as a selling point to current and potential customers. When you
show that your supply chain has the advantage over your competition, it’s easy for
your customers to view you as their preferred supplier.
Backing it Up
The many benefits our clients receive from our Benchmarking Report are significant,
but we think it’s the best if you her it from them:

“Benchmarking Success has provided a great perspective to a wider Supply Chain

environment that has really helped broad my horizons and remove the Nestle’
blinkers.”
- Supply Chain Director, Oceania – Nestle

“…Regular updates of the Performance Improvement Report (PIR) tell me how my

business is performing…”
- National Logistics Manager – Energizer

“The support and advice of the Benchmarking Success team was invaluable in
helping us navigate through the process and the improvement opportunities iden-
tified will help us in the next phase of our supply chain excellence journey.”
- Asia Pacific Supply Chain Director – National Starch

Case Study
Using Benchmarking to Achieve Supply Chain Improvement
Published in MHD Supply Chain Solutions

(Note: Benchmarking Success is part of the Logistics Bureau Group)

This was done for a major IT distributor in Australia, who is part of the world’s larg-
est technology distributor and is a leading technology sales, marketing and logistics
company. As a vital link in the technology value chain, this IT distributor creates sales
and profitability opportunities for vendors and resellers through unique marketing
programs, logistics services, technical support, financial services and product aggre-
gation and distribution.

For over 30 years they have been connecting technology solution providers with
vendors worldwide, identifying markets and technologies that shape the IT indus-
try. The business in Australia services over 7,000 customers with a range of nearly
15,000 SKU’s and annual revenue of AUD 2.5 billion.

This IT client undertook to better understand its supply chain performance in meet-
ing customer service expectations in its Australian business. In order to facilitate
this project and to understand what best-in-class supply chain performance metrics
were for similar supply chains, they commissioned a supply chain benchmarking
review utilizing the services of Benchmarking Success (BMS). The primary tool for
undertaking this comparative study was the PIR supply chain Performance Improve-
ment Report and its detailed analysis.
The results from the completion of this survey questionnaire and extensive
report back from BMS revealed that from the entire database, a selection of
135 companies was extracted to form the benchmarking group on the basis
that these companies exhibited the primary characteristics of the supply chain
that most closely matched that of our major IT client.

Paramount amongst these were:

• Large number of SKU’s.

• Very high incidence of split case picks.
• Large customer base.
• Very high service level expectations.
• Relatively small order size.
• Very high transactional levels.

The comparative data was able to demonstrate, both holistically and at a

detailed level, how our client’s supply chain was performing against the bench-
mark group and very importantly, was able to highlight what the best in class
performance metrics were that they had sought to achieve.

Led by the director of supply chain, this formed the basis of developing a sup-
ply chain strategy based on gap analysis of performance and cost at that time,
to the sought after best in class targets. Indeed, this was the primary building
block in being able to develop and articulate the three-year supply chain strat-
egy with quantifiable targets and milestones.

Like any strategy implementation, it takes time to implement. However, by just

over two years into the program, many of the recommendations already were,
or were in the process of being implemented and was significant improvement
underway. There is better visibility across the extended supply chain and cus-
tomer service is more predictable in meeting their promises.

This major IT client case study is just one example of how the BMS PIR process
can identify the opportunities and facilitate the improvement of supply chain
performance, by understanding your performance and how it compares with
organisations operating similar supply chains.

Furthermore the understanding of the processes that best in class organisa-

tions use can assist in moving your business closer to this goal.
The results of our Performance Benchmarking
and improvement guidance, speaks volumes
Just look at this table below. Four companies are represented across four industries, CPG (Con-
sumer Packaged Goods), Industrial Supply, Pharmaceutical and Distribution/Wholesale.

For each organisation, Key Performance Indicators (KPIs) are shown at the point they conduct-
ed an initial Benchmark review, (the initial PIR) and then some time later, a second ‘Review PIR’.
Following the initial PIR the organisations were given guidance on the key areas to target for
business improvement, and mobilised internal teams, guided by BMS, to drive results. The results
shown in the ‘Review PIR’, some 18-24 months later speak for themselves. Just look down the list
of KPIs and you will understand the breadth and depth covered by our reviews and the outstand-
ing results achieved that have delivered real sustainable bottom line business improvement. Key
target areas were inventory reduction, reducing the number of times products were handled or
‘touched’, reduced costs and improved customer service levels. And the statistics that are now
shown? All of this inevitably leads to an uplift in sales, due to increased customer confidence and
better product availability!

Distributor/
CPG Industrial Supply Pharmaceutical
Wholesaler

Key Performance Review Review Review Review

Initial PIR Initial PIR Initial PIR Initial PIR
Indicators (KPIs) PIR PIR PIR PIR

Number of Suppliers 120 86 361 264 500 207 14 12

Number of product han-

8 4 6 5 12 4 12 6
dlings (receipt to delivery)

Stock turns 5 12 6 12 12 30 6 9

Not Not
Inventory Record Accuracy 85% 99% 99% 80% 99% 90%
measured measured

Delivery In Full (by line) 95% 99% 93% 97% 93% 99% 95% 99%

Delivery On Time 95% 99% 90% 93% 70% 99% 90% 97%

Purchasing costs (excluding

1% 0.25% 0.50% 0.50% 3% 0.25% 0.50% 0.25%
inventory cost), % of sales

Inventory management
Not
costs, 1.50% 0.50% 1.50% 0.50% 0.50% 0.50% 0.50%
measured
% sales

Warehousing costs, % sales 5% 2.50% 2.50% 1.50% 8% 2% 3% 2%

Transport costs (outbound),

4% 1.50% 6% 5% 1.50% 1% 2.50% 1.50%
% sales

Total supply chain cost Not

$300 $150 120 $300 $35 $150 $70
per order measured
And there’s more
We already now all the incredible opportunities that your business can take advantage of
through performance Benchmarking and by now, you have a good idea too! Still, we un-
derstand that your time is valuable and that you may have some unanswered questions, or
simply need to discuss it further with us.

In Summary
If you’re reading this report, chances are you’re ready to make some big changes. Choosing
the number one executive tool – benchmarking – could easily be the best move you make
this year, towards better service, a better bottom line and career advancement.

So, why benchmark your Supply Chain?

Consider the benefits:

• Understand how your business stacks up against your competitors and peers
• You can’t improve what you don’t measure (not with certainty)
• Find out how good you have to be amongst the best
• Companies that provide Best in Class service can do it at half the cost of their peers
• Benchmarking is the single most popular management tool in use, worldwide
• So you can “begin with the end in mind”
• Being at the top of your performance game is a stellar selling point

If your performance is not measured and benchmarked against your peers, competitors,
internal comparisons or other imposed targets, how can any perceived improvements ever
be truly validated?

Please ask yourself:

• Do you know how your costs and service compares against your peers?
• Are you competitive and if so, how do you know?
• Do you just not know, or do you not want to know?
• Is there empirical data available for your industry so that you can know?

We’ll answer that last question… YES, YES, YES! There is empirical data available for you,
right now!

You don’t have to struggle alone anymore!

You don’t have to struggle alone anymore! In fact, we wish you wouldn’t. The next move,
however, is up to you. Make it count! Get in touch with us today and begin your journey
towards easier planning, best practice, best in class service and a better bottom line. What
more could you want?
Get on the path to Best Practice Supply Chain
now!
If you are a manager in a medium to large business and would like to gain more information
about our Supply Chain Benchmarking and Improvement Services, just contact us as follows:

Via email: robyrne@logisticsbureau.com

Or call the 24 hour message line at +61 (2) 9194 2873 and leave your details.

One of our benchmarking specialists will then contact you to discuss this program and its suit-
ability for your business. Please understand that not all applicants are admitted to the Supply
Chain Benchmarking and Improvement Program and that places are limited.

I am so confident that you will be delighted with the benefits of our Benchmarking services, that
I’ll give you a ‘no brainer’ guarantee.

Our ‘No Brainer’ Guarantee

These Benchmarking services really do set your business on the path to massive cost and service
improvements. Every time.

To show you the value of this Benchmarking service to your business and the degree of confi-
dence that we have in the outcomes, I’ll make you this outrageous guarantee.

“If our Benchmarking report does not identify savings in your business that are worth at least ten
times the amount of the fees you have paid us, I will give you your money back.”

How can I be so confident? Because identifying savings of ten times the fee value is a ‘walk in the
part’. If I told you what we normally save our clients…you just wouldn’t believe that it’s possible.

Further Information
You may be curious to know more about our services and people. Please feel free to contact us
any time.

Logistics Bureau Consulting Services:

www.logisticsbureau.com/supply-chain-and-logistics-consulting-services/

Logistics Bureau Key Staff:

www.logisticsbureau.com/people/

Logistics Bureau Client List:

www.logisticsbureau.com/customers/

Client Testimonials:
www.logisticsbureau.com/customer-testimonials/

Benchmarking Success:
www.benchmarkingsuccess.com/