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2.2.2 Benchmarking

Benchmarking is a process that is widely used by logistics companies to improve their service. There are various types of benchmarking. Broadly, they can be listed under four headings:

Comparison with other companies helps an organisation learn from others' experiences and follow their steps in improvement. In some industries, operational performance indicators, such as cargo handled in unit time, per unit of assets used, etc. are used for this purpose. The fundamental aim in most benchmarking exercises is cost reduction, or improving efficiency of operations. Costs are mainly broken into the sectors of labour, equipment and space utility.

Some logistics firms have already refined their operations to such an extent that they are regarded as leaders in the industry. For them, increasing the quality of their output is not such an issue. Even they, however, continue to improve in incremental ways while improving other functions and their business partners. So, these firms would not focus so much on processes but more on their management systems.

The issue of quality in operations is important for many commercial reasons but most of all when we consider just-in-time inventory handling. JIT is discussed in your text. Read the section on JIT ands Kanban again to refresh your thinking.

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