Benchmarking

Benchmarking in logistics is comparing a company’s performance metrics against industry standards or competitors to identify strengths and weaknesses.

Examples: A shipper compares its average detention times against industry averages, or a warehouse measures pick rates against best-in-class operators.

Advantages: Provides clear performance insights, encourages continuous improvement, and identifies cost-saving opportunities.

Challenges: Requires accurate, comparable data and may be misleading if peer groups aren’t relevant.

Real-world example: Gartner publishes annual supply chain benchmarking studies that global companies use to guide strategy.

Explain like I’m five: It’s like comparing your test score to the class average to see if you did well or need to study more.

FAQ: What’s the difference between internal and external benchmarking? Internal is comparing within your company, external is comparing with others.

Bottom line: Benchmarking helps companies measure progress, but success depends on using the right peers and metrics.