Benchmarking

Overview

One of the primary activities of the SAABC comprises of firm-level benchmarking. Firm-level benchmarking is being increasingly viewed by the local auto industry, including the OEMs, as being crucial to establishing world class standards amongst local suppliers. In support of this, the SAABC programme has been endorsed by the local automotive associations. The SAABC offers the following benchmarking benefits for members:

  • The objective assessment of relative competitiveness so as to identify opportunities for improvement through the application of proven practices, processes and experiences of other firms.
  • The alignment of strategic goals and operational priorities to ultimately improve competitiveness, profitability, and sustainability.

The firm-level benchmarking activities continue every year. The benchmark findings at an aggregated level have also assisted key stakeholders to better understand the competitiveness position and challenges facing local suppliers. Importantly, the firm-level benchmarking exercise undertaken by firms is not an end-point in itself.

The benchmarking process represents an important continuous improvement mechanism intended to objectively inform management decisions on competitiveness and sustainability challenges. A presentation of the findings and recommendations are provided to executive management and, together with the implications, are ‘workshopped’ and discussed to ensure maximum benefit. The findings, conclusions and recommendations contained in the benchmarking report are considered to provide important inputs into the company’s strategic and operational decision-making processes.

Benchmarking methodology

The benchmarking assessments undertaken for firms are based on a proprietary ‘Market Driver’ methodology. The Market Driver methodology defines six key determinants of operational competitiveness in the market:

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Inventory

Measuring inventory is a sound proxy for measuring cost control at manufacturers, with firms with low inventory operating just-in-time (JIT) systems and in control of costs

Quality

Customer returns reveal customer quality satisfaction, but offer insufficient indication of internal quality performance, with strong customer quality to be supported by low defects and strong supplier quality

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Reliability

High levels of consistency are crucial to any firm being reliable and operating flexibly, with the management of value chain reliability vital to achieving this

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Flexibility

Value chain flexibility is determined by the speed at which firms accept an order and convert this to a delivered product, with key value chain variables being flexibility of suppliers, operations and the customer interface

Human resources

Whether firms fail or grasp the opportunities afforded by future customer demands depends on their resource use, with the most critical of these being their management of human resources to ensure a developed, committed and productive environment

Innovation

A success determinant for any manufacturing firm is its ability to bring new products to market, with this linked to the ability of a firm to access technology

The benchmarking findings are assessed according to the three themes of:

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1. Growth and innovation

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2. Cost competitiveness

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3. Productivity

For the benchmarking analysis, comparators are grouped accordingly to the following categories:

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South Africa

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Developed country

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Less developed country

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Matching sub-sector

The benchmarking database comprises comparators representing the following sub-sector categories: