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"Benchmarking in purchasing: definition and important aspects for purchasing specialists"
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Benchmarking in a nutshell:
Benchmarking is a systematic process for comparing products, services and processes with the best competitors or industry-leading companies. In purchasing, this method enables the identification of optimization potential in prices, supplier relationships and procurement processes through a structured comparison with best practices.
Example: An automotive supplier carries out a 6-month benchmarking project, compares its purchase prices for steel components with three leading competitors and identifies a savings potential of 12% by adapting its procurement strategy and supplier selection.
Contents
What is benchmarking in purchasing?
Benchmarking in procurement is a systematic process in which a company's own procurement practices and performance are compared with those of other companies or industry standards. The aim is to evaluate the efficiency and effectiveness of procurement processes, identify best practices and enable continuous improvements. This comparison enables companies to identify strengths and weaknesses and initiate targeted measures to optimize processes.
Core elements of benchmarking in purchasing
Significance for purchasing
In purchasing, benchmarking makes a decisive contribution to strengthening a company's competitiveness. Systematic comparison not only optimizes cost structures, but also makes processes more efficient. This leads to better negotiating positions with suppliers, higher quality procurement and ultimately to increased corporate success.
Guide: Benchmarking in purchasing - comparing key performance indicators and best practices
Benchmarking in purchasing: from manual analyses to real-time benchmarking
Building on the theoretical foundation of procurement benchmarking, practical implementation is a key factor for competitiveness and efficiency. Traditional methods are often no longer sufficient in today's fast-moving business landscape. The need for fast, data-based decisions requires a shift towards modern benchmarking approaches that enable processes to be continuously optimized and dynamically adapted to market changes.
Old: Manual benchmarking
Traditional approach: In traditional practice, benchmarking in purchasing was mainly carried out manually. Companies collected data through extensive market analysis, surveys and manual data entry. The comparison processes were time-consuming and only provided a static view of performance as updates were infrequent. Tools such as Excel spreadsheets and simple databases served as the main instruments. This resulted in limited transparency, slow response times and made it difficult to react quickly to market changes or internal performance shortfalls. In addition, the accuracy of the data was often impaired, which reduced the reliability of the analyses.
New: Real-Time Benchmarking
Real-time benchmarking: Modern approaches rely on digital technologies and enable continuous, automated benchmarking in real time. By using specialized software solutions, cloud computing and big data analytics, purchasing processes can be continuously monitored and compared with current market standards. AI in purchasing and machine learning help to identify patterns and create forecasts. This leads to greater transparency, faster decision-making processes and the ability to react proactively to trends and changes. Practical benefits include a reduction in procurement costs, optimized supplier relationships and increased efficiency in the purchasing department.
Practical example: Mechanical engineering industry
A leading mechanical engineering company introduced a real-time benchmarking system in purchasing. By integrating live market data and internal performance indicators, the company was able to reduce procurement costs by 18%. The transparency of supplier evaluation made it possible to reduce delivery delays by 25%. In addition, the procurement cycle was shortened by an average of 30% as decisions were made more quickly based on up-to-date data. The purchasing department was able to deploy resources more efficiently and made a significant contribution to increasing the company's overall profitability.
Conclusion on supplier evaluation through benchmarking
Benchmarking in purchasing is an indispensable tool for the continuous improvement and optimization of procurement processes. By systematically comparing themselves with industry leaders, companies can not only realize cost savings but also increase their process efficiency. Success depends largely on careful analysis, the right choice of partner and the consistent implementation of recognized best practices. With the trend towards digital, AI-supported benchmarking solutions, this strategic tool will continue to gain in importance in the future.
