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What is Supplier Benchmarking? Definition

What is Supplier Benchmarking? Definition

Supplier benchmarking is the process of comparing a company’s performance against other companies in the same industry or market. The aim is to identify areas where the company can improve its performance and become more competitive. This process can be applied to any area of a company’s operations, from manufacturing to customer service. It is a useful tool for identifying which areas of the business need to be improved and for setting targets for improvement. In this blog post, we will explore the concept of supplier benchmarking in more detail. We will look at its advantages and disadvantages, and we will also provide a step-by-step guide to conducting a supplier benchmarking exercise.

What is supplier benchmarking?

Supplier benchmarking is the process of measuring and comparing the performance of suppliers against each other. This can be done in a number of ways, but typically involves looking at factors such as quality, cost, delivery, and flexibility.

The aim of supplier benchmarking is to identify the best performing suppliers so that they can be used as a model for others to follow. This can help to improve the overall performance of the supply chain and make it more efficient.

There are many benefits to supplier benchmarking, including:

– improved supplier performance
– identification of areas for improvement
– better negotiating power with suppliers
improved communication with suppliers

The benefits of supplier benchmarking

Supplier benchmarking is the process of identifying and evaluating the best performing suppliers within a particular industry or sector. This information can then be used to improve the performance of the company’s own suppliers.

There are many benefits to supplier benchmarking, including:

1. Improved supplier performance: By identifying the best performing suppliers, companies can learn from their example and implement similar practices within their own organization. This can lead to improved supplier performance overall.

2. Cost savings: Identifying areas where your company’s suppliers lag behind their peers can help to identify potential cost savings opportunities. Implementing the practices of the best performing suppliers can lead to significant cost savings for your company.

3. Increased competitiveness: In today’s global marketplace, it is essential for companies to be as competitive as possible. Benchmarking your suppliers against their peers can help you identify areas where your company may have a competitive advantage or disadvantage, and take steps to improve your overall competitiveness.

How to get started with supplier benchmarking

Benchmarking your suppliers is a great way to ensure you’re getting the best possible value for your spend. Here’s a step-by-step guide to get started:

1. Define your criteria. What are the key factors that are important to you? Cost is obviously one, but quality and delivery time are also important considerations.

2. Research your options. Once you know what you’re looking for, it’s time to start researching your options. Use Google, social media, and industry resources to find potential suppliers.

3. Request quotes. Once you’ve narrowed down your list of potential suppliers, reach out and request quotes from each one. Be sure to include all of your criteria in the request so you can accurately compare apples to apples.

4. Compare and contrast. Now it’s time to analyze the quotes you received and choose the supplier that offers the best value for your specific needs.

The different types of supplier benchmarking

Supplier benchmarking is the process of assessing and comparing the performance of suppliers against each other. It can be used to identify areas for improvement, set targets and track progress over time.

There are different types of supplier benchmarking depending on the focus of the assessment. Common types include cost, quality, delivery and service. Each type will have its own set of metrics and methods for comparison.

Cost benchmarking looks at the total cost of ownership for a product or service. This includes both direct and indirect costs such as raw materials, labour, overhead and shipping. Quality benchmarking assesses the quality of products or services against standards or customer expectations. Delivery benchmarking compares lead times, on-time delivery rates and other measures of timely fulfilment. Service benchmarking looks at factors such as response times, resolution rates and customer satisfaction levels.

Supplier benchmarking can be a useful tool for buyers to drive improvements in supplier performance. It is important to choose the right type of benchmarking for the desired outcome and to use reliable data sources for comparisons.

Supplier benchmarking case studies

There are many ways to benchmark suppliers, but some common methods include studying supplier performance metrics, conducting customer surveys, and collecting data from supplier performance reviews. Below are three examples of how companies have used supplier benchmarking to improve their business.

1. Company A conducted customer surveys to assess which attributes were most important to their customers when choosing a supplier. They then collected data on these attributes from supplier performance reviews and created a scoring system to compare suppliers. Based on this analysis, they were able to identify top performers and work with them to improve their service levels.

2. Company B studied supplier performance metrics such as quality, delivery, and cost. They used this information to create a scorecard that they shared with suppliers. This allowed them to quickly identify areas where each supplier needed improvement. They then worked with the suppliers on action plans to improve their scores.

3. Company C collected data from supplier performance reviews and identified both positive and negative trends. They shared this information with suppliers in quarterly meetings. This helped them hold suppliers accountable for their performance and identify opportunities for improvement.


Supplier benchmarking is a way for businesses to compare their suppliers against each other in order to identify areas where they could improve. By comparing your suppliers against each other, you can get a good idea of who the best performers are and what areas need improvement. Additionally, supplier benchmarking can help you negotiate better deals with your suppliers, since you will have a good understanding of their relative strengths and weaknesses. Overall, supplier benchmarking is a valuable tool that can help businesses improve their operations and save money.

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