BENCHMARKING MEANS MORE THAN YOU’VE BEEN TOLD
The marriage of technology and data science has made parcel benchmarking more precise than ever.
ow many parcel shippers truly read the story their parcel data tells? The reason I ask: To have a discussion about parcel benchmarking against other businesses, the data — be it from invoices, transit and tracking information, your carrier agreement, or carrier rate and accessorial details — is the story. But that’s too often forgotten or ignored because the term benchmarking has become a generic buzzword that has lost real meaning — another piece
BY TRAVIS RHOADES
of marketing jargon used by vendors as a “me-too.” So, let’s first separate the cliché from the reality. Real benchmarks are not derived from surveys of self-selected respondents in unrepresentative samples. Benchmarking is not a measure defined by personal anecdotes or previous experiences — no matter how recent. Benchmarks are not rough estimates. Instead, effective and meaningful benchmarking is a precise mathematical exercise driven foremost by data (lots of data).
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Effective benchmarking is supported by industry expertise — useful in defining what is to be benchmarked and what important performance measures should be compared to that of peers (which don’t have to be limited to competitors, neighbors, or companies of similar size). It identifies the best types of peers and calculates benchmarks from within peer groups. When done correctly, benchmarking is a valuable way for companies to gain perspective on the effectiveness of their own performance, to set performance expectations, and to identify and prioritize areas for improvement. Through benchmarking, companies understand where they’re at and where