How can benchmarking drive terminal performance by identifying unknown deficiencies?

In our experience of benchmarking bulk liquid terminals over the last 15 years, we’ve often found that companies are simply unaware of their performance shortcomings. Even more worryingly, some terminal managers are in complete denial. However, by benchmarking against their peers, we’ve helped these companies gain an in-depth, honest and insightful perspective of how they stack up against other players in the market.
Benchmarking provides an evidence-based input, driving home the facts and convincing management of the need to undertake performance improvement activities if they wish to remain competitive.
When presented with the findings from our terminal benchmarking programmes, companies are sometimes surprised or even angered, if they discover that their initial prediction of being ranked amongst the top performers is inaccurate. It can be a harrowing experience for management to learn that the likes of maintenance expenditure, terminal manpower time or their total terminal costs are significantly higher than the group average.
What happens next is crucial. For any terminal benchmarking programme to be worthwhile, the benchmarker must take action to improve the newly discovered performance gaps. Depending on the findings, a wealth of improvement actions could be needed. Obviously, improvement actions differ by terminal, however actions sometimes involve:

  • Differentiating costs – we encourage companies to identify costs they can and can’t control. It’s likely that there will be some costs that management simply cannot reduce (at least in the short term). The focus should be placed on the areas which can be controlled and represent the biggest performance gaps.
  • Restructuring – an organisational design review can help implement clear responsibilities for key areas such as operations, maintenance, management and projects. Furthermore, new structure often leads to improved communication and more efficient working, and as a result, downtime and manpower time is reduced.
  • Re-engineered work planning and monitoring systems – this helps terminals reduce non-value-added activities and ensures all cost and schedule metrics are tracked and any deviations reported and actioned.

Terminals are encouraged to benchmark on an annual basis in order to assess whether the companies subsequent actions from the previous years’ programme, has improved performance and reduced the gap between competitors.

Benchmarking can provide a wake-up call for complacency, serving the evidence that proves performance may not be as good as you think as compared to your peers.