UNIDO’s Subcontracting and Partnership Exchange (SPX) Programme is designed to tackle poverty by working to increase the competitiveness of local suppliers. Through profiling, benchmarking and upgrading suppliers, the Benchmark Index has become central to the development and success of SPX.
Supply chain localisation and cluster development are affected through a now well-established process of activities that culminate in the SPX matching large national and international buyers, from both the public and private sectors, with local suppliers that have been identified, assessed and enhanced if necessary. The process is flexible and tailored to local requirements, but broadly involves three stages for participating suppliers:
- Profiling provides a detailed audit of suppliers, including sectors they operate in, technical equipment, current products and services supplied, financials, customers, processes and people.
- Benchmarking-facilitated assessment of the supplier by a local trained adviser delivers an action plan for improvement and baselines their current ‘fitness to supply’.
- Upgrading activities enhance the suppliers’ capabilities and resources and allow them to compete effectively within local and international supply chains.
How it works
UNIDO licenses Benchmark Index (BI), a customised cloud-based benchmarking system, to help individual businesses develop and gain new supply chain contracts. BI’s international database contains more than 130,000 enterprises providing comparison coverage across all sectors down to a four-digit NACE level.
The benchmark findings are used for two primary purposes. The findings of the benchmark support upgrading activities to improve a business’s competitiveness. This takes a wide variety of forms, including securing funding to drive growth and sourcing technology enhancements to enable step change improvement in performance.
When businesses are found to meet the required standards through benchmarking, they are introduced to large government and international buyers. UNIDO uses the performance and practice capabilities of suppliers, evidenced by the benchmarking activity, to provide a supplier-buyer matching service. Where supplier capability is identified as being below the required minimum levels stipulated by potential purchasers, businesses can be supported to reach the standards.
Maintaining these standards leads to an increasing volume of supply needs being satisfied locally rather than from imports, ultimately leading to more sustainable economies and driving the financial health of participating countries, which enables developing countries to more readily compete in a global marketplace.
The Details
The benchmarking system has 2 variants: manufacturing and service. These are encapsulated into modules that combine qualitative ratios and qualitative questions. Collectively they cover the key areas enterprises need to be aware of and excel at to achieve business success. The system also demonstrates international best practices and offers an audit to help objectively assess readiness to participate in supply chains.
The underpinning structure used is Balanced Scorecard, which encourages a broad review across all key areas of the business: financial, customer, process, learning, and growth performance and practices.
An adviser trained in Benchmark Index then adds depth to the exercise through probing questions and cause-and-effect analysis, leading to a diagnosis of genuine need based on objective assessment. On this firm foundation, the business creates a strategic improvement plan to develop the areas identified as weak and linked to their vision and aspirations for the future.
Adviser Training
Because the consultancy markets in many of the UNIDO SPX countries are relatively immature, the Benchmark Index training programme goes beyond simply covering how the software works.
A large focus is placed on immersing delegates in the overall business improvement methodology, as well as essential business adviser skills to help them get the most from the tool and enhance their adviser skillsets. The training is practical with classroom-style learning using case studies which are supplemented by live benchmarks with real companies to help the advisers gain immediate first-hand experience.
Outcomes
So far, more than 2000 businesses have benefitted from the service, with more in the pipeline. The countries that have adopted the SPX Benchmarking service includes South Africa, China, Vietnam, Iraq, Pakistan, Kenya, Zambia, Mozambique, Cameroon, Tanzania, Uganda, Ghana, Cape Verde and Senegal. The service continues to expand.