Introduction to chapter (page 79)
In systems terms, the role of our competitors is to hinder us from being successful in achieving our critical success factors. Ignore them? We just cannot afford that. They are the spanner in the works; they constrain our ability to win business from our customers.
We must benchmark products, services and performance of our functions against the competition, of course. Much more important however is to foresee their operational initiatives and preemptively neutralize them.
Most important of all is to understand the speed at which they spin their own PEC (Plan-Execute-Check) loop. As we learn from John Boyd: “Every second faster than the competitor (in this loop) is a competitive advantage.“
For operational planning, benchmark versus your competitors
1. Select key competitorsYou just cannot focus on all competitors. Select the ones which you consider as key "constraint builders" - by critical success factor.
2. Operationalize competitors' plans
Benchmark your competitiveness versus key competitors' products and servicesWhat counts is customer's view. Get rated by customer's supplier rating schemes. (See example in book, Page 83)
Benchmark your competitiveness versus competitors' operational leadershipCompetitors' ability in operational leadership shows in two aspects:
Understand competitors' operational initiativesFor a sound operational plan you need to understand your key competitor's operational initiatives
Identify their performance in key processesFor example speed, cost, quality in issuing quotes, delivery, resolution of customer complaints, ...
Identify their competitiveness in spinning their PEC (plan-execute-check) cyclesThe principles of the OODA loop apply to operational leadership: the enterprise that spins their PEC cycles faster, will outperform their competitors.
3. Search their entire business systemTo correctly benchmark versus competitors you need to understand and search their entire business ecosystem - both internal and external.
Internal: by which principles have they organized their supply chain?
External: by which principles have they organized their distribution channels?