Internal benchmarking to assess the cost efficiency of a broiler production system combining data envelopment analysis and throughput accounting

Economic efficiency assessments based on Data Envelopment Analysis are scarce compared to technical efficiency studies, even in for-profit firms. Some aspects justify this scarcity, such as the difficulty to estimate accurate prices, given their variability over time. In many situations, external benchmarking is hindered due to organizations' unique nature and the barriers to sharing information considered critical to competitiveness. The use of internal benchmarking can overcome some of these difficulties. This study conducted an internal benchmarking analysis of a broiler production system, focusing on cost efficiency. We conducted longitudinal case-based research over six years (2014-2019). The concepts of throughput accounting of the Theory of Constraints were applied to structure the DEA model (inputs, prices, and output). The Critical Incident Technique was used to explore the effects of interventions on the production system's cost efficiency. The results show that the broiler production system could reduce 32% of the total cost per unit of production if the balance of inputs suggested by the DEA evaluation was used. This work contributes to the literature by showing the potential of internal benchmarking to explore the evolution of cost efficiency over time. From a practical perspective, this study is important for managers by showing how to measure the impact of management actions on performance, providing valuable information to guide continuous improvement.

Automated summary

This study conducted internal benchmarking analysis of a broiler production system using Data Envelopment Analysis, finding potential cost reduction by adopting balanced inputs suggested by the evaluation. Additionally, it is important for managers as it demonstrates how to measure the impact of management actions on performance, providing valuable information for continuous improvement.