How to measure Procurement Performance?

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Procurement is a vital business function and impacts the performance of an organization. It may affect product quality, costing, timely delivery, and customer satisfaction. So it is important for organizations to monitor and improve, performance and health of procurement. Procurement KPI metrics help organizations to track and report performance and effectiveness of procurement in meeting business objectives.

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W H Y Y O U S H O U L D M E A S U R E P R O C U R E M E N T E F F E C T I V E N E S S P r o c u r e m e n t K P I s m e t r i c s P o w e r f u l p e r f o r m a n c e m a n a g e m e n t t o o l s C o n n e c t p r o c u r e m e n t t e a m s t o k e y s t r a t e g i c p o i n t s P r o v i d e c l e a r v i s i b i l i t y o n i m p a c t o f p r o c u r e m e n t a c t i o n s I d e n t i f y a r e a s o f i m p r o v e m e n t i n P r o c u r e m e n t p r o c e s s R e s u l t i n w e l l - f o c u s e d p r o c u r e m e n t t e a m P r o v i d e s A c t i o n P o i n t s t o i m p r o v e O r g a n i z a t i o n s u c c e s s W W W . F O R C E I N T E L L E C T . C O M V i t a l I m p o r t a n t F u n c t i o n I m p a c t s P r o f i t a b i l i t y o f O r g a z n i z a i t o n M o n i t o r I m p r o v e P e r f r o m a n c e T r a c k R e p o r t E f f e c t i v e n e s s o f P r o c u r e m e n t I f y o u c a n m e a s u r e i t y o u c a n i m p r o v e i t P r o c u r e m e n t K P I s a n d m e t r i c s t o M e a s u r e I m p r o v e P r o c u r e m e n t P e r f o r m a n c e I n v e n t o r y K P I s C o s t o f P u r c h a s e O r d e r C o s t R e d u c t i o n C o s t A v o i d a n c e P u r c h a s e C o s t K P I s P r o c u r e m e n t R O I E m e r g e n c y P u r c h a s e I n v e n t o r y C a r r y i n g C o s t I n v e n t o r y A g i n g I n v e n t o r y T u r n o v e r R a t i o P u r c h a s e O r d e r C y c l e T i m e N o . o f S u p p l i e r s L e a d T i m e S u p p l i e r R a t i n g s

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