KPI, or Key Performance Indicators, are measurable values used to evaluate the success of a business’s procurement department. KPIs provide insight into how well the procurement department is performing in terms of cost savings, supplier relationships, and overall efficiency. By tracking KPIs, businesses can identify areas for improvement and measure the effectiveness of their strategies. Common KPIs for procurement departments include cost savings, on-time delivery, supplier performance, and inventory accuracy. Cost savings is an important KPI as it measures how much money the business is saving by purchasing goods and services from suppliers. On-time delivery is also important as it measures how quickly suppliers are delivering goods and services to the business. Supplier performance is another important KPI as it measures how well suppliers are meeting the business’s expectations in terms of quality, cost, and delivery. Lastly, inventory accuracy is important as it measures how accurate the business’s inventory is in terms of quantity and quality. By tracking these KPIs, businesses can ensure that their procurement department is performing at its best.
