KPI’s
Kpis, or Key Performance Indicators, are essential to the success of any procurement organization. By definition, KPIs are metrics that help assess the progress and performance of key objectives within an organization. In procurement, KPIs can range from measures of cost savings to supplier performance.
There are a number of different ways to go about defining KPIs for your organization. The most important thing is to make sure that they are aligned with your overall business goals. Once you have done that, you can begin to develop KPIs that will help you track and improve your performance in specific areas.
One way to define KPIs is to use the 5 Ps of Procurement: people, process, price, product, and supplier. Each of these can be further broken down into more specific metrics. For example, under people you might track training and development initiatives or employee satisfaction levels. Process could include measures like on-time delivery or order accuracy rates. Price might be tracked in terms of cost per unit or total spend under management. Product quality could be measured by customer satisfaction ratings or return rates. And finally, supplier performance could encompass a number of different factors such as delivery time or response time to customer complaints.
Of course, not every organization will have the same exact KPIs. The important thing is to tailor them to fit your unique needs and business goals. With the right KPIs in place, you can ensure that your procurement organization is running smoothly and efficiently while