Procurement KPIs

Here are the main KPIs for the Procurement. They are part of the Procurement Service Dashboard or Balanced Scorecard.

Please see the following table.

-> Recommended bibliography about procurement KPIs

Activity Subject Calculation
Cost Costs reduction Purchasing cost reduction (year vs previous year and vs target….)
Purchasing department cost ÷ purchased amount
Purchasing department cost ÷ saved amount
Inventory Holding Cost – IHC Inventory Holding Cost – IHC evolution vs target
Procurement cost Average cost of an order line (global and per supplier)
Acquisition Cost as % of gross sales
Total Cost of Supply as % of total company costs
Purchasing Strategy Amount purchased vs budget vs previous year
Suppliers ranking in % of total purchasing value (PARETO – ABC)
Inventory Inventory level evolution vs target
Terms of payment Average Term of payment evolution vs target
Delivery Average Delivery Time vs target
Value delivered with dispute (at COGS)÷ Total Value of the goods delivered (at COGS)
Global efficiency Number of active suppliers (year vs previous year and vs target….)
Number of active suppliers working on Just In Time, or EDI … and % of the number of active suppliers (according to the company organisation)
Average time necessary to satisfy a purchase order
Purchase price Purchase price reduction vs market price, vs last period
Operational efficiency Supplier service rate (f.e. : number of order lines delivered on time and conform ÷ total order lines delivered on the same period)
Inventory availability per supplier (number of available active SKUs ÷ number of active SKUs)
Sales forecasts Forecasts reliability Sales forecasts determined x times ago vs real sales on the considered period
Supply planning Planning reliability Supply plan made x times ago vs real supplies on the considered period
Supplier Purchasing annual value per supplier Purchasing annual value per supplier (year vs previous year and vs target….)
Ranking ABC Supplier purchasing value ÷ total value purchased
Number of supplier’s orders ÷ total number of orders
Payment Average Term of Payment vs target
Average Term of Payment vs contractual Term of Payment per supplier
Quality Delivery discrepancies Value (at COGS) of products in discrepancy ÷ total value of products delivered (at COGS)
Dispute Number of order lines delivered with dispute ÷ Total number of order lines delivered
Amount of the goods delivered with dispute (at cost)÷ Total amount of the goods delivered (at cost)
Goods returned Goods value returned by customers ÷ goods value delivered
Service Deliveries on time rate Number of on time deliveries ÷ number total of deliveries (in order lines, m3, tn…)
Lead time Average lead time (year vs previous year and vs target….) and deviation
Availability Shortage as % of number of references stored vs. Target
HR Purchasing productivity Number of tenders, purchasing orders … (according to the organization) per purchasing FTE per period
Number of suppliers per purchasing FTE
Cost per tender, purchasing order… per buyer
Supply planning productivity Average number of orders or order lines per supply planner FTE
Average time necessary to make an order
Number of active SKUs (year vs previous year and vs target….)

Recommended bibliography