key performance indicators for procurement

Key Performance Indicators for Procurement

Tom Veit

PROEBIZ Forum, Ostrava, 2016

© SABMiller 2014

Index

KPI Definition

Spend related KPI´s

Financial KPI´s

Operational and E-Sourcing KPI´s

Other KPI´s

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Key Performance Indicators

A set of quantifiable measures that a company uses to compare

performance in terms of meeting their strategic and operational goals

KPI Definition

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Spend related KPI´s used in Procurement

Total spend invoiced spend in the

company in $

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Spend related KPI´s used in Procurement

Addressable spend invoiced spend in the

company in $ we can

potentially touch

as Procurement

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Spend related KPI´s used in Procurement

Spend under control invoiced spend in the

company in $ physically

controlled by

Procurement

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Spend related KPI´s used in Procurement

Spend under mngmt invoiced spend in the of

company in $ physically

and actively managed

by Procurement

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Spend related KPI´s used in Procurement

Spend under contract invoiced spend in the

company in $ physically

and actively managed

and contracted by

Procurement

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Financial KPI´s

Cost Savings

Savings against last year price

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Financial KPI´s

Budget Savings

Savings against actual budget

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Financial KPI´s

Cost avoidance

Outperformance against market or category inflation/trend

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Financial KPI´s

Value enabler

Other improved goods or services with quantifiable value or where is missing

comparable base

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Financial KPI´s

Cash Flow Improvement

Cash injection by incrementally extended payment terms or reduced

inventory

* Or DPO, i.e. Days of Payable Oustanding representing company´s averagy payable period

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Operational KPI´s

# KPI name KPI description

1 PO Automatization PO´s through automated buying channels

2 Supplier consolidation YonY reduction of active supplier base

3 noPO noPAY Compliance with noPO noPay policy

4 ATF PO Compliance with no Retrospective PO´s

5 E-Sourcing Volume and value manage through e-Auction

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Other KPI´s used by Procurement

# KPI name KPI description

1 Savings per $ Captured savings per 1Mio USD (value or %)

2 ROI Captured savings vs. cost of function

3 Spend per FTE Value spend managed by 1 Procurement FTE

4 Active Supplier Base # of active suppliers per 1 Mio USD spend

5 Spend on Catalogue % of indirect spend on catalogs

Thank You