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Procurement KPIs
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Contract Utilization Rate

Production Schedule Adherence

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Category:  
Analytical

Measures the percentage of contracted goods and services actually purchased compared to what was agreed upon in the contract.

What it Measures ?

What percent of available contracts are actively used.

Relevant StakeHolders 

Contract Managers, Legal Teams

Why it Matters ?

Ensures effective contract usage.

In-depth Use Case / Real-world Example

A manufacturing company producing industrial pumps calculates the Contract Utilization Rate by tracking how much of its total procurement spend is aligned with contracts. For example, if the company has a contract for ₹50 crore worth of raw materials and ends up purchasing only ₹40 crore worth, the Contract Utilization Rate is 80%. A higher rate means the company is maximizing its contracted terms, ensuring price stability and favorable conditions.

KPI Definition

Business Value

Movement Direction

Sample Formula

(Contracts in Use / Total Contracts) * 100

Should Aim For
1
2
3
Track Similar KPIs
Supplier Scorecard Performance
Measures the overall performance of suppliers based on a set of criteria such as quality, delivery, and cost.
Purchase Order Accuracy Rate
Measures the percentage of purchase orders that are issued without errors in terms of quantities, prices, and specifications.
Urgent Procurement Percentage
Measures the percentage of procurement orders that are classified as urgent, typically requiring faster processing and delivery.
Supplier Fulfillment Efficiency
Measures how efficiently suppliers meet order requirements, including quantity, quality, and delivery schedules.
Sourcing Cycle Time
Measures the time taken to complete the sourcing process, from identifying suppliers to awarding contracts.
Invoice Rejection Rate
Measures the percentage of invoices rejected due to discrepancies or errors in billing.
Spend Managed Under Contracts
Measures the percentage of total procurement spend that is managed through formal contracts with suppliers.
e-Procurement Adoption Rate
Measures the percentage of procurement activities conducted through electronic or digital platforms rather than manual processes.
Procurement Efficiency Cost
Measures the total cost of procurement activities in relation to the value of goods and services procured.
Order Delivery Lead Time
Measures the time between placing an order with a supplier and receiving the goods.
Active Supplier Count
Measures the number of suppliers actively engaged in providing goods or services to the company.
Invoice Accuracy Rate
Measures the percentage of invoices received that are free from errors in terms of pricing, quantities, and terms.
Contract Approval Cycle Time
Measures the time taken to review, negotiate, and approve contracts from initiation to final approval.
Order Accuracy Percentage
Measures the percentage of orders that are received as requested without any discrepancies or errors.
Supplier Rework Rate
Measures the percentage of goods received from a supplier that require rework or corrections due to quality issues.
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