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Supply Chain KPIs
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Cost Savings through Strategic Sourcing

Production Schedule Adherence

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Category:  
Strategic

Measures the savings generated through strategic sourcing initiatives, such as supplier negotiation and process optimization.

What it Measures ?

Tracks money saved through smarter supplier negotiations.

Relevant StakeHolders 

Procurement Head, Strategic Sourcing Manager

Why it Matters ?

Enhances cost savings and procurement efficiency.

In-depth Use Case / Real-world Example

A company manufacturing electronics calculates Cost Savings through Strategic Sourcing by comparing the cost of goods before and after renegotiating contracts with suppliers or sourcing from more cost-effective suppliers. For example, if the company saves ₹10 crore annually after a strategic sourcing initiative, this KPI helps quantify the value of procurement optimization.

KPI Definition

Business Value

Movement Direction

Sample Formula

Savings Achieved / Total Procurement Spend

Should Aim For
1
2
3
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