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Procurement KPIs
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Procurement Savings Achievement

Production Schedule Adherence

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Category:  
Analytical

Measures the total cost savings achieved through procurement strategies such as negotiation, strategic sourcing, and supplier consolidation.

What it Measures ?

How close we are to hitting our cost-saving targets.

Relevant StakeHolders 

CFOs, Procurement Heads

Why it Matters ?

Tracks progress toward procurement savings goals.

In-depth Use Case / Real-world Example

A manufacturing company producing industrial machinery calculates Procurement Savings Achievement by tracking how much it has saved through better procurement strategies. For example, if the company negotiated a 10% discount on steel, saving ₹5 lakh annually, and reduced logistics costs by ₹3 lakh through smarter shipping strategies, the total procurement savings would be ₹8 lakh. This KPI helps assess how effectively procurement is contributing to cost reduction.

KPI Definition

Business Value

Movement Direction

Sample Formula

(Actual Savings / Target Savings) * 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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