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Procurement KPIs
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Spend Managed Under Contracts

Production Schedule Adherence

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Category:  
Operational

Measures the percentage of total procurement spend that is managed through formal contracts with suppliers.

What it Measures ?

Tracks how much is spent under signed contracts.

Relevant StakeHolders 

Legal Teams, Compliance, Procurement

Why it Matters ?

Improves contract adherence for spend optimization.

In-depth Use Case / Real-world Example

A manufacturing company producing steel components calculates Spend Managed Under Contracts to track how much of its procurement is governed by formal supplier contracts. If the company spends ₹100 crore annually, and ₹80 crore is covered by formal contracts, the percentage of spend under contract is 80%. This helps ensure that the company benefits from negotiated terms and reduces the risk of maverick spend.

KPI Definition

Business Value

Movement Direction

Sample Formula

Spend Under Contractual Terms / Total Spend

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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