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Live Chat 10/30: 10 Metrics to Improve Procurement Performance

In order to clearly demonstrate its value to the organizations and to achieve continuous improvement, procurement organizations need to measure performance in a variety of ways. However, most organizations aren't using the most useful metrics.

“If you polled most procurement executives today, about their number one metric, and what they are measured against, it remains cost reduction. That's still importnat but there are other emerging metrics that allow procurement organizations to find new sources of value,” said Richard Waugh, vice president of corporate development at Zycus.

We'll be talking with Waugh about his top 10 list of procurement metrics to find out both about how traditional metrics can remain useful and how new metrics should be applied for additional information.

Join us in the EBN Chat Area tomorrow, Thursday, October 30, at 2:00 p.m. EST (11:00 a.m.) PST for a lively discussion. In the meantime, click on the image below to see the top 10 procurement metrics that add value to procurement performance.

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

8 comments on “Live Chat 10/30: 10 Metrics to Improve Procurement Performance

  1. Hailey Lynne McKeefry
    October 31, 2014

    Take a look at our archived dialogs to see the conversation about this topic. We had some great questions! Thanks to all who attended.

  2. Hailey Lynne McKeefry
    October 31, 2014

    What are the most important metrics used by your purchasing organization? Are there metrics that you are abandoning as less useful?

  3. FLYINGSCOT
    November 3, 2014

    I understand why “cost reduction” is the number one metric for most but I would have hoped that some execs valued other metrics just as highly.  Metrics that differentiate or innovate can sometimes be more rewarding in the grand scheme.

  4. Ashu001
    November 4, 2014

    FlyingScot,

    What you point out is quite a fair criticism of most Supply Chain managers out there.

    However(or unfortunately) this is the way things are structured at most Firms today(including Executive Compensation packets).

    One of the first things any Analyst asks the Company CEO,CFO,etc on Conference Calls is what is the Share Buyback going to be? What is the Dividend Payout going to be?

    Almost nobody asks the following Questions-

    1)how much are you spending on R&D?

    2)Will you be raising Employee(Rank& File) salaries aggressively to recruit Best in Market Talent across the Board?

    3)what are you doing to become more Environmentally sustainable going ahead?

    4)What are you doing to ensure that you are always ahead of the curve in this space?

     

    I hope you get the picture here.

    Unless the Wall Street Community changes tack (or the company goes Private)none of these pressures are going away.

    Regards

    Ashish.

  5. Hailey Lynne McKeefry
    November 4, 2014

    @flyingscott, i think that newer metrics are emerging. Richard put cost reduction at #5 for exactly that reason. It's one that you can only take so far–you cut to the bone and you are done.

  6. Hailey Lynne McKeefry
    November 4, 2014

    @Tech4People, you make a good point about being willing to invest in talent. I would add that organizations should also be willing to invest in helping thier supply chain pros get additional education so that they can then apply newly-gained expertise to the organizations's supply chain activities.

  7. Ashu001
    November 22, 2014

    Hailey,

    Education is a never-ending game.

    You stop learning and you stop Innovating.

    Anyone who wants to continue to stay at the top of the Game here has no choice but to keep getting educated and learning new stuff over and over again.

    Its an undisputed fact .

    All this additional Education and newly gained expertise applied in the Supply Chain can change the way the Supply Chain works for sure;Saving Companies tremendous time and Money in the process.

     

  8. Ashu001
    November 22, 2014

    Hailey,

    Newer Metrics are always emerging but how many of those are long-term sustainable and so should be implemented into Basic Supply Chains?

    I was recently reading about the UK's first “Poo Bus”;and it really had me thinking can we actually design Supply Chains like that which are 100% sustainable and Self-Sustaining?

    Think about it;You won't really need Diesel,Natural Gas or Electricity to power your City Buses anymore if this technology really kicks on on a mass scale-http://www.bbc.com/news/uk-england-bristol-30115137

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