Step by step in the right direction: controlled improvement of your purchasing function on the basis of KPIs
As purchasing manager or director, you are responsible for managing the goals set by the organization, such as the number of suppliers, spend under contract and increasing internal customer satisfaction. Valuable indicators of important purchasing processes, but to what extent are you able to really send in here? Do you have a weekly insight into the figures? Are you sure they are correct? And do you employ people who can identify the causes behind the figures, so that your organization can improve?
Many organizations determine a number of these indicators, the so-called KPIs, but remain dependent on setting up the right processes to start a performance cycle. How do we ensure that KPIs are more than an interesting yardstick? How do we develop rotary knobs for the organization that can be used to work in a targeted and controlled manner on improvement?
How do you arrive at a KPI?
A good KPI stems from the long-term objectives, the strategy. After all, the success of the organization is measured on the basis of whether or not to achieve the strategic goals. Critical success factors (CSF) arise from the strategy, helping to translate the strategy into clear objectives. These are factors that have a direct and high impact on whether or not to successfully complete the strategy. CSFs are qualitative in nature and provide direction (increase, improve).
Applicable KSFs for purchasing departments that meet the aforementioned objectives are for example:
- Increase the performance of suppliers
- Improve collaboration with important internal customers
- Increase the productivity of buyers
The CSFs are then measured on the basis of critical performance indicators (KPIs), which are neutral.
Do you have trouble drawing up the right KPIs, whether the stated KPIs are the right ones or about what your purchasing KPI dashboard could look like? Download the entire article below or contact Sander van der Laan directly 06-81318513