By tracking procurement metrics, businesses can increase the efficiency of their procurement process, track progress toward business goals, and identify areas for improvement.
Below are some commonly measured procurement metrics:
Purchase order cycle time
The average time it takes to process purchase requests and send them to suppliers.
Supplier delivery time
The average time it takes for a supplier to deliver upon receiving a purchase order.
Supplier defect rate
Defected items out of the total items supplied from a specific supplier.
Accurately supplied purchase orders out of the total purchase orders per supplier.
Total ROI of the procurement process
The ratio between the annual savings generated by the procurement group and the total yearly amount spent on procurement.