The Procurement Glossary » Procurement KPI
Procurement KPI
Spend & Analytics
Definition
A quantified measure of procurement performance, such as savings, cycle time, compliance or supplier OTIF.
Explanation
KPIs make procurement's contribution visible and drive improvement. A balanced set spans value (savings), efficiency (cycle time, cost per order), compliance (SUM, contract compliance) and risk. They should tie to business goals, not vanity metrics.
Example
The dashboard tracks five KPIs: savings, spend under management, PO cycle time, supplier OTIF and contract compliance.
Related terms
- Key Performance Indicator (KPI) — A metric chosen to track progress toward a specific objective.
- Spend Under Management (SUM) — The proportion of addressable spend that is actively managed by procurement through contracts, sourcing and controls.
- Cycle Time — The total time taken to complete a defined process, such as procure-to-pay or requisition-to-order.
- Cost Savings — A reduction in the price or cost of a purchase compared with a baseline, delivered through sourcing or negotiation.
Related concepts
- Spend Analytics — Turning raw procurement transaction data into a clear, categorised picture of what an organisation buys, from whom, and where the savings are.
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Frequently Asked Questions
What is Procurement KPI?
A quantified measure of procurement performance, such as savings, cycle time, compliance or supplier OTIF. KPIs make procurement's contribution visible and drive improvement. A balanced set spans value (savings), efficiency (cycle time, cost per order), compliance (SUM, contract compliance) and risk. They should tie to business goals, not vanity metrics.
Can you give an example of Procurement KPI?
The dashboard tracks five KPIs: savings, spend under management, PO cycle time, supplier OTIF and contract compliance.
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