Part II – Strategic Footprints – The Holy Trinity of Procurement Performance Metrics
Extending the thread that I left behind in my last blog on the nirvana of procurement performance metrics, here I am to offer my personal take on the second of this triad. Do, remember, the triad itself is a compilation of TEN must-analyze-metrics by our author, Richard Waugh, VP, Corporate Development at Zycus. So when we say “three”, we are actually talking of the three key areas of performance measurements that procurement’s got to track.
Just to recap, in the first blog we christened the first of the holy trinity of metrics as ‘Streamlining metrics’. We also concluded how your ratings on them serve as eligibility criteria of sorts for you to be able to perform well in the second one – The Supplier Management Metrics.
The second one then, you would notice, focuses very clearly upon getting the best out of the choicest. The kind of improvements you should be tracking here are – aggregation of as much spend as possible with as fewer suppliers as possible; right-size staffing per billion dollar of your spend; healthier percentage of resources allocated to strategic procurement activities; heavier resource allocation towards managing the critical-most suppliers; and top line impact as a consequence of supplier innovation.
For sure the world has begun to ask more of procurement than just documentation and timely invoice processing. Looking at the metrics then, I can confidently say that this arm of the triangle can be christened the “strategic footprints”which the procurement team leaves on its way to revolutionizing the paradigm of procurement’s influence on business performance. And the first step of strategy looks to be prioritization. Talk about staying relevant. Talk about having a strategic impact. It’s right here in these supplier management metrics!
For further reading on the TEN must-analyze-metrics by Richard Waugh, click on the download below to access the whitepaper- Analyze This – Top 10 metrics to strengthen organizational procurement practices.