Sourcing Performance Metrics: Your Best Practices

  • This topic has 8 replies, 2 voices, and was last updated 8 years ago by Anonymous.
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  • #292172

    1. What metrics do you use to gauge your procurement team’s effectiveness in terms of support to your business partners?

    2. What are you doing around brand building efforts to communicate and interact with your functional peers and stakeholders?

     

    #293349
    Anonymous
    Guest

    1) Spend Under Management and a formal stakeholder management program 

    2) We are currently developing a Procurement branding and communications strategy and plan with the assistance of a marketing agency partner that we will use internally

    #293350
    Anonymous
    Guest

    1. Metrics

    a. Savings Tracker (savings vs. cost avoidance reviewed separately and with separate goals – heavier on hard savings)

    b. Survey to stakeholders to gather real feedback on process, time, savings, effectiveness in their mind, etc.

    2. Communication

    a. We have a formal procurement policy by where all indirect spend over a set value has to come through our team

    b. We hold annually a 2-3 hour “Non Merch Best Practices” session and invite all stakeholders in the organization – review consists of high level policy overview, intro of the team / categories, highlights on some big projects (our stakeholder partners present these with us), stakeholder award, etc.

    c. Word of mouth – some of key stakeholders will help to talk to other departments on the successes they’ve had working with procurement and give real examples

    #293351
    Anonymous
    Guest

    1. This is how we monitor our effectiveness:

    • We have KPI –Key Performance Indicator Dashboards
    • We manage and monitor Supply Expense as % of Net Operating Revenue
    • We manage actual expense/Budgeted Expense
    • We measure our progress toward SCO goals
    • Product, pricing and contract initiative tracking
    • Utilization project tracking
    • We decide what is “bench mark worthy”, what is subject to an RFP, direct collaboration, etc.
    • We measure our success against metrics relevant to our organization

     2. Please see this The Pathway to Collaboration: Best Practices Manual

    #293352
    Anonymous
    Guest

    1. The metrics used to evaluate the Procurement Teams performance includes the following:

    1) Time from receipt of request to outsource to final contract.

    2) Negotiated “cost reductions” from original proposal to final budget

    3) Frequent Stakeholder Meetings

    4) On-going performance evaluation of vendors

    5) Governance – Relationship Management of vendors

    2. What are you doing around brand building efforts to communicate and interact with your functional peers and stakeholders?

    Frequent Stakeholder Meetings

    #293354
    Anonymous
    Guest

    To answer #1… Last year we used a 12 question survey (some questions were rather lengthy)…. This year we are using a shortened survey (8 quick questions) and a Net Promoter Score (NPS). Next year I hope to reduce the surveying to just the NPS. One thing to note an NPS dictates that there should always be an open ended question following the NPS question. See below link for details on the NPS score.

    http://www.netpromotersystem.com/about/measuring-your-net-promoter-score.aspx

    Management has found 2 things to be valuable:

    1. A numeric score to monitor to make sure we are maintaining an appropriate level of customer satisfaction

    2. The feedback given in the commentary of an open ended question

    Interestingly enough, we found that respondents only answered the open ended question 18% before we supplemented the survey with the NPS. After we added NPS, the respondents commented 34% of the time. It seemed that they wished to explain the score that they gave us on the NPS. As we continue to have repeat customers, we are hoping that the shortened survey, or just an NPS will help us keep our response levels high. For reference purposes, the question we asked was… How likely is it that you would recommend S&P services to another colleague or department?

    To answer #2…

    Nothing at this point – would love to hear ideas!

    #293355
    Anonymous
    Guest

    1. What metrics do you use to gauge your procurement team’s effectiveness in terms of support to your business partners?

    We don’t have ongoing metrics. About the only time our manager contacts our customers in this type of scenario is when he is working on our evaluation. At that time he asks us for our top five customers and poses a number of questions to them. These questions are only asked once a year.

    2. What are you doing around brand building efforts to communicate and interact with your functional peers and stakeholders?

    We created a campaign to socialize that we are about helping the company save money. We made it in to a fun branding by using a character by name of Moolah for educating our customers, peers and stakeholders about how we can all contribute to helping the company save money.

    #293357
    Anonymous
    Guest

    1. What metrics do you use to gauge your procurement team’s effectiveness in terms of support to your business partners?

    • Our key metrics including goals towards influenced spend, influenced cost reductions (savings, discrepancies and cost avoidance), contracts reviewed (how many were written on our paper vs supplier), # and dollar value of PO’s, # and dollar value of invoices reviewed, # and dollar value of staff aug program that we manage
    • What are you doing around brand building efforts to communicate and interact with your functional peers and stakeholders?

    2. We designed our own brand mark for internal and external customers or suppliers, we’ve done Executive presentations, new hire presentations within all business units on who we are and what we do, informal and formal networking, providing excellent customer service to earn the respect and the business from our stakeholders. In the past 3 years this has netted us 4x the business.

    #293358
    Anonymous
    Guest

    Cycle time versus targeted SLA’s based on complexity of project

    Project load by complexity of project for load balancing 

    Savings

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