Navigating excellence: key aspects and KPIs for Procurement Director/Executive
Navigating excellence: key aspects and KPIs for Procurement Director/Executive
Important aspects of procurement director executive role
In the ever-evolving landscape of procurement, the role of a procurement director executive is
paramount to steering an organization towards strategic success. To ensure superior performance in
this high-level position, it is imperative to identify and measure key performance indicators (KPIs)
that align with the specific responsibilities of the role.
1. Procurement efficiency:
- Implement and assess processes that streamline procurement operations.
- Evaluate the speed and accuracy of procurement workflows to enhance efficiency.
2. Supplier relationship management:
- Monitor and enhance levels of supplier service to ensure strong partnerships.
- Assess the value for money in supplier relationships and identify and rectify any wasteful spend.
3. Operational impact:
- Evaluate how procurement activities impact overall operations.
- Assess the capabilities of the procurement team and implement strategies for improvement.
4. Cost efficiency and material management:
- Monitor the efficiency of material, maintenance, repair, and operations (mro), and asset costs.
- Implement indicators to track and improve material efficiency.
5. Project management and governance:
- Ensure the scope, budget, and deadlines of projects within the procurement domain.
- Uphold high standards of governance in all procurement processes.
6. Forecast accuracy and social responsibility:
- Evaluate and improve forecast accuracy to optimize procurement planning.
- Incorporate and measure social responsibility initiatives within the procurement framework.
As the procurement director executive oversees these critical aspects, the establishment of robust
KPIs becomes imperative to evaluate and enhance their performance continually. In the second part,
we will delve into a comprehensive list of KPIs, ensuring a meaningful and effective measurement
framework for the procurement director executive role.
Here are some suggested Key Performance Indicators
- % Completed Projects with ROI (Procurement Director Initiatives)
- % Projects on Time, Scope & Budget (Procurement Director Initiatives)
- $ Operating Profit Value
- $ Value of Procurement Savings
- % Variance to Budgeted Overheads (Procurement Director Staff)
- % Overhead Forecast Accuracy - 1 mth (Procurement Director Dept.)
- % Overhead Forecast Accuracy - 3 mth (Procurement Director Dept.)
- % Overhead Forecast Accuracy - 6 mth (Procurement Director Dept.)
- % Profit Contribution per Brand (Procurement Director Initiatives)
- % Supplier Contract Spend
- % Supplier OTIF (on time and in full)
- % Procurement bought on Contract (Procurement Director Dept.)
- % Personal Development Plans Completed
- % Employee Satisfaction Score (Procurement Director Staff)
- % Key-Staff Retention (Procurement Director Staff)
- % Staff Turnover (Procurement Director Dept.)
- % Staff Turnover of Top Performing Staff (Procurement Director Staff)
- % Planning Deadlines Achieved (Procurement Director Dept.)
- % Strategic Projects to All Projects (Procurement Director Initiatives)
- % Procurement Department SG&A to Revenue (Procurement Director Dept.)
- % Team Tasks Completed by Deadline (Procurement Director Dept.)
- % Variance to Expense Budget (Procurement Director Dept.)
- % Risks with Valid Mitigations
- $ Unit Cost
- % Production Variances
- % Personal Capability/Training Achieved
- % Skills Gap (Procurement Director Dept.)
- % Staff Capability/Training Achieved (Procurement Director Staff)
- % Agreed Succession Plans Implemented (Procurement Director Dept.)
- % Senior Jobs Appointed Internally (Procurement Director Dept.)
- % KPIs Benchmarked (Procurement Director Dept.)
- % Reportees Capability/Training Achieved (Procurement Director Staff)
- % Reportees KPIs Achieved (Procurement Director Staff)
- % Reportees Personal Objectives Achieved (Procurement Director Staff)
- % Training Plan Adherence (Procurement Director Staff)
- % Employment Equity (South Africa) (Procurement Director Dept.)
- % Affirmative Procurement Spend (South Africa) (Procurement Director Dept.)
- % Strategic Risks Mitigated (Procurement Director Staff)
- % Compliance with System Controls
- % Personal Tasks Overdue
Feel free to sign up for the KPI spreadsheet to access these and additional KPIs in a structured format that offers better context.
Watch the video below to see what you will get and how to use the KPI spreadsheet to take the guesswork out of KPIs
