The 10 Procurement Metrics that Matter in 2021

Unleashed

What is procurement? In simple terms business procurement is the process of locating and acquiring goods and services from external sources for the business to use. Procurement activities include planning, sourcing, and negotiation, along with risk management, legal and value analysis.

My Take: Metrics that Matter

Supply Chain Shaman

While Joe is trying to balance the feedback from Filipe and Frank, he is often asked to change his metric targets by his CFO named Lou. After two years of research, I think that we throw the supply chain out of balance and limit its potential through the use of traditional and functional metrics. It is for this reason, that I believe that the traditional SCOR Model metrics are problematic. Achieving Balance in Metrics. Last week, I held my new book in my hand.

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3 Core Metrics & 10 Soft Metrics for Measuring Supply Chain Performance

GlobalTranz

3 Key Metrics for Measuring Supply Chain Performance Beyond Cost Reduction. Inventory measurement is critical and it is money after all in that it took a capital expense to procure. The goal is to keep inventory levels at a minimum to meet customer needs. Review Inventory turns and Return on Assets. For clarity, in measuring supply chain performance, we should be focusing on: inventory, working capital, and time.

Supply Chain Dashboards – Key Metrics For Manufacturers

Silvon Software

As I mentioned in my previous post, Sales Dashboards – 16 Metrics for Manufacturers , a strategy for measuring business performance should also incorporate metrics that focus on the supply chain and other operational areas of the enterprise.

Understanding the procure to pay process

Unleashed

The procure to pay process is complex and far more than simply making a phone call, or sending a few emails to arrange the purchase of goods. Strategically approaching the procure to pay process can see your company reap the rewards. 8 steps in the procure to pay process.

Is Inventory Waste or an Asset?

Supply Chain Shaman

We were discussing the results of the planning benchmarking work that we have just finished, and I was sharing some insights on inventory management when one of the panelists emphatically stated, “Inventory is a waste to manage. We feel so strongly about this that we do not have an inventory planning role.” His feeling was that inventory is an asset to manage. Inventory is both. Inventory management is a complex subject.

Why Is Promotion Planning Important In Inventory Management?

Solvoyo

Why should we consider Promotion Management in Inventory Management? Retail companies, whether it be e-commerce, brick-and-mortar, or both, care about the inventory they keep. Therefore intelligent inventory management benefits the business results as well as the brand image.

SanDisk’s Story of Customer Segmentation Strategies Using Inventory Postponement

Supply Chain Shaman

I find that in this world of the global multi-national that procurement processes have become convoluted and increasingly complex. (In In my opinion, we have made procurement increasingly complex without adding value. In my research, I find that the companies with the most progressive procurement processes also have the most advanced customer supply chain process evolution.)Without

Collaboration? When It Comes to Cash-to-Cash, We Don’t Know How to Walk the Talk

Supply Chain Shaman

Inventory, in this time of uncertainty, is the organization’s most important buffer to protect against variability. However, organizations are not good at managing inventory. Cash-to-Cash Metrics. Cash-to-cash is a compound metric: (Days of Receivables+Days of Inventory)-Days of Payables=Cash Conversion Cycle. In times of growth, when companies are funding inventory builds, cash is needed. Inventory. Days of Inventory by Industry.

A New Decade: Give Science A Chance

Supply Chain Shaman

Only four percent of companies compared to their peer groups improved balance sheet performance of growth, operating margin, and inventory turns. When compared to pre-recession years, we ended the decade with twenty more days of inventory. Days of Inventory Comparison.

The Supply Chain Detective™ and the Inventory Turnover Mystery!

Supply Chain Game Changer

Featuring Our 10 Best Inventory Management Articles! As I settled into the job and started learning, and studying, the various Supply Chain metrics I was surprised when I looked at the Inventory Turnover performance of the company. The Inventory Turnover Mystery had been solved!

Understanding Supply Chain Management

SupplyPike

Supply Chain Management (SCM) is a systematic and controlled procurement operation. Procurement usually comprises a diverse range of suppliers chosen according to a conceived ability to supply merchandise at the right price. Inventory Map. Learn about.

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4 Reasons to Integrate Order-to-Cash & Procure-to-Pay

OneSCM

The ease of implementing and onboarding supply chain management solutions gives wider visibility in manufacturing, as well as orders and inventory. Bundling order-to-cash and procure-to-pay functions not only gives companies a holistic view of their supply chain operations, but also improves decision-making and business growth. In some instances, sales can become risky; procurement staff maintain higher buffer stock levels as a safety net.

Which Metrics Matter? Interview with Philippe Lambotte

Supply Chain Shaman

My journey to understand supply chain Metrics That Matter started three years ago. When I sat down to write the book, Bricks Matter, I believed that companies had used supply chain technologies to reduce operating margin and improve inventory turns. We are currently mapping the progress of all public manufacturing, distribution and retail companies on three factors: Strength: Year-over-year improvement on operating margin and inventory turns for the past six years.

WMS and Cycle Counting: How to Reach Inventory Management KPIs

Veridian Solutions

Greater control and efficiency in modern warehouse management rests on the reliability and accuracy of your inventory management processes. Warehouse Managers need to understand the challenges of cycle counting, how the right KPIs can help, and how to leverage WMS and cycle counting best practices to develop the best inventory management KPIs. Failure to track replenishment and procurement activities. A Guide to the Warehouse Metrics Supply Chain Execs Should Track.

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The Reorder Point Formula: Everything You Need to Know

Unleashed

A carefully calculated reorder point is therefore critical to good stock control, and keeps your key metrics looking healthy for your next inventory report. Growing product businesses should manage their stock using reliable inventory management software.

Building a Triple A Supply Chain: Ten Tactics That Work

Supply Chain Shaman

Over the last six years, we studied the connection between business results (growth, operating margin, inventory turns and Return on Invested Capital (ROIC)) and the link to company characteristics. We consistently see that companies focused on functional excellence–a focus within a functional silo like manufacturing, transportation or distribution– or singular metrics– like inventory or costs– underperform against their peer groups.

Why Financial Reengineering Does Not Equal Supply Chain Improvement

Supply Chain Shaman

Snow fell last night as I worked on my last Supply Chain Metrics That Matter report. The concept of the Effective Frontier is that best in class companies align functional metrics to balance growth, cost, inventory and Return on Invested Capital (ROIC) performance while balancing customer service metrics. Ironically, most companies are very entrapped in measuring and rewarding functional metrics which degrades overall improvement.

Inventory Turnover – A Formula For Achieving Game Changing Results!

Supply Chain Game Changer

As we have discussed in other blog posts we have tackled Inventory Turnover several times, amongst many other challenges. Your challenge may be trying to improve Inventory performance or trying to create a transformational improvement in some other area. There are many, many metrics that are involved in running a business. True change comes from attacking the processes that affect the metric you are looking to improve. Subscribe Here! Email Address.

The Beginner's Guide to Inventory Control and Management

Supply Chain Opz

What is Inventory Control? Here we will try to answer most common questions about Inventory Control and also provide additional resources you can use. What is Inventory Control? Inventory Control can be defined as below: “Inventory control is the function responsible for all decisions about all goods and materials in an organization. Inventory control often starts with how to know the demand of particular product. What is Inventory Cost?

Excess and Obsolete Inventory: You’re All Responsible for It!

NC State SCRC

The Supply Chain Resource Cooperative held its first ever “Executive Roundtable on Excess and Obsolete Inventory” on the NC State campus on October 25, 2017. In the end, excess and obsolete inventory occurs because of mistakes, mis-aligned decision-making, and lack of consideration of the cost of inventory in countless decisions, including product design, sales forecasting, sales and operations planning, and lack of awareness. Measure life cycle inventory cost.

What Gets Measured Is What Gets Done!

Supply Chain Game Changer

As with many aspects of your business there can literally be dozens and dozens of different metrics. Results Metrics and Contributing Factor Metrics. This is the high level objective and this is the Results metric. Every other metric is subordinate to the Results metric. Separately there are Contributing Factor metrics. While Contributing Factor metric target attainment is important, it is not the real result you are after. Subscribe Here!

5 Procurement Strategies For Small Medium Enterprises

CormSquare

staffing, financing, inventory management, customer service, marketing etc. Subsequently, procurement tends to be an afterthought, when it should be approached strategically! Small businesses spend between 40% – 65% of sales revenue on procurement of inputs. Following are the 5 strategies that can help SMEs in nearly any phase of their procurement efforts. Improved Internal Procurement Processes. Outsource Procurement Needs.

Assessing the True Return of Procurement Transformation on Total Shareholder Return: A Tough Proposition

NC State SCRC

In my earlier book with Gerard Chick on “ The Procurement Value Proposition “, we advance the notion that buildoing a business case for investing in people, process, and technology improvement in procurement is key. Many procurement assessments developed by consultants seek to provide an answer to the question “how far along are you relative to your peers in your procurement transformation journey”, and “which processes are lagging compared to your peers?”

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Writing: Working on My Book

Supply Chain Shaman

Interview for Metrics That Matter. My kitchen table is piled high with interviews for the upcoming book, Metrics That Matter. He is responsible for manufacturing, procurement, supply chain planning, logistics, quality, social responsibility and final product engineering. I recently interviewed him for my upcoming book, Metrics that Matter, that publishes in August 2014. Which metrics do you think matter to supply chain excellence?

Days Inventory Outstanding: Definition, Formula, Calculation

EMERGE App

One of the crucial elements of running any business is how effectively one can monitor its inventory. Over the years, numerous tools and ratios have come up to assist managers track their inventory. One such ratio is Days Inventory Outstanding (DIO). Ending Inventory- $1,000,000.

Patrick Hopkins at Coupa: Coca Cola’s four truths of procurement to pay in action

Supply Chain View from the Field

At the Coupa INSPIRE procurement conference in San Francisco this week, the Chief Procurement Officer of Coca Cola Consolidated, Patrick Hopkins, shared his views on the “4 Truths of Procurement”, and how he has operationalized his views through the deployment of Coupa procure to pay software. When it comes to “procurement truths”, Patrick shared what he believes are critical issues that procurement needs to think about when deploying a procure to pay system.

How Does Procurement Create Value? Insights from CPO Speakers at Zycus Horizons Conference

Supply Chain View from the Field

In addition to the procurement executives, I also got to meet Captain Dick Phillips, the captain of note in the film “Captain Phillips” We had a chance to talk about his experience, and he also presented to the group about the incredible experience he went through. Chris Sawchuck from the Hackett Group interviewed three heads of procurement from three large companies, and asked an important question. Does procurement add to top line revenue.

Manufacturing Gains From Machine Learning

IQMS

Asset Management, Supply Chain Management, and Inventory Management are the hottest areas of artificial intelligence, machine learning and IoT adoption in manufacturing today. Kearney’s recent study of the future of production find that manufacturers are evaluating how combining emerging technologies including IoT, AI, and machine learning can improve asset tracking accuracy, supply chain visibility, and inventory optimization.

Five Steps to Launch a Supplier Scorecard

Logility

3 Get the metrics right. Supplier metrics should be captured about monthly. Building a new supplier scorecard program can have a major impact on the costs and value of your procurement and purchasing functions. Demand Planning Inventory Optimization Supply Planning

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What Supply Chain Data Should I Track in 2020?

Veridian Solutions

With the implementation of API- and web-connected supply chain systems, businesses can manage their inventory and follow up on stock movement more easily and automatically. Metrics and KPIs Supply Chain Supply Chain Data

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Supply Chain Performance Declined In the Last Decade. The Question is Why?

Supply Chain Shaman

Rise in Inventories. Less Effective at Inventory Management. Inventories grew twenty days over the decade. Yes, companies held more inventory (measured in days of inventory) in 2019 than at the start of the 2007 recession. Sadly, most of it is the wrong inventory.

Why Most Supply Chains Need an Upgrade and What to Look for in a Solution

OneSCM

For mid-market companies still using manual supply chains, especially in Procurement/AP operations, now is a fantastic time to consider automating these time-consuming and error-prone practices. For example, a recent Deloitte study , “Charting the course: Why procurement must transform by 2020,” shows that procurement organizations are experiencing a dramatic shift that the study calls “eye-opening.” inventory turns, while the rest achieve only 3.8

eBook 150

Purchase Price Variance (PPV)! A Profit or Loss Opportunity?

Supply Chain Game Changer

Featuring Our 12 Best Procurement Articles! Purchase Price Variance, or PPV, is a common term in the realm of Purchasing/Procurement and Finance. For some, PPV is a mechanical metric only, measured and reported on but without any further attention paid to it. Inventory levels.

eBook 60

Companies Collect Faster, Pay Slower and Hold a lot Less Inventory

Material Handling & Logistics

Top companies now collect from customers over two weeks faster, pay suppliers nearly three weeks slower, and maintain less than half the inventory of typical companies in their industry, according to new working capital research from The Hackett Group Inc. But they continue to rely on financial instruments like cheap debt and supply chain financing rather than do the fairly straightforward tactical work of optimizing payables, receivables, and inventory.”.