New Procurement KPIs and Thinking: Measuring Impact and Evidence-Based Results
Categories: Procurement Commentary, Procurement Strategy & Planning | Tags: L2, Process and Best Practice
We’ve already spent some time covering Gerard Chick’s thought provoking post in Procurement Leaders. In it, Chick offers up a range of new management considerations and approaches to procurement. His interest in the topic is one we hope will prove contagious to procurement managers and executives on a global basis, as it certainly doesn’t get the full attention it deserves.
Another of Chick’s recommendations centers on management impact and measuring evidence based results. In his words, “Set aside time to carry out analysis based on surveys or focus groups, which capture and display evidence based findings, rather than measuring performance against targets. Measuring the impacts of activities allows for emergence and adjustment.”
This is such a cleverly simple yet complex recommendation, as it can change, at the very core, how procurement focuses its time and how it meets the needs of the business (as it acknowledges that needs can change rather quickly!) Far too many procurement organizations review measurement-based KPIs on a periodic basis (e.g., annually), some of which may involve surveying stakeholders. But the concept of prioritizing marketing-like focus groups and surveys internally, as a course of activity, can change things dramatically.
- Focus groups can lead teams to create entirely new products or tweak something that is “almost” working. Countless CPG products, electronics, and retail concepts have been modified in this manner based on organized structural input.
- According to Chick, the concept of more open surveys and information gathering, as opposed to measuring to strict KPIs, can help enable more frequent “emergence and adjustment.” For example, while today procurement might be overly focused on managing and taking advantage of downward price pressure on commodities, this type of activity might surface emerging demand requirements (not just reflected in production schedules or other planning) in a market where growth is just beginning to ramp— and where capacity is expected to be a challenge.
- Customers and teams always like to know they’re being listened to and heard. Frequent engagement through focus groups and non-KPI-driven surveys is a way of enabling discussion, dialogue, and empathy to the business.
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