Understanding how your Procurement and Supply Chain KPIs are performing isn’t just a nice-to-have; it’s essential for survival and growth. Are you truly getting the best value? Are materials arriving when needed? Is inventory bloating your costs? Too often, businesses operate on gut feel rather than hard data.
But what if you could get a clear, birds-eye view of your core performance without investing in complex, expensive software?
Why You Need Visibility of Supply Chain and Procurement KPIs?
Running procurement and supply chain without metrics is like driving blindfolded. A scorecard acts as your dashboard, providing crucial visibility that helps you:
- Make Data-Driven Decisions: Replace guesswork with facts when evaluating suppliers, processes, and inventory levels.
- Identify Bottlenecks & Opportunities: Quickly spot areas that are underperforming and need attention or areas where you’re excelling.
- Improve Efficiency: Understand process timelines and inventory holding to streamline operations.
- Control Costs: Track value beyond just the purchase price and manage inventory effectively.
- Communicate Performance: Easily share a high-level overview of performance with stakeholders or your team.
- Track Progress Over Time: Monitor trends and see if your improvement initiatives are actually working.
Want to know which Supply Chain KPIs you should be tracking? Check out SCMDOJO’s Supply Chain KPIs Dashboard!
Struggling with the true cost of ownership or serving your customers? Our course breaks down TCO/TCS. Start Learning Now
Introducing SCMDOJO’s Procurement and Supply Chain Scorecard
SCMDOJO has developed a Basic Procurement and Supply Chain Scorecard Excel template focusing on five fundamental procurement and supply chain KPIs, giving you a powerful snapshot without overwhelming you with data points:
- Total Cost of Ownership (TCO): Looks beyond the sticker price.
- On-Time Delivery (OTD): Measures reliability for your end customer or next process step.
- On-Time Pick-up (OTP):On Time Pick up (OTP) refers to the percentage of shipments that are picked up by a carrier within the agreed upon time frame.
- Days on Hand (Inventory): Shows how long your inventory sits before being used or sold.
- Vendor Dynamics: Indicates the complexity and potential risks/opportunities in your supplier base.
This template is designed for clarity and ease of use in Excel, making performance tracking accessible to everyone.
Decoding the Metrics: What Are They Telling You?
Let’s break down what each metric in SCMDOJO’s Procurement and Supply Chain scorecard reveals:
- Total Cost of Ownership (TCO): This goes beyond the purchase price to include all associated costs – shipping, implementation, maintenance, training, disposal, etc. A lower TCO indicates better value sourcing, even if the initial purchase price isn’t the absolute lowest. It helps you understand the true cost impact of procurement decisions.
- On-Time Delivery (OTD): This measures the percentage of orders delivered to the intended recipient (whether an external customer or an internal department) by the promised date. High OTD is crucial for customer satisfaction, operational planning, and building trust. It reflects the reliability of your entire supply chain output.
- On-Time Pick-up (OTP): On Time Pick up (OTP) refers to the percentage of shipments that are picked up by a carrier within the agreed upon time frame. This metric is used to measure the efficiency and reliability of carriers in meeting their pickup commitments.
- Days on Hand (Inventory): This calculates the average number of days your inventory sits idle before it’s used or sold. It’s a key indicator of inventory management efficiency and working capital health.
- Vendor Dynamics: Simply tracks the total count of active suppliers you engage with. A very high number might suggest opportunities for consolidation (better leverage, reduced admin). A very low number for critical items might indicate high supply risk. It informs supplier base management strategy and risk assessment.
For deeper learning and insights about Supply Chain KPIs, check out the blog post on Top Supply Chain KPIs
If you’re struggling with tracking the right Procurement KPIs, then the SCMDOJO Procurement KPI Dashboard is just the thing for you!
Make your life simpler and download now!
From Data to Action: Interpreting and Improving using SCMDOJO’s Procurement and Supply Chain Scorecard
Here’s how to assess performance and take corrective action:
- High TCO:
- Assessment: Are hidden costs (logistics, maintenance) driving up the total? Is the initial negotiation focused too much on price alone?
- Action: Renegotiate with suppliers focusing on TCO elements, explore alternative logistics, standardize components, improve preventative maintenance.
- Low On-Time Delivery (OTD):
- Assessment: Where is the delay? Supplier lateness? Logistics issues? Internal warehouse or planning problems?
- Action: Investigate root causes. Improve supplier performance management, change freight partners, optimize warehouse processes, refine demand planning.
- Low On-Time Pick-Up:
- Assessment: Is product not ready on time for scheduled pick-up? Are pick-ups scheduled correctly with carriers? Is the carrier consistently late for pick-ups? Are there dock congestion issues delaying pick-ups?
- Action: Improve internal readiness procedures (warehouse picking, packing), enhance communication/scheduling with carriers, address dock scheduling conflicts, review specific carrier performance and enforce punctuality or switch carriers.
- High Days on Hand:
- Assessment: Is forecasting inaccurate? Are minimum order quantities too high? Is there obsolete stock?
- Action: Improve demand forecasting, negotiate smaller/more frequent orders with suppliers (consider TCO impact), implement regular stock reviews to identify and manage obsolete inventory, explore Just-In-Time (JIT) or lean principles.
- Number of Vendors (Anomalies):
- Assessment: Is the number rapidly increasing/decreasing? Do you have many vendors for the same category? Do you rely on a single source for critical items?
- Action: Conduct a spend analysis to identify consolidation opportunities. Develop strategic partnerships with key vendors. Identify and qualify backup suppliers for critical components to mitigate risk. Implement a vendor rationalization program.
Who Can Benefit from SCMDOJO’s Procurement and Supply Chain Scorecard?
This simple scorecard is versatile:
- Small Business Owners: Get a quick pulse check on critical cost drivers and operational reliability without needing a dedicated analyst.
- Procurement/Supply Chain Managers (in SMEs or specific departments): Track core KPIs, demonstrate value, and identify areas needing process improvement.
- Operations Managers: Understand inventory efficiency and the reliability of material supply for production or service delivery.
- Anyone Starting a Procurement Function: Provides a foundational set of metrics to begin tracking performance immediately.
- Teams Needing Quick Visibility: Use it for monthly reviews or project-specific tracking where a lightweight tool is preferred.
To learn more about Procurement KPIs, check out this video by SCMDOJO
Get Started Today!
Don’t let complexity be a barrier to understanding your performance. This simple 5-metric scorecard, easily managed in Excel, provides invaluable insights to drive smarter decisions in your procurement and supply chain operations.
Ready to gain clarity?
Download your Excel Scorecard Template now!
