Tag Archives: key performance indicators

Costs Increasing? Doing This Will Show Your CPO You’re Still Adding Value

Help turn your CPO’s frown upside down by benchmarking your performance and demonstrating your value. Learn how to here.


Suppose you wanted to own the fastest car in the world. When you were shopping for that car, would you simply ask: How fast does it go? Or would you instead need to ask: How fast does it go in comparison to all other fast cars? That’s the thing about having something the fastest, or indeed, doing something well at all: it isn’t done well if it isn’t done well in comparison to something else. 

The same is absolutely true when it comes to supply chain management. 

At any one time, it’s likely that something in your supply chain will be changing in a less-than-favourable way, and this will irk your CPO. But a great way to show that you’re still adding value is to invest in supply chain benchmarking, which is critical to success and one of the big supply chain and procurement ideas.

So what is supply chain benchmarking, and how can you get started with it? 

What is supply chain benchmarking? 

When you aspire to own something like the fastest car in the world, the metric you use to measure its speed is pretty simple. The car either goes faster than all other cars, or it does not.  

Anyone who has worked in procurement and supply chain, though, knows that things in our profession are unfortunately not always that simple. At any one time, there will be a number of trade offs that make meaningful comparisons more challenging. 

Despite this, supply chain benchmarking – or the act of comparing your performance to various available indices – can help establish that even if things might not look so rosy in your category or area, they actually are. Benchmarking also has other important benefits, including helping you and your team identify gaps, innovate, and focus on continual improvement. 

One commonly used index that may help you compare your performance against others is the SCOR method (of which benchmarking is just one part). You can use the SCOR approach to assess your business based on three pillars: process modelling, performance measurement, and best practice. 

How can you get started with supply chain benchmarking? 

Benchmarking can sound daunting, and there is no doubt that it can be a little time-consuming, but the benefits are certainly worth it. In order to get started with benchmarking, experts recommend: 

  1. Start with internal benchmarking: Sometimes, excellence can be sitting right in front of you. For that reason, especially if you work in a large organisation, it’s important to start your benchmarking internally. What are other business units doing better, both locally and globally, and how can you imitate their successes? 
  2. Review available indices: There are many available indices against which you can measure your performance, and it’s important that you choose one that makes sense for your organisation. For example, Gartner offers many different indices, as does Benchmarking Success. You can also use the methodologies detailed in the Supply Chain Index.
  3. Analyse your findings: No one knows your business like you do. So after you’ve finished your benchmarking, ensure you analyse your findings. Pay attention to lessons learned, but also take the time to understand why it might not be possible to be the best of the best in every metric for your particular business. 

But should you track all of your spend when measuring against indexes? Anklesaria Group recommends you should only track a certain amount. Discover what that amount is, and many other game-changing ideas, in our compelling whitepaper 100 Big Ideas for 2021.

Career Myths That Will Sabotage Your Success

Are you heeding good career advice to continue your upward trajectory, or worn-out myths that will grind your career to a halt? Here are the most common myths that may prove a hindrance.


When it comes to career advice, some of the most successful people say you can never get enough of it. But what about if the advice you’re given is not quite right? Or worse, what about if it actually sabotages your career? A lot has changed in the world of work, but sometimes the career advice of yesteryear just doesn’t change with the times. Here are the most common career success myths, and how they might actually be sabotaging your success:  

Myth 1: Long hours is the only way to the top 

We’ve all heard the old adage before: the quickest way to the top is to arrive before your boss, and leave after her. Employers want face time warriors, we’re told. The best employees are always working, always available, and always on. 

Except, they’re not. 

This year especially, the notion of facetime, all the time, has been strongly refuted. Startlingly, one study found that managers actually couldn’t distinguish between those who worked 80 hours a week, and those who pretended to. Working long hours is also terrible for your career for a number of other reasons: it causes health problems, increases the chances you’ll get burnt out and makes decisions and communication much more difficult. 

So it’s fair to say that long hours will not lead you to the top, but it may lead you out the door. 

Myth 2: Dress for success 

The notion of ‘dress for the job you want, not the job you have’ seems to have been passed down the generations, and still echoes around many offices today. But will this get you the promotion you’ve got your eye on? 

Most likely, no. And there’s two reasons why. 

Firstly, one of the keys to success in business is cultural fit. If you work in a casual workplace but adopt an aspirational power suit, it’s likely that others may not perceive you as positively as they should. 

Secondly, the very best workplaces know to value someone’s performance over superficial considerations such as how they dress or look. So as much as it’s important to make an effort, trying to be the best dressed in your office is simply not that important.  

Myth 3: You should leave if you get a bad performance review 

For anyone who has ever received a bad performance review (which at some point, is most of us!), it can be a soul-crushing and highly embarrassing feeling. So awful is it that most of us will believe that there’s no coming back, and that we should immediately update our resumes and start hitting the job market. But should we? 

Companies are increasingly waking up to the fact that annual performance appraisals aren’t as effective as many originally thought they were. In fact, BBC Worklife goes as far as to say that they are pointless for most people. Increasingly, businesses are realising that they are not the be all and end all of performance, and looking at other factors instead. 

That being said, a bad performance review can still hurt. But instead of rage quitting, try to focus on what you can do to improve. Steering yourself out of a bad situation can show your boss that you’re in possession of the most important quality any employee could have: resilience.

Myth 4: Your IQ is more important than your EQ 

Are you one of those people who rolls their eyes at all of our peers because you know you’re just so much smarter than all of them? At school, it’s the most intelligent people who succeed, but in work, it can be a different matter entirely.

In the workplace, a high IQ can mean that you’ll succeed at certain jobs and be valued for your skills. But if your IQ Is high but your EQ is lacking, you’ll likely be sidelined to roles as an individual contributor, as leadership and management require a healthy dose of EQ.

Your EQ, far more than your IQ, will determine whether or not you’re promoted, and will help immensely throughout your career, assisting you to build relationships and influence others.

When it comes to career advice, not every piece of advice is created equal. Don’t let these career myths stand in the way of your success.

Are there any other career myths that you’ve felt have held you back? Let us know in the comments below. 

Is Now The Right Time To Ask For A Pay Rise?

Should you ask for a raise during a pandemic? It depends on how well you perform, and how your company is doing.


You consistently deliver, you always exceed your targets, and your boss is thrilled. 

Does that mean now the right time to ask for a raise – despite everything going on in the world? 

Actually, now could be the perfect time. 

It might seem counterintuitive, but economic downturns often mean steady wages, says Dr Michael Gravier, Professor of Marketing and Global Supply Chain Management at Bryant University.

“Layoffs and workforce reductions are done partly to preserve the salaries of remaining workers, and companies know that they must keep up the morale of remaining workers,” Professor Gravier says. 

Since recessions don’t last forever, businesses have an incentive to make sure their best employees stick around to ride out the economic storm.

“Companies that are most well prepared tend to come out of economic downturns stronger than competitors,” adds Gravier. 

“This means that workers who haven’t been furloughed are, on average, well-positioned to request reasonable pay raises, especially if they’ve shown a talent for doing more with less or improving operations or succeeding despite the odds during these difficult times.”

Where to start

Are you a high performer? Then it sounds like you’re ideally placed to ask for a raise.

Start by understanding how well your company is doing, and its priorities for the next several months.

And don’t be put off by reports that overall wage growth is weaker now. Professor Gravier points out that supply chain industry wages have remained fairly robust. 

Bottom line: go get that raise.

Build your case

Start by assembling proof that you deserve a raise. Remember, the topic of your paycheck might be deeply personal and sensitive to you, but it isn’t to your boss. All they want are hard facts that prove you meet and exceed expectations.

For that reason, it’s smart to get in the habit of jotting down this evidence regularly. For example, Professor Gravier set aside time every Friday to write about what had happened during the week, and how key performance metrics were going. 

‘“You must first know thyself,” as the old saying goes,” Gravier says. “If workers cannot justify their performance, clearly there is not much need to entertain their request [for a raise].”

So what sort of accomplishments should you record? Anything that proves how valuable you are, says Scott Dance, Director of Hays Procurement & Supply Chain.

“[W]rite down all the things that you’ve achieved individually or contributed to significantly as part of a team, [and] back up these achievements with real, measurable evidence,” Dance says.

“Your fundamental objective is to prove that you’re an asset to the business and that you have made a significant contribution during what has been a particularly challenging time for many organisations.”

Know your market value

The next piece of evidence you need is your market value, says Jacqui Paterson, Director of Supply Chain and Procurement at UK recruitment agency Drummond Bridge.

“I would advise [employees] to look at all of the factors associated with their current role, [like] ease of location, job satisfaction, working conditions and then research what the current market rate would equate to for the role they deliver,” Paterson says.

A good way to benchmark your salary is using a guide, like the one recently published by the Chartered Institute of Procurement and Supply. That way, you can see averages for your experience level and geographical region.

Paterson also recommends asking yourself questions like:

  • How long ago was my last pay rise given?
  • Can my company accommodate a rise right now? 
  • Are my skills in high demand?

It’s all about doing your homework first so you’re prepared, professional, and ready to make a strong case.

Choose your timing

People often ask for a raise during a performance review. But that’s a mistake because many other employees are asking for a raise then too, Paterson says.

When is a better time, then? Paterson advises to “time the conversation strategically – perhaps after a series of successful, valuable contributions have been delivered.”

And don’t forget to approach your discussion diplomatically. “A confrontational or “expectant” pay rise conversation doesn’t usually end positively,” Paterson warns.

What if they say no?

Even if you make a convincing case, you might still get rejected. 

What should you do next? Find out why you were turned down, says Paterson. “No to a pay rise just now does not mean never.”

“If the [employee] is generally happy where they are, this can be the trigger to initiate conversations in writing that if certain savings, KPIs etc are met that the raise will be reviewed after a three-month period.” 

After all, “[n]ot all businesses can afford to consider a salary rise in the current market conditions, or they may want to review how business is moving when the economy shows signs of improving before committing to any salary rises,” Paterson adds.

Another possibility is your boss can’t give you a raise, but they can sweeten the deal by giving you other benefits. 

These could include a job title change, extra time off, or the ability to work from home permanently.

So before your conversation, you should consider if you’ll only accept more money, or if you could be satisfied with recognition in other ways.

Is it time to leave?

Only you can decide if you’re happy sticking around without a pay raise. If your top priority is a bigger salary, leaving may be your only route.

“If your current employer can’t meet your requirements in terms of salary or otherwise, it’s certainly worth testing the waters and seeing what you could be getting elsewhere,” says Scott Dance from Hays.

“Despite ongoing uncertainty, there’s no reason why you should hold off looking to the future and considering how you can make your professional ambitions a reality.” 

Dance advises updating your CV/ resume with any new skills or expertise you might have learned over the last few months of lockdown.

“Refreshing your CV might open up new avenues which you thought weren’t possible before,” Dance says. That’s why you should be open to trying something new.

“The long-term reality of the Covid-19 crisis may mean that we see surges in demand, industry shifts and emerging trends that impact the jobs market,” Dance adds.

“Being flexible and open-minded about your career may help you secure that pay rise you’re after and take your career in an exciting new direction.”

Do you have any tried-and-true advice? Share your thoughts in the comments below.

2016 Rewind – Procurement KPIs – Measuring the Unmeasurable

Our final rewind article for 2016 is on one of the hot topics of the year – procurement KPIs. More specifically, how do you go about measuring the unmeasurable? 

Is it time to develop new procurement KPIs? As the profession delivers more value, we need to consider measuring the ‘unmeasurable’.

How on earth do you put a KPI against innovation in procurement? How about risk management? Or talent? It’s time for the profession to come together and quantify the value we deliver beyond cost savings.

For me, a revelation that came out of the discussion at The Beyond Group’s “Productivity in Pharma” (PiP) Think Tank in Basel last month, was that there is an urgent need to create procurement KPIs that fully reflect the broader value our profession delivers.

Unfortunately, we will never escape the requirement to track savings (and nor should we; we’re good at it!), but it’s time to define the value-addition areas of what we deliver – productivity, innovation and risk management – in hard dollar terms so that we can quantify our value delivery in these areas.

In my previous post, I shared five rules of thumb for good procurement KPIs. To recap, each KPI should be:

  • clearly linked to an overall business objective,
  • uncomplicated and measurable in hard-dollar terms,
  • based on outcomes, not inputs,
  • not too long nor too many (five to six KPIs at a maximum),
  • achievable and inspirational.

Taking these rules as a starting point, let’s look at five value-addition areas that every procurement professional should be measured against:

  1. Productivity

I know there are a lot of CPOs out there who are tired of the old ‘cost savings’ metric.  And I understand it. But the reality is that cost savings is at least ONE thing that clearly defines our contribution. If we walk away from this, then we have lost an important anchor.

However, we do need to ensure that the broader business audience understands procurement is about so much more than savings, and that we can clearly define value in other areas as well.

One important point I would make (an opinion also shared by ISM CEO Tom Derry at the Procurious Big Ideas Summit) is around cost avoidance. Don’t insult yourself, or your CFO, by reporting on this metric. Costs that have been avoided simply don’t count.

  1. Efficiency

There are so many ways CPOs can deliver efficiency gains that result in bottom-line value for their organisations. In the pharmaceutical world, I imagine this would be measured in terms of speed to market (or “speed to patient”, as one clever pharma Procurement Head put it), faster clinical trials or even the good old basics like reducing inventory.

There are so many ways that procurement can free up cash in the business, but the hard dollar value of this needs to be quantified – which is not impossible.

Business cases are always based on the time value of money. Net Present Value (NPV) is a fundamental financial measurement for businesses. So, before you embark on one of these efficiency projects, work with your finance team to agree on a calculation for the hard dollar value of the efficiency gain, then deliver it, and stick to the agreed value!

  1. Innovation

Procurement rock-star and former CPO of Deutsche Telecom, Eva Wimmers, talked last year about incentivising procurement-driven innovation by creating a suite of relevant KPIs, including cost and time savings achieved as a direct result of innovative improvements.

Innovation KPIs can be process-centric, behavioural or customer-focused (such as service and net promoter scores). What’s important is that every KPI is measurable in its own right and clearly connected to overall corporate objectives. 

  1. Risk management

This is a powerful measurement that will capture the attention of your CEO and other executives. You see, the challenge with risk management (like safety) is that the ultimate success is when nothing goes wrong!

Procurement and other parts of the organisation can spend a lot of time and energy securing supply relationships and carefully managing contingencies, which result in absolutely nothing happening (which is a good thing!). At the C-level it is, therefore, quite easy to take risk management for granted and be tempted to reduce funding and resources in this area.

Actually, safety is a very powerful metaphor for the role procurement plays in managing risk. Nothing captures an executive’s interest more than safety. The language and methodology of safety measurement is well known to executives, most of whom are rewarded on safety metrics.

So, rather than re-invent the wheel with a whole new set of measurements around risk, simply reframe risk in a safety context.  Work with your safety department to understand their metrics, explain what you are measuring and get their advice on how they would construct metrics for risk management in procurement.

When ‘selling in’ your risk management KPI to senior management, don’t underestimate the power of good storytelling. It is critical to illustrate your business case with rich examples of how much market share and stock market value has been lost by competitors and peers when supply chain risk is not properly managed.

Disaster Protection

Traditionally, we have valued this in terms of potential legal costs, but today it is so much more than that. Social media now ensures that your end customers (and the press) quickly become aware of supply chain issues, and these are amplified to such a point that they result in loss of market share and ultimately share price value.

Supply chain disruptions can have catastrophic impacts on corporate brand and equity value. Procurement, however, can play a huge part in protecting the company from this type of disaster, and I believe this is one of the most valuable roles we can play today. Risk management must therefore be highlighted and reported upon in our procurement KPIs.

As you will see at the close of this story, my bold recommended KPI for risk management is number of days supply chain disruption reported in media (with the objective of keeping this at zero!).

As a side point, research in the US has shown that companies who have invested in appropriate social procurement (projects that aligned and complement your brand) will bounce back faster after a market ‘shock’ event.

  1. People

Call people what you will – ‘assets’, ‘human capital’, or even ‘resources’ – but I prefer to use the word ‘talent’. People are frequently regarded as an enabler metric, but I think it should be much more than that.

We should position procurement as a source of leadership talent for the business. Particularly if we believe what we say (and I do!) that procurement provides some of the best commercial training of any function.

Procurement offers its team members the opportunity to work across the business internally, as well as externally. So let’s put our money (and our KPIs) where our mouth is! Develop a metric that measures procurement’s contribution to developing leadership talent. Once again, this is something to which senior leadership is very committed in the best organisations. 

So, to be provocative – here are six procurement KPIs that I would put forward as a CPO today:

  1. Cost savings – $ saved in financial year
  2. Productivity – $ released through working capital initiatives
  3. Innovation – Projected $ value delivered through procurement-negotiated supplier-led innovation.
  4. Risk management: Number of days supply chain disruption reported in media.
  5. Talent: Number of employees who have worked in procurement and are now on the enterprise leadership development program.

Procurement KPIs are a hot topic for everyone, and I’m sure you won’t agree with all my points. So…what are your thoughts?

Has Procurement Got Its KPIs Right?

As the Procurement function evolves, its KPIs remain old-fashioned. Bertrand Maltaverne explores the surprising results of a Procurement KPI survey.

In a rather interesting coincidence, just as ProcureCon Europe was releasing a benchmarking paper called Procurement Challenges, we released a white paper that also focuses on one of the most fascinating challenges in the industry: The Direct Material Procurement Challenge.

More than a coincidence, this is a sign of the times as the role of Procurement and its position in organisations rapidly becomes quite a recurring hot topic.

Before going into the specifics of ProcureCon’s report, the challenges that Procurement faces stem almost entirely from the transformation Procurement  is going through as a function.

Value vs. Cost reductions

“As businesses emerge from the recent recession into a fragmented supplier ecosystem, a normal approach to creating value through cost saving alone is no longer relevant.”

ProcureCon’s report is not the only one to highlight the current gap between a value-­based Procurement approach and the actual KPIs that most organisations track, specifically:

  • 91 per cent of surveyed organisations have cost savings as a KPI;
  • 76 per cent have cost avoidance as a KPI.

KPIs for value metrics like quality, risk, and cycle times languish respectively in 5th, 8th, and 12th place! Fewer than 50 per cent of companies track these measures.

More troubling: only 30 per cent track Procurement ROI as a KPI. ROI (Return On Investment) or VFM (Value For Money) is actually the main KPI that all organisations should aim for as it synthesises the ratio between value generated and energy or resources employed. Or, in other words, a measure of the effectiveness and efficiency of a Procurement organisation.

Supplier Management Core Procurement Activity

Among the many interesting insights in the report, there are two aspects related to supplier management and stakeholder management that are kind of interesting. They both relate to the qualification of suppliers and are quite revealing.

Procurement still operates too much in a silo

“Procurement typically take the lead when it comes to the qualification of contractors and suppliers during the bid process.”

Decisions regarding sourcing have to be cross-­functional. Not only to ensure that all aspects have been looked at but mostly to ensure adoption of the decisions. Involving other departments in the decision-­making process is critical.

Even better, involving them in the early stage of defining a category’s strategy is vital to define the value that they expect suppliers to deliver. This may not be low prices alone.

Procurement still sees suppliers as trading partners, not business partners

There are also a couple of surprises when it comes to the dimensions Procurement looks at when assessing new potential suppliers. We assume this also reflects the KPIs tracked afterward.

Not surprisingly, financial stability comes first. As a former purchaser, I can say this fits with the practices I have seen on the field. This is not without inherent risk: “conducting a single financial stability check (e.g. D&B check) before engaging a supplier could provide a false sense of assurance.”

More surprisingly, CSR-­related themes like sustainability and safety stand squarely in the middle of the list. Around 50-60 per cent of respondents say they include these factors in their assessments. A notable exception is diversity, which comes last on the list with only 20 per cent of respondents taking this into account.

Issue of Supplier Innovation

But, very surprisingly, competent advice is a criterion that is at the bottom of the list, covered by only 29 per cent of respondents. This is especially surprising considering the focus on the role of Procurement in organisations, and its impact on innovation. The lack of attention on this area is rather troubling.

As we understand it, if organisations do not measure if suppliers could be a source of new ideas and suggestions, it means that they do not expect suppliers to be able to participate in their innovation process. This quite a self­-centred view of innovation!

In conclusion, there seems to be a consensus within the Procurement community that Procurement is not in the place it deserves to be, and that, in the future, its importance will grow. For example, ProcureCon’s report says that 62 per cent of respondents to their survey estimate that Procurement will move towards making board-level decisions in the next 3 years.

But, as far as their report and many others show, there is still a gap in capabilities and delivery that needs to be bridged before we get there.

Now is the time for Procurement to evolve!

Procurement KPIs – Measuring the Unmeasurable

Is it time to develop new procurement KPIs? As the profession delivers more value, we need to consider measuring the ‘unmeasurable’.

Neirfy/Shutterstock.com

How on earth do you put a KPI against innovation in procurement? How about risk management? Or talent? It’s time for the profession to come together and quantify the value we deliver beyond cost savings.

For me, a revelation that came out of the discussion at The Beyond Group’s “Productivity in Pharma” (PiP) Think Tank in Basel last month, was that there is an urgent need to create procurement KPIs that fully reflect the broader value our profession delivers.

Unfortunately, we will never escape the requirement to track savings (and nor should we; we’re good at it!), but it’s time to define the value-addition areas of what we deliver – productivity, innovation and risk management – in hard dollar terms so that we can quantify our value delivery in these areas.

In my previous post, I shared five rules of thumb for good procurement KPIs. To recap, each KPI should be:

  • clearly linked to an overall business objective,
  • uncomplicated and measurable in hard-dollar terms,
  • based on outcomes, not inputs,
  • not too long nor too many (five to six KPIs at a maximum),
  • achievable and inspirational.

Taking these rules as a starting point, let’s look at five value-addition areas that every procurement professional should be measured against:

  1. Productivity

I know there are a lot of CPOs out there who are tired of the old ‘cost savings’ metric.  And I understand it. But the reality is that cost savings is at least ONE thing that clearly defines our contribution. If we walk away from this, then we have lost an important anchor.

However, we do need to ensure that the broader business audience understands procurement is about so much more than savings, and that we can clearly define value in other areas as well.

One important point I would make (an opinion also shared by ISM CEO Tom Derry at the Procurious Big Ideas Summit) is around cost avoidance. Don’t insult yourself, or your CFO, by reporting on this metric. Costs that have been avoided simply don’t count.

  1. Efficiency

There are so many ways CPOs can deliver efficiency gains that result in bottom-line value for their organisations. In the pharmaceutical world, I imagine this would be measured in terms of speed to market (or “speed to patient”, as one clever pharma Procurement Head put it), faster clinical trials or even the good old basics like reducing inventory.

There are so many ways that procurement can free up cash in the business, but the hard dollar value of this needs to be quantified – which is not impossible.

Business cases are always based on the time value of money. Net Present Value (NPV) is a fundamental financial measurement for businesses. So, before you embark on one of these efficiency projects, work with your finance team to agree on a calculation for the hard dollar value of the efficiency gain, then deliver it, and stick to the agreed value!

  1. Innovation

Procurement rock-star and former CPO of Deutsche Telecom, Eva Wimmers, talked last year about incentivising procurement-driven innovation by creating a suite of relevant KPIs, including cost and time savings achieved as a direct result of innovative improvements.

Innovation KPIs can be process-centric, behavioural or customer-focused (such as service and net promoter scores). What’s important is that every KPI is measurable in its own right and clearly connected to overall corporate objectives. 

  1. Risk management

This is a powerful measurement that will capture the attention of your CEO and other executives. You see, the challenge with risk management (like safety) is that the ultimate success is when nothing goes wrong!

Procurement and other parts of the organisation can spend a lot of time and energy securing supply relationships and carefully managing contingencies, which result in absolutely nothing happening (which is a good thing!). At the C-level it is, therefore, quite easy to take risk management for granted and be tempted to reduce funding and resources in this area.

Actually, safety is a very powerful metaphor for the role procurement plays in managing risk. Nothing captures an executive’s interest more than safety. The language and methodology of safety measurement is well known to executives, most of whom are rewarded on safety metrics.

So, rather than re-invent the wheel with a whole new set of measurements around risk, simply reframe risk in a safety context.  Work with your safety department to understand their metrics, explain what you are measuring and get their advice on how they would construct metrics for risk management in procurement.

When ‘selling in’ your risk management KPI to senior management, don’t underestimate the power of good storytelling. It is critical to illustrate your business case with rich examples of how much market share and stock market value has been lost by competitors and peers when supply chain risk is not properly managed.

Traditionally, we have valued this in terms of potential legal costs, but today it is so much more than that. Social media now ensures that your end customers (and the press) quickly become aware of supply chain issues, and these are amplified to such a point that they result in loss of market share and ultimately share price value.

Supply chain disruptions can have catastrophic impacts on corporate brand and equity value. Procurement, however, can play a huge part in protecting the company from this type of disaster, and I believe this is one of the most valuable roles we can play today. Risk management must therefore be highlighted and reported upon in our procurement KPIs.

As you will see at the close of this story, my bold recommended KPI for risk management is number of days supply chain disruption reported in media (with the objective of keeping this at zero!).

As a side point, research in the US has shown that companies who have invested in appropriate social procurement (projects that aligned and complement your brand) will bounce back faster after a market ‘shock’ event.

  1. People

Call people what you will – ‘assets’, ‘human capital’, or even ‘resources’ – but I prefer to use the word ‘talent’. People are frequently regarded as an enabler metric, but I think it should be much more than that.

We should position procurement as a source of leadership talent for the business, particularly if we believe what we say (and I do!) that procurement provides some of the best commercial training of any function.

Procurement offers its team members the opportunity to work across the business internally, as well as externally – so let’s put our money (and our KPIs) where our mouth is! Develop a metric that measures procurement’s contribution to developing leadership talent. Once again, this is something to which senior leadership is very committed in the best organisations. 

So, to be provocative – here are six procurement KPIs that I would put forward as a CPO today:

  1. Cost savings – $ saved in financial year
  2. Productivity – $ released through working capital initiatives
  3. Innovation – Projected $ value delivered through procurement-negotiated supplier-led innovation.
  4. Risk management: Number of days supply chain disruption reported in media.
  5. Talent: Number of employees who have worked in procurement and are now on the enterprise leadership development program.

Procurement KPIs are a hot topic for everyone, and I’m sure you won’t agree with all my points. So…what are your thoughts?

The Productivity in Pharma Think Tank brings together a conclave of senior procurement leaders from the Pharmaceutical industry, creating a unique, mini-MBA style environment, where the most pressing issues facing the function are explored in detail and, from which, key insights and applicable takeaways are derived.

You can find out more about this event at The Beyond Group website, and connect with the event hosts and facilitators Giles Breault (@GilesBreault) and Sammy Rashed (@RashedSammy) on social media.