A purchasing policy and strategy alone are not enough for the purchasing department to fulfill its mission and deliver the expected results. It is also necessary to measure and manage its performance on a daily basis.
It is therefore necessary to put in place the right monitoring indicators, and to report on these indicators via dashboards.
Choosing the right indicators is a crucial choice and specific to each profession, sector or product.
Once the indicators and dashboard have been validated, the role of the purchasing department will be to communicate the results and to implement the necessary actions to improve them towards the set objectives.
The purpose of purchasing reporting
All companies have a performance obligation and an obligation to measure it with indicators (no game without a score!). These indicators must therefore be aligned to allow for measuring implementation and success.
Indicators allow us to recognize and measure the work accomplished, and help move forward projects that are sometimes complex and lengthy. However, be careful: when used excessively, they can become time-consuming and create too much pressure on immediate results at the expense of a more reasoned, long-term approach.
Scorecard (supplier performance)
The scorecard is a table dedicated to ONE supplier relationship within the SRM program: the number of criteria varies according to the stakes and criticality. It is addressed to internal management and the supplier.
Dashboard (Purchasing department performance)
The dashboard is a summary tool that allows you to track the progress of the service in relation to its objectives in terms of financial aspects, team life, use of tools and processes, supplier performance, etc.
This report is intended for the hierarchical superior, and possibly: internal clients, the functional superior, site management, the purchasing team, and even strategic suppliers.
The dashboard thus integrates all objectives (Group, Site, Clients), with one or two indicators associated with each objective. The objectives are broken down for each family and/or employee.
Purchasing Reporting Plan
Simply implementing dashboards is not enough; it is also essential to ensure their regular use. This requires establishing a process for collecting and validating information, creating a summary for each user, and defining the procedures for periodic communication regarding the dashboard’s content and analysis.
A dashboard is an opportunity to engage in dialogue, implement corrective action, and/or commend based on factual, measurable, and rewarding elements!
Internal Purchasing Satisfaction Questionnaire
Among the best practices for improving the quality of a Purchasing department, internal satisfaction surveys are essential. While this practice is common with external clients, or even sometimes with suppliers, internal Purchasing department clients are rarely considered. Given the central role of the Purchasing department, this best practice should allow you to perform your function even more effectively!