Procurement KPI Tracker Template

For a procurement team that wants to show its value, tracking key performance indicators (KPIs) with a procurement KPI dashboard is the best way to have quantifiable data at its fingertips. With the right tool, teams can monitor the most essential procurement numbers, compare goals to actuals, and consider year-over-year progress. 

Our free template download gives procurement managers an at-a-glance view of top-level procurement metrics. It’s easy to use and customize to track the metrics that matter most to individual organizations. 

How to use this worksheet:

1. Download the Procurement KPI Tracker using this link.
2. Save the Excel workbook to your local drive and enter current procurement data as outlined in the instructions tab.
3. View the last four (protected) tabs for cumulative data on past year actuals, current year actuals, current year goals, and comparisons.

What are KPIs for procurement?

Procurement management KPIs are metrics used to measure the performance and efficiency of purchasing activities and processes. Teams use these KPIs to monitor progress against goals, set targets for improvement, assess performance compared to similar organizations, maintain high-quality processes, and gain actionable insights on the overall health of the supply chain. 

These procurement KPIs are popular options for tracking progress:

• Total procurement cost
• Total spend
• Monthly cost savings
• Total inventory cost
• Procurement ROI
• Average cycle time
• Delivery time or lead time
• Average supplier count
• Total items purchased
• Item defect rate
• Item quality rating
• Purchase order processing costs
• Cost avoidance
• Cost reduction
• Compliance rate
• Total number of suppliers
• Spend under management
• Expense ratio
• Year-over-year spend change
• Total vendor contracts

How do I track procurement KPIs?

KPI tracking is as simple or complex as your needs require. For smaller organizations looking to demonstrate value and progress in their procurement strategies, a spreadsheet-based tracker may provide sufficient structure and information. 

Follow these steps to get the most out of our procurement KPI dashboard Excel template:

1. Gather all current and historical data on the procurement function. This may be found in various financial, purchasing, accounting, and stakeholder data sets.  
2. Establish goals for the procurement function that align with larger business objectives. For instance, if your organization wants to reduce costs, consider tracking KPIs like monthly cost savings or cost avoidance. 
3. Input KPIs into a tracking system accessible to the relevant procurement team members. This tracking spreadsheet gives you the framework needed to get started and is customizable to suit individual business needs. 
4. Set targets for each KPI. To measure progress, ensure your team sets realistic, achievable goals for the given period.
5. Collect procurement data from supplier reports, internal reports, and vendor performance reviews. Sift through the data to identify anomalies or areas for improvement.
6. Analyze collected data to understand procurement spend and procurement trends and gain insights. Look for opportunities to reduce costs or increase the efficiency of purchasing activities and processes.
7. Create a dashboard with visualized data that allows stakeholders to easily monitor the progress of procurement KPIs compared to goals and provide an overall assessment of procurement health.

Tool

Procurement KPI Tracker Template

Download our free Procurement KPI Tracker Template today to monitor essential procurement numbers and demonstrate value in your procurement strategy.

Download the tool

Benefits of tracking procurement KPIs

Tracking progress toward organizational goals should be foundational for any department. But for the procurement team, it can lead to better outcomes and revenue retention that impacts the entire organization. Procurement teams regularly monitoring their most important KPIs often see numerous benefits. 

Increased visibility: Centralizing data is the first step to successful KPI tracking. Centralization increases visibility into the entire procurement process, while dashboards and reports allow stakeholders to track ongoing KPI progress and gain a real-time view of fluctuations. 

Greater efficiency: When procurement knows what works and what doesn’t, it can focus additional effort and budget on the activities that matter. Tracking reveals where to trim processes or spending, removing inefficiencies and improving optimization. 

Cost-savings opportunities: Visibility into procurement allows teams to research the cost-effectiveness of purchasing activities and reduce costs associated with sourcing goods and services. Teams can use data for spend analysis, enhanced understanding of supplier performance, and better decision-making regarding sourcing. 

Procurement numbers and trends highlight improvements that can lead to procurement savings. For instance, if a team finds delays or disruptions that result in additional expenses, they can adjust their processes or shift toward more reliable suppliers. Ultimately, accurately measuring and tracking the right KPIs helps organizations gain valuable insights into their procurement operations and uncover opportunities for cost savings and more accurate forecasting.

Stronger negotiation: Procurement data visibility helps procurement departments build stronger data narratives that aid negotiations. With access to detailed data regarding the performance of individual vendors, teams can better identify reliable partners that objectively provide the best value for money. This information can be used to discuss new deals with suppliers, allowing procurement teams to secure improved payment terms or discounts. 

Better supplier relationships: Visibility can strengthen relationships with an organization’s most important vendors. Transparency and data-driven dialogues build trust between all parties. Increased transparency also creates a more collaborative long-term relationship where both parties work toward mutually beneficial outcomes. 

Faster cycle times: Clean, up-to-date data and strong vendor relationships improve purchase order cycle times and streamline operations. Strong data helps teams identify viable vendors quickly and begin discussions earlier in the purchasing cycle. Working with existing partners opens up opportunities and incentives that shorten the time required for purchasing. 

Course correction: Regularly tracking KPIs with a procurement KPI dashboard allows managers to monitor the success of their implemented strategies. It shows whether assumptions about procurement experiments are correct and provides data for further refinement and increased profitability. 

Demonstrated value: When the right strategies are in place, procurement becomes a value-creation center for an organization. Using quantifiable data to demonstrate the success of procurement efforts helps teams show their work. Positive data on procurement performance leads to better budget allocation for procurement to continue contributing to a company’s success.

Building a procurement KPI dashboard

Opting to build a procurement KPI dashboard using a specialized dashboarding tool is a strategic decision that harnesses the power of visual analytics. It simplifies complex data, making it accessible and actionable. A procurement KPI dashboard can boost transparency, foster informed decision-making, and drive efficiency in the procurement process.

1. Identify KPIs: Start by selecting the KPIs most relevant to your organization's procurement management objectives. Common KPIs include cost savings, supplier performance, procurement cycle time, and contract compliance.
2. Choose a dashboard software: Select a dashboard software (such as Tableau or DataBox) that integrates well with your existing procurement systems and allows for customization according to your needs. 
3. Gather and integrate data: Ensure you have access to all necessary data sources. This may involve integrating your dashboard software with other tools, such as enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM) platforms.
4. Design the dashboard layout: Organize your dashboard in a way that makes it easy to read and interpret your data. Group related KPIs in sections of the procurement KPI dashboard and decide which ones require real-time updates and which can be updated daily or weekly.
5. Implement visualization tools: While a dashboarding tool offers an easy-to-read digital reference, the information it contains may not translate to usable reports. In many cases, a procurement team will use separate (usually integrated) tools to visualize graphs, charts, and gauges to make the data more accessible. Visual tools help quickly convey the status of KPIs to stakeholders.
6. Train the team: Provide training sessions for all relevant staff members, verifying they understand how to use the dashboard effectively and interpret the data correctly.
7. Update and maintain the dashboard: As business needs change, update your dashboard and relevant KPIs accordingly. Regular maintenance guarantees the dashboard continues to serve its purpose effectively over time.

Use Order.co to simplify tracking procurement KPIs

If your organization is growing in size and complexity, there may be better ways to track benchmark data on procurement than an Excel spreadsheet or a homegrown procurement KPI dashboard. 

Order.co helps teams track the most important procurement data, including supplier quality, cost savings, and procurement metrics for various categories. Even better, Order.co provides features to create a performance tracking report with the most important data points. These features make procurement more efficient, highlight opportunities for improvement, and ensure your KPIs stay on track and relevant.

To see the power of Order.co in helping maintain strong procurement performance, schedule a demo today.