I hope that you have enjoyed the article “Purchasing Managers’ Worst KPI Mistakes.”
This article was inspired by a discussion I read on the Strategic Sourcing & Procurement Group on LinkedIn. That discussion was started by a procurement manager who wanted to know what key performance indicators that others used.
What followed was an absolute barrage of examples of KPI’s. Some were good. Some were…well, let’s just say that they showed that the individual was stuck in a tactical mindset.
One of the main points of the “worst mistakes” article was that not every performance indicator is a key performance indicator. When a senior executive wants to learn what the procurement team considers to be a key performance indicator and the procurement leader replies with performance indicators that are like some of the worst from the LinkedIn discussion, it becomes immediately evident that the procurement department is stuck in tactical mode.
When the word “key” (or the letter “K”) is used to discuss performance indicators, what the senior executive is looking for is integration – some type of connection between what the procurement department is doing and what the organization as a whole is trying to accomplish.
Providing a mere performance indicator when asked for a key performance indicator is a tip-off that the mindset in procurement is too tactical. So, remember, make sure your KPI’s are truly “key” performance indicators by demonstrating the integration with the focus of the organization.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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