8 KPI’s to evaluate your Supplier Relationship Management

There are many ways to evaluate the quality and extend of your SRM processes, depending on your objectives and specific environment. On the other hand, it is not so much the value of an indicator which is important but its variation. Here are my preferred high-level KPIs that I consider anyone should monitor to rate quickly an SRM overall performance:

  1. Have you defined Sourcing Groups and do you know the global spend for each SG (spend analysis)?
  2. Have you categorized your spend (Leverage, Strategic, Bottleneck, Standard)?
  3. Have you identified your strategic suppliers and do you collaborate with them to improve both performance?
  4. Have you identified your bottleneck suppliers and have you a contingency plan in case of failure?
  5. What is the percentage of your total spend do you have a clear strategy defined and in place for?
  6. What percentage represents your total acquisition costs (TAC) compared to total revenus?
  7. What percent of contract terms (contract value based) are being met (feedback from sales/ops)?
  8. What percent of your purchasing spend is not meeting your customer expectation (feedback from sales/ops)?

Of course, you can disagree with that … and feel more comfortable with the top 10 used procurement KPIs according to Aberdeen. Your call.

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