Key Performance Indicators (KPIs) for purchasing and inventory management
· Cost Savings: This measures the reduction in spending as a result of purchasing strategies, such as negotiations or bulk buying.
· Purchase Order Cycle Time: The time taken from initiating a purchase order to the receipt of goods or services, indicating the efficiency of the purchasing process.
· Supplier Performance: Evaluates suppliers based on criteria such as delivery time, quality of goods, and compliance with contracts.
· Spend Under Management: The percentage of total spend that is actively managed by the purchasing team, highlighting the control over organizational expenses.
· Compliance Rate: Indicates the adherence to purchasing policies and procedures, reflecting the governance of the procurement process.
· Inventory Turnover Ratio: This measures how often inventory is sold and replaced over a period, indicating the efficiency of inventory management.
· Stockout Rate: The frequency of items being out of stock, providing insight into inventory planning and demand forecasting accuracy.
· Carrying Cost of Inventory: This includes all costs associated with holding inventory, such as storage, insurance, and depreciation, affecting overall profitability.
· Order Accuracy: Evaluates the percentage of orders fulfilled without errors, crucial for maintaining customer satisfaction and operational efficiency.
· Lead Time: The time required from placing an order to receiving stock, which impacts decision-making and inventory levels.