In order for procurement to be successful, the relationship between the buyer and supplier must remain entirely transparent. Without prioritizing open communication, orders may arrive late or be completely missed. A procurement scorecard is something that can make life much easier in these situations by monitoring all aspects of the buyer/supplier relationship.
Previous Processes Have Become Obsolete
The procurement practices of the last few years have become outdated. The mounting pressure from the recent supply chain crisis has only exasperated that fact. Procurement scorecards need to finally evolve beyond their singular focus of cost savings. There is much more that can be managed by using a procurement scorecard. In order to optimize performance, procurement organizations need to keep focus on other KPIs such as cost avoidance, client satisfaction, and supplier diversity.
Procurement organizations need to diversify their approach for optimization. In order to do so, they must move beyond strictly financial metrics. They can obtain a more thorough and balanced view of their overall performance by also including non-financial performance measures on their scorecard. Operational statistics and other factors are just as important for long-term success. Even though they don’t always have a cost number attached directly to them, if left unchecked, these things could negatively affect procurement performance in a variety of ways. If client satisfaction isn’t a priority, customers will be lost. Additionally, supplier diversity will bring about long-term savings and flexibility.
Visibility & Automation
In order to ensure a complete scorecard, procurement organizations must prioritize automation, and integrate solutions in order to gain a clear view of the objectives they wish to keep tabs on. By establishing benchmarks, each metric can be more clearly defined and tracked. From there, they can better determine which metrics need to be prioritized.