In today's rapidly evolving business landscape, the procurement function is no longer just about cost savings; it's a strategic lever for driving overall business value. The traditional procurement KPIs, focused on savings and cycle times, are becoming obsolete1. To stay ahead, procurement teams must adopt new metrics that reflect a more strategic, forward-thinking approach1. This evolution involves moving from a focus on simple cost reduction to enhancing profitability, accelerating time to market, and building resilient and sustainable supply chains1.... By embracing these advanced KPIs, procurement can transform itself from a transactional function into a strategic partner1. The future of procurement KPIs centers around several key areas: • Profitability: Instead of just measuring savings, top-performing teams should focus on the percentage improvement in operating margin due to procurement initiatives1. This metric directly links procurement activities to overall business profitability1. • Speed to Market: Rather than just tracking cycle times, the focus should be on how quickly procurement can get materials for new products to market2. This requires a coordinated effort with marketing and sales to meet product launch timelines2. • Data Utilization: Digitization efforts should move beyond simply adopting new tools and instead focus on using data effectively4. Measuring the percentage of data utilized, along with having a library of use cases, is critical4. • Supplier Innovation: Beyond basic metrics like on-time delivery, procurement should focus on fostering cost innovation projects with strategic suppliers and evaluating the percentage of contracts at risk5.... • Working Capital Management: Procurement should focus on negotiating payment terms to achieve negative working capital and reduce reliance on large safety stocks of inventory7. • Risk Management: This area must expand from traditional risk factors to include cyber security and near-shoring efforts, while also addressing troubled suppliers8.... • Sustainability: The focus should be on measuring and reducing scope 3 emissions in the supply chain, moving from spend-based to emission-based approaches3. • Upskilling Teams: Procurement teams need training in spend analysis, negotiation, and increasingly, data science and game theory, enabling them to make data-driven decisions and negotiate effectively10.... This shift represents a move from basic, reactive procurement to strategic, proactive practices that truly impact the bottom line. These new KPIs provide a roadmap for procurement to become a strategic function, contributing directly to the overall success of the organization
Procurement KPIs of 2025! I am bumping this one up as this is the key KPI in 2025! What are the core areas or skills to build the top 1 % Procurement team in 2025? Especially when we are becoming reliant upon data being fed to us or analysis being served to us by AI.I have been quite vocal about how to spot non-performers in Procurement setups, especially in large complex teams. Mediocrity often hides behind Digital Tools and Project Management of Slow Implementation Programs. Layers of Middle management and Project managers don't innovate. I am going to release a case study on this subject soon. So, back to the topic. Why are we not working on Producing more Procurement Data Scientists, Why are we not studying more aspects of Game Theory in Negotiations or even how to drive Category Strategy like a true Product manager? This is the topic Supernegotiate dives into in detail.
There you go! 🎉 A 40-minute masterclass by Supernegotiate on setting up your Procurement KPIs for 2025 (and beyond). In this masterclass, I have discussed two classes of Procurement KPIs. 1: For the traditional teams, who are likely to choose good old classic KPIs 2 (My Favorite): KPIs designed for the Top 1% of Procurement teams, who are willing to make a dent in the Procurement universe and innovate some of the age-old Procurement KPIs. You may not like everything I have shared as KPIs in this video and that's okay! Pick and choose what you like! But, please do me one favor - Dont set your 2025 KPIs without watching this video! It's even better if you watch this with your team tomorrow in your office over coffee and leave some comments!
If you are a young professional starting up your career in Procurement, DO NOT miss this video! We will cover all the procurement basics. This is a 45-minute extract of a 3.5-hour Procurement workshop that Supernegotiate did a couple of months back! Enjoy!
Discount season is here! Expect year-end discounts on what I call "Renewal Rollercoasters." These are your typical contract renewals, which you have been rolling on for years! In this podcast, Supernegotiate has discussed 5 sales tricks/tactics you can watch out for during negotiations, especially during the next 3-4 weeks! Dive right in! AI discussing supernegotiate's content is my new favorite! It is also available on Spotify, Apple podcasts, and Linkedin. Links are in the comments! Follow us on Linkedin: https://www.linkedin.com/in/supernegotiate/ Substack Readers? You would love my content: https://supernegotiate.substack.com/ Get more non-sponsored procurement content on supernegotiate.com!