• Sedat Onat

Key Performance Indicators (KPI)

Updated: Aug 9


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In order to be well planned tomorrow, today and yesterday must be properly and well reported. The KPI (Key Performance Indicators) system is not sufficiently valued by procurement units. The instant situation is reported from the system and it is observed that it is possible to see the current situation, to check it according to it and then to act on it. This system has insufficient and incomplete aspects.


The concentration of high budget buyers is generally based on personal preferences rather than on a system. The inclusion of this (such as the ABC Analysis) in the system will be of great benefit in terms of using time efficiently and focusing on the right suppliers.


Key Performance Indicator Reports are comparable reports that translate information into goals, include targets, approach, and tendency to the target, provide micro-macrostructures to see macro-microstructures, provide performance motivation, inform about what we do not know and/or do not realize.


It enables automatic Key Performance Indicators to be automated as long as they can be reported as needed, not for a long period of time at the end of the term, and provides immediate control (both in terms of computer technology and presentation stability).


Of course, KPIs do not have to cover everything. Simple and effective.


Since KPIs are also projections of the strategy, they should show a common goal with other groups. For example, the purchasing department would like to keep the minimum stock amount excess, but the cost control unit wants the minimum stock amount to be at a minimum to keep the expenses to a minimum. By combining these two goals, it will be of great benefit to establish a KPI system that will reduce the cost of holding stock and at the same time ensure that the goods are at stake.


A simple and understandable KPI system with a targeted, measurable and achievable target from the value will positively affect the procurement unit. For example, the appearance of several designated target displays in the work environment will affect motivation and performance positively.


Sample KPI titles and objectives;

  • Percentage of purchases based on supplier classes (Preferred, approved, etc.)

  • What kind of companies are mostly working with

  • Open order amount per period

  • Seller performance

  • Amount of pending waiting for the period, total periodical receiving rate

  • Increase cash flow contribution

  • The period-based stock amount, total periodical receiving rate,

  • Increase cash flow contribution

  • Order response time

  • Seller response performance

  • Delivered on the agreed date

  • Supplier performance delivery performance

  • Purchase amount per product group

  • Which groups will be given more importance

  • Number of active suppliers per period

  • Overview

  • Minimum stock amount per product group

  • Stoke holding cost performance

  • Number of suppliers evaluated on a periodic basis

  • The attention of the purchasing department to the evaluation

  • Supplier performance trend chart

  • Control of the progress of the scores of the suppliers according to the seasonal curve

  • etc.

May 6, 2016 - Istanbul

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