Documente Academic
Documente Profesional
Documente Cultură
Metrics
Lecture #2
09 February, 2014
Primary Outcome
Categories
Cost
Quality
Supplier
Satisfaction
Implementation of new initiatives
Special interest issues
Outcome Objectives
Corporate
Objective
s
Purchasin
g
Objective
s
Commodi
ty group
A
Commodi
ty group
B
Commodi
ty group
C
6
Cost Metrics
Expenditures
have increased
Prices
paid
Total ownership costs
Varies across firms; but clearly
oriented towards cost
reductions/savings
Cost Metrics
Cost Metrics
Description
Return on Investment
Market Cost
Index Change
Firm Cost
Change
Metric
Savings
Service A
%5+
+3%
+2%
Service B
-5%
-8%
+3%
10
Implementation
Considerations
Based
on comparison of costs
Across time
Divisions
Regions
For
periodic or one-time
purchases, data are often
insufficient
11
Quality Metrics
Goods
purchases
services
Customer Satisfaction
12
13
Description
Customer satisfaction
ratings
Service reliability
14
Implementation
Considerations
Data
Sample Size
Quality of sample
Question wording
Response format
Timing of survey
15
Supplier Satisfaction
Metrics
Ensure
16
17
Supplier Satisfaction
Metrics
Supplier
Satisfaction Metrics
Description
Supplier satisfaction
ratings
Complaints
Supplier-initiated concerns
18
Implementation
Considerations
Data
In-house surveys
Third-party surveys ensuring
confidentiality
Surveys
can be costly
Time-consuming for both buyer and
supplier
To save time & cost, conduct
supplier surveys only annually or
biennially
19
to improve outcomes of
purchased products/services
Creating a supply base that is the right
size and composition Supply base
rationalization
Process
metric
metric
21
Initiative Metrics
Example
Initiative
Potential Process
Metric
Potential Outcome
Metric
Supplier
base
rationalizatio
n
Savings
Responsiveness
Customer Satisfaction
Supplier
Developmen
t
Number of people
involved
Savings
Number of projects
Improved performance
Personnel
Developmen
t
22
Implementation
Considerations
Developing
initiatives,
implementing plans, goals and
their associated metrics is a
challenging, time consuming
process.
23
24
25
Description
Support of small or
minority-owned
businesses
26
WHAT ELSE?
27
Internal Management
Metrics
Monitor
28
Internal Customer
Satisfaction
Firms
29
30
Internal Management
Metrics
Internal
Management
Metrics
Description
Internal Customer
Satisfaction
Ethics violations
31
Implementation
Considerations
Special
32
Ethics Violations
Firms
34
35
thanK yoU
36