Measuring procurement performance - optimal supply chain impact
The procurement performance should be measured because the procurement section plays a vital role in the supply chain in light of the economic contraction. Reducing the cost of raw materials and services can allow companies to compete with the price of their finished goods to win business. The precise measure to success at any purchase section is the amount of money the company can save. However, there are several performance measurements that companies can use, such as: 1- Procurement efficiency 2- Procurement effectiveness 3- Procurement function - Performance measurements4 1- Procurement efficiency Administrative costs are the basis for measuring procurement efficiency. The department is connected to the activities that the procurement section might do in comparison with the budget applied by the department. If costs are within the budget, then the efficiency of the procurement section will exceed expectations. However, if it uses over-budgeted funds, the purchasing function wi...