Procurement 
Excellence for Top 1%

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

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 obsolete. To stay ahead, procurement teams must adopt new metrics that reflect a more strategic, forward-thinking approach. This evolution involves moving from a focus on simple cost reduction to enhancing profitability, accelerating time to market, and building resilient and sustainable supply chains. By embracing these advanced KPIs, procurement can transform itself from a transactional function into a strategic partner. 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 initiatives. This metric directly links procurement activities to overall business profitability. • Speed to Market: Rather than just tracking cycle times, the focus should be on how quickly procurement can get materials for new products to market. This requires a coordinated effort with marketing and sales to meet product launch timelines. • Data Utilization: Digitization efforts should move beyond simply adopting new tools and instead focus on using data effectively. Measuring the percentage of data utilized, along with having a library of use cases, is critical. • 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 risk. • Working Capital Management: Procurement should focus on negotiating payment terms to achieve negative working capital and reduce reliance on large safety stocks of inventory. • Risk Management: This area must expand from traditional risk factors to include cyber security and near-shoring efforts, while also addressing troubled suppliers. • Sustainability: The focus should be on measuring and reducing scope 3 emissions in the supply chain, moving from spend-based to emission-based approaches. • 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 effectively. 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. (http://soon.So) So (http://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 (https://www.linkedin.com/company/supernegotiate/) dives into in detail.

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. Follow me on LinkedIn : https://www.linkedin.com/in/supernegotiate/ and on Substack: https://supernegotiate.substack.com/

KPI 08 for Top 1% Team. I love this one. A fresh approach on Risk Management in Procurement and Supply Chain. Supernegotiate shares some tips on how to make Risk management into an actionable KPI. Most of the time Risk management KPI in Procurement is restricted to macro economic events and geopolitics! But, how to model these? Can't we change this into something more actionable? Dive in for some ideas!

Please do better in the Supply Chain! Old KPIs that are basic and don't address complex macroeconomic scenarios. These are: 1.) Working Capital Optimization 2.) Inventory Optimization Good for cost saving! Yes, but they don't provide a clear action plan on addressing issues such as semiconductor shortages, Suez canal blockage, port issues etc! An inefficient (and inaccurate) response to such a situation has been to place purchase orders in advance. Placing Purchase orders in advance in anticipation of future events is an expensive gamble. Nobody should do it. Let's learn from Nike over-inventory issue! Supernegotiate recommends changing the approach to Working Capital and Inventory Optimization KPI. Introducing Negative Working Capital (like Amazon) and Nearshoring % shipments KPI Redefine your KPIs, please! Let me know your thoughts!