Frame Objectives to reflect the audacious goals
- Procurement Objectives are challenging goals that inspire the team to achieve solid progress within desired period, typically a quarter
- Objectives are qualitative directional statements - Eg. Finding of savings potentials via modern methods of spend management
- Procurement Objectives typically include activities like - Market Research, Vendor Evaluation and Contracts Negotiation and also Purchasing
Set Key Results with relevant KPIs adroitly
- Key Results are the means to achieve an objective (The “How to achieve”)
- Key Results should be measurable, tracked regularly, ambitious, yet achievable
- Procurement Key Result example would be, “Lower rate of emergency purchases”
Procurement OKR Examples
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Achieve Operational Excellence in Procurement Function
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Achieve a 95% service level For normal stock items
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Achieve a 100% service level for critical, insurance, major consumables
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Purchase prices against budget for a category under 90%
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Increase Supplier Base Effectiveness and Efficiency
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Complete due diligence & evaluation for 30 potential suppliers this quarter
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Increase non-competitive existing suppliers within same category to 10
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Reduce RFQ/PR processing days from 15 to 10 for regular supplies
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Optimise Procurement Process to Increase Savings
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100% coverage of purchases through procurement process with savings as theme
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$4M USD savings from alternative standardized materials use
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65% Coverage of procurement process under digitization initiative
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Develop Strong Relationships with Internal Customers
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Improve further internal customer satisfaction index from 65% to 90%
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Reduce registered consumer complaints related to purchase department to 16 per quarter
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Evaluate and select 20% of total suppliers by cross-functional teams