The Path To Best-in-Class Procurement<\/h3><\/div><\/div><\/div>PurchTips edition #404<\/p>\n<\/div>
What Does It Take To Be Best-in-Class?<\/h4><\/div><\/div><\/div>If you want to achieve best-in-class procurement performance, you have to take four steps on the path there. They are:<\/p>\n
1. Rightsize your metrics. Performance improvement can be almost meaningless if you\u2019re improving at the wrong things. So, at least yearly, assess whether the metrics your procurement department is using are the best ones. For example, if your charge is to achieve maximum cost savings but two of your major metrics are \u201cnumber of suppliers used\u201d and \u201cpercentage of invoices with discrepancies,\u201d there\u2019s a problem. Always align your metrics with your charge.<\/p>\n
2. Outpace yourself. One way of knowing how well you\u2019re doing is by comparing this year\u2019s performance versus last year\u2019s performance. If you\u2019re not doing measurably better, at face value, it appears that your procurement department is failing to meet its own standard. Like a fine wine, a procurement department should get better over time, not worse.<\/p>\n
3. Outpace business growth. While comparing a procurement department\u2019s performance over time is essential because it shows, with a maximum number of constants, the rate of improvement of the department. What it doesn\u2019t communicate is whether that rate of improvement is fast enough for the organization. For example, if the procurement department\u2019s total savings is 10% higher than last year, that sounds good. But, if the organization had sales and spend growth of 90%, all of a sudden a 10% improvement sounds pretty weak.<\/p>\n
4. Outpace the industry. Even if you achieve year-over-year gains and exceed business growth, you still are only performing well by your own standards. Are those standards too low? The only way to know is to compare your performance measurements with those of other procurement departments. You may find that you\u2019re indeed performing well. Or you may find that there\u2019s a long way to go to be best-in-class. But that\u2019s not a bad thing. Those that know how best-in-class procurement departments perform have a better chance of attaining similar success than the clueless.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
Want A More Rewarding Procurement Career?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2021\/04\/career.jpg\" "\\"career\\"")
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>
PurchTips edition #404<\/p>\n<\/div>
What Does It Take To Be Best-in-Class?<\/h4><\/div><\/div><\/div>If you want to achieve best-in-class procurement performance, you have to take four steps on the path there. They are:<\/p>\n
1. Rightsize your metrics. Performance improvement can be almost meaningless if you\u2019re improving at the wrong things. So, at least yearly, assess whether the metrics your procurement department is using are the best ones. For example, if your charge is to achieve maximum cost savings but two of your major metrics are \u201cnumber of suppliers used\u201d and \u201cpercentage of invoices with discrepancies,\u201d there\u2019s a problem. Always align your metrics with your charge.<\/p>\n
2. Outpace yourself. One way of knowing how well you\u2019re doing is by comparing this year\u2019s performance versus last year\u2019s performance. If you\u2019re not doing measurably better, at face value, it appears that your procurement department is failing to meet its own standard. Like a fine wine, a procurement department should get better over time, not worse.<\/p>\n
3. Outpace business growth. While comparing a procurement department\u2019s performance over time is essential because it shows, with a maximum number of constants, the rate of improvement of the department. What it doesn\u2019t communicate is whether that rate of improvement is fast enough for the organization. For example, if the procurement department\u2019s total savings is 10% higher than last year, that sounds good. But, if the organization had sales and spend growth of 90%, all of a sudden a 10% improvement sounds pretty weak.<\/p>\n
4. Outpace the industry. Even if you achieve year-over-year gains and exceed business growth, you still are only performing well by your own standards. Are those standards too low? The only way to know is to compare your performance measurements with those of other procurement departments. You may find that you\u2019re indeed performing well. Or you may find that there\u2019s a long way to go to be best-in-class. But that\u2019s not a bad thing. Those that know how best-in-class procurement departments perform have a better chance of attaining similar success than the clueless.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
Want A More Rewarding Procurement Career?<\/h5><\/div><\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>
If you want to achieve best-in-class procurement performance, you have to take four steps on the path there. They are:<\/p>\n
1. Rightsize your metrics. Performance improvement can be almost meaningless if you\u2019re improving at the wrong things. So, at least yearly, assess whether the metrics your procurement department is using are the best ones. For example, if your charge is to achieve maximum cost savings but two of your major metrics are \u201cnumber of suppliers used\u201d and \u201cpercentage of invoices with discrepancies,\u201d there\u2019s a problem. Always align your metrics with your charge.<\/p>\n
2. Outpace yourself. One way of knowing how well you\u2019re doing is by comparing this year\u2019s performance versus last year\u2019s performance. If you\u2019re not doing measurably better, at face value, it appears that your procurement department is failing to meet its own standard. Like a fine wine, a procurement department should get better over time, not worse.<\/p>\n
3. Outpace business growth. While comparing a procurement department\u2019s performance over time is essential because it shows, with a maximum number of constants, the rate of improvement of the department. What it doesn\u2019t communicate is whether that rate of improvement is fast enough for the organization. For example, if the procurement department\u2019s total savings is 10% higher than last year, that sounds good. But, if the organization had sales and spend growth of 90%, all of a sudden a 10% improvement sounds pretty weak.<\/p>\n
4. Outpace the industry. Even if you achieve year-over-year gains and exceed business growth, you still are only performing well by your own standards. Are those standards too low? The only way to know is to compare your performance measurements with those of other procurement departments. You may find that you\u2019re indeed performing well. Or you may find that there\u2019s a long way to go to be best-in-class. But that\u2019s not a bad thing. Those that know how best-in-class procurement departments perform have a better chance of attaining similar success than the clueless.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
Want A More Rewarding Procurement Career?<\/h5><\/div><\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>