Purchasing Goals: The Good, The Bad, & The Ugly<\/h1><\/div><\/div><\/div>Purchasing Goals?<\/h2><\/div><\/div><\/div>We’ll go from worst-to-best in our discussion of the objectives that purchasing departments set for themselves?<\/p>\n
The Ugly \u2013 No Goals.<\/b> Purchasing departments who have no documented goals are not moving in any direction whatsoever. Their value is not measured nor communicated to management. These purchasing departments are likely to find themselves being downsized or outsourced.<\/p>\n
The Bad \u2013 Vague Goals.<\/b> Having goals that fail to state exactly what needs to be accomplished is almost as futile as having no goals. These types of goals make a subjective process out of distinguishing good performance from bad. An example would be “Improve control of spending.” What does that mean? Does that mean that requiring 25 signatures to make a purchase will be doing a “good job?” Could a purchasing agent think control was sufficiently improved yet an executive disagree?<\/p>\n
The Good \u2013 Specific & Measurable Goals.<\/b> Simply being specific and using numbers makes goals infinitely more effective. Let’s modify our last example: “Improve control over spending by increasing expenses under contract by 25% over the previous year.” Now that’s better. You know what is meant by “improve control over spending.” The numbers enable you to determine whether you exceeded, met, or failed to meet your goal. If you increased the expenses under contract by only 20%, you came up short. If you achieved a 30% increase, you’ve done very well. A goal like this gives you a clear target to shoot at.<\/p>\n
The Great \u2013 Money-Based Goals.<\/b> Great goals are not only specific and measurable, but they are expressed in the language of business – money! The reason you reduce inventory, increase contract coverage, or reduce lead time is to put your organization in a better financial position. So, translate other statistics into money. Continuing with our example… “Improve control over spending by increasing expenses under contract by $3 million.”<\/p>\n
The Best \u2013 Organizational Strategy-Based Goals.<\/b> The best goals go a step beyond great goals. They are tied to the strategy and goals of the overall organization. “Improve control over spending by increasing expenses under contract by $3 million” is a great goal and may be the best goal if the organization’s goal is to maintain or increase profitability. But what if the organization’s #1 goal was to be the first to market a new widget? There is a fatal disconnect between executive management and purchasing management. Speed, rather than expense control, should be the priority. The best goals facilitate the accomplishment of organizational goals.<\/p>\n
Recommended Reading:<\/b><\/p>\n\n- Purchasing Goals<\/a><\/li>\n
- Purchasing Department Goals<\/a><\/li>\n<\/ul>\n
NLPA Learning<\/b><\/a><\/span>:<\/b> Looking for authoritative procurement templates, tools, webinars, and more? Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in NLPA Learning<\/span>.<\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div>Do You Want a More Rewarding Procurement Career?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/spsm_verify.jpg\" "\\"spsm_verify\\"")
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n
Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div>
Download<\/span><\/a><\/div><\/div><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/services.jpg\" "\\"services\\"")
<\/span><\/div>Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n
You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n
Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>
Purchasing Goals?<\/h2><\/div><\/div><\/div>We’ll go from worst-to-best in our discussion of the objectives that purchasing departments set for themselves?<\/p>\n
The Ugly \u2013 No Goals.<\/b> Purchasing departments who have no documented goals are not moving in any direction whatsoever. Their value is not measured nor communicated to management. These purchasing departments are likely to find themselves being downsized or outsourced.<\/p>\n
The Bad \u2013 Vague Goals.<\/b> Having goals that fail to state exactly what needs to be accomplished is almost as futile as having no goals. These types of goals make a subjective process out of distinguishing good performance from bad. An example would be “Improve control of spending.” What does that mean? Does that mean that requiring 25 signatures to make a purchase will be doing a “good job?” Could a purchasing agent think control was sufficiently improved yet an executive disagree?<\/p>\n
The Good \u2013 Specific & Measurable Goals.<\/b> Simply being specific and using numbers makes goals infinitely more effective. Let’s modify our last example: “Improve control over spending by increasing expenses under contract by 25% over the previous year.” Now that’s better. You know what is meant by “improve control over spending.” The numbers enable you to determine whether you exceeded, met, or failed to meet your goal. If you increased the expenses under contract by only 20%, you came up short. If you achieved a 30% increase, you’ve done very well. A goal like this gives you a clear target to shoot at.<\/p>\n
The Great \u2013 Money-Based Goals.<\/b> Great goals are not only specific and measurable, but they are expressed in the language of business – money! The reason you reduce inventory, increase contract coverage, or reduce lead time is to put your organization in a better financial position. So, translate other statistics into money. Continuing with our example… “Improve control over spending by increasing expenses under contract by $3 million.”<\/p>\n
The Best \u2013 Organizational Strategy-Based Goals.<\/b> The best goals go a step beyond great goals. They are tied to the strategy and goals of the overall organization. “Improve control over spending by increasing expenses under contract by $3 million” is a great goal and may be the best goal if the organization’s goal is to maintain or increase profitability. But what if the organization’s #1 goal was to be the first to market a new widget? There is a fatal disconnect between executive management and purchasing management. Speed, rather than expense control, should be the priority. The best goals facilitate the accomplishment of organizational goals.<\/p>\n
Recommended Reading:<\/b><\/p>\n\n- Purchasing Goals<\/a><\/li>\n
- Purchasing Department Goals<\/a><\/li>\n<\/ul>\n
NLPA Learning<\/b><\/a><\/span>:<\/b> Looking for authoritative procurement templates, tools, webinars, and more? Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in NLPA Learning<\/span>.<\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div>Do You 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? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n
Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div>
Download<\/span><\/a><\/div><\/div><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div><\/span><\/div>Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n
You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n
Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>
We’ll go from worst-to-best in our discussion of the objectives that purchasing departments set for themselves?<\/p>\n
The Ugly \u2013 No Goals.<\/b> Purchasing departments who have no documented goals are not moving in any direction whatsoever. Their value is not measured nor communicated to management. These purchasing departments are likely to find themselves being downsized or outsourced.<\/p>\n
The Bad \u2013 Vague Goals.<\/b> Having goals that fail to state exactly what needs to be accomplished is almost as futile as having no goals. These types of goals make a subjective process out of distinguishing good performance from bad. An example would be “Improve control of spending.” What does that mean? Does that mean that requiring 25 signatures to make a purchase will be doing a “good job?” Could a purchasing agent think control was sufficiently improved yet an executive disagree?<\/p>\n
The Good \u2013 Specific & Measurable Goals.<\/b> Simply being specific and using numbers makes goals infinitely more effective. Let’s modify our last example: “Improve control over spending by increasing expenses under contract by 25% over the previous year.” Now that’s better. You know what is meant by “improve control over spending.” The numbers enable you to determine whether you exceeded, met, or failed to meet your goal. If you increased the expenses under contract by only 20%, you came up short. If you achieved a 30% increase, you’ve done very well. A goal like this gives you a clear target to shoot at.<\/p>\n
The Great \u2013 Money-Based Goals.<\/b> Great goals are not only specific and measurable, but they are expressed in the language of business – money! The reason you reduce inventory, increase contract coverage, or reduce lead time is to put your organization in a better financial position. So, translate other statistics into money. Continuing with our example… “Improve control over spending by increasing expenses under contract by $3 million.”<\/p>\n
The Best \u2013 Organizational Strategy-Based Goals.<\/b> The best goals go a step beyond great goals. They are tied to the strategy and goals of the overall organization. “Improve control over spending by increasing expenses under contract by $3 million” is a great goal and may be the best goal if the organization’s goal is to maintain or increase profitability. But what if the organization’s #1 goal was to be the first to market a new widget? There is a fatal disconnect between executive management and purchasing management. Speed, rather than expense control, should be the priority. The best goals facilitate the accomplishment of organizational goals.<\/p>\n
Recommended Reading:<\/b><\/p>\n NLPA Learning<\/b><\/a><\/span>:<\/b> Looking for authoritative procurement templates, tools, webinars, and more? Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in NLPA Learning<\/span>.<\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div> Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div> Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>\n
Do You Want a More Rewarding Procurement Career?<\/h5><\/div>
<\/span><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div>
<\/span><\/div>
![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/services-contracting.jpg\" "\\"services-contracting\\"")
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