How do you set SMART goals for your purchase orders?

1 What is SMART?

SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-bound. It's a simple but effective way to create and evaluate your goals, whether they are personal or professional. By applying the SMART criteria to your PO goals, you can ensure that they are clear, quantifiable, realistic, aligned with your business strategy, and have a deadline.

2 How to set Specific PO goals

A specific goal is one that clearly defines what you want to achieve, why you want to achieve it, and how you will achieve it. A vague goal, such as "reduce PO costs", is not specific enough to guide your actions and measure your progress. A specific goal, on the other hand, could be "reduce PO costs by 10% in Q1 by negotiating better terms with suppliers and consolidating orders". A specific goal answers the questions of who, what, where, when, why, and how.

3 How to set Measurable PO goals

A measurable goal is one that has a quantifiable indicator of success, such as a number, percentage, or ratio. A measurable goal allows you to track your performance and evaluate your results. A non-measurable goal, such as "improve PO quality", is too subjective and vague to assess. A measurable goal, on the other hand, could be "improve PO quality by reducing errors by 50% in Q1 by implementing a PO approval system and training staff". A measurable goal has a baseline, a target, and a method of measurement.

4 How to set Achievable PO goals

An achievable goal is one that is realistic and attainable, given your resources, capabilities, and constraints. An unrealistic goal, such as "eliminate PO delays", is not achievable and may demotivate you and your team. An achievable goal, on the other hand, could be "reduce PO delays by 20% in Q1 by streamlining the PO process and communicating with suppliers". An achievable goal takes into account your current situation, your potential challenges, and your available solutions.

5 How to set Relevant PO goals

A relevant goal is one that is aligned with your business vision, mission, and strategy. A irrelevant goal, such as "increase PO volume", may not contribute to your overall success and may divert your attention and resources from more important priorities. A relevant goal, on the other hand, could be "increase PO volume by 15% in Q1 by expanding into new markets and offering new products". A relevant goal supports your long-term objectives and adds value to your business.

6 How to set Time-bound PO goals

A time-bound goal is one that has a specific deadline or timeframe for completion. A open-ended goal, such as "optimize PO workflow", may not create a sense of urgency and accountability. A time-bound goal, on the other hand, could be "optimize PO workflow by Q1 by automating PO creation and approval and integrating with inventory management". A time-bound goal creates a clear timeline and milestones for your actions and results.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?