How do you measure the benefits of a purchasing policy?

Make sure you include all the costs involved with the items you are purchasing. Many times, inbound freight-including costs from other countries if importing like duties, MPFs, etc. are paid by different departments in the organization and don't really "come together" to make a TOTAL anywhere on the P&L because they are paid in different buckets.

Measuring the benefits of a purchasing policy involves assessing various factors such as cost savings, vendor performance, quality of goods or services, and compliance with regulations. Quantitative metrics like cost reductions, negotiation outcomes, and inventory turnover rates provide tangible insights. Qualitative assessments may include supplier relationships, risk mitigation, and alignment with organizational goals. Additionally, tracking customer satisfaction and market competitiveness can gauge overall effectiveness. Ultimately, a comprehensive evaluation framework ensures the policy's alignment with strategic objectives and its contribution to organizational success.

Having a policy and clear set of aligned goals can definitely assist with finding multi-solution opportunities. In the sustainable procurement space, for example, understanding that your organization is committed to specific KPIs around both supplier diversity AND environmental responsibility can ensure you are able to build toward sourcing with diverse suppliers who can support your climate, waste or other environmental goals.

It involves assessing various aspects of the policy's impact on an organization. Here are some key steps and metrics can be considered while evaluating the effectiveness of a purchasing policy: Cost Savings Supplier Performance Compliance Risk Management Process Efficiency Technology Utilization Measure the impact on automation, data accuracy, and overall efficiency. Assess the flexibility and adaptability of the purchasing policy to changing market conditions. Remember that the specific metrics and methods for measuring the benefits of a purchasing policy may vary depending on the organization's goals, industry, and the nature of its procurement activities.

Purchasing Policy is *discipline* made by organisation. Anything which is in discipline always beneficials to all with in as well as outside organisation.

Remember to identify metrics that roll up into your organization's overall expression of commitments and progress on goals, so that your procurement level accomplishments are recognized as critical contributors to those high level strategic commitments. Take a case where you reduced packaging waste as part of a cost and waste reduction initiative - but your organization's focus is on climate. Make sure that you can also work (with your suppliers or perhaps an environmental certification calculator) to express that goal in reduction in metric tons of carbon equivalent, to deliver against your org's climate commitments. Visit sustainablepurchasing.org for more.

I agree. And I prescribe to a simple approach of sharing my method; G.O.M.A. Goal, Objective, Method and Attitude. The Goal has to be communicated, understood and agreed by all stakeholders. The Objectives are measurable achievements that lead towards reaching the goal. The Method is the strategy used to reach the goal and objectives. And the Attitude is the disposition of human resources involved in the process.

"O que n?o consegue ser medido n?o pode ser gerido", sempre ouvi dizer. Pelo que primeiramente deve pensar no que se quer ver, que informa??es necessita e depois trabalhar numa ferramenta (desenvolvida internamente ou comprada) - eu optei por PowerBI - que traga os numeros e gere os alertas sempre que há desvio. Isto permite identificar lacunas, corrigir erros rapidamente mas tambem nos dá informa??es importantes para a tomada de decis?o de futuras necessidades.

Custo Total de Aquisi??o (CTA): essa métrica calcula o custo total envolvido na aquisi??o dos produtos ou servi?os e podem ajudar a identificar oportunidades de redu??o de custos.

In addition to collecting and analyzing data, it's crucial to establish a baseline before the implementation of the purchasing policy. This baseline provides a reference point for measuring changes and improvements. Regularly reassessing the baseline allows for dynamic adjustments to the purchasing policy based on evolving organizational needs and market conditions. Additionally, incorporating feedback from stakeholders, suppliers, and end-users into the analysis enhances the holistic evaluation of policy effectiveness.

Agree. We should know also the policy and work flow of the other departments so we could make sure that ours not inhibit their flow also. Knowing their KPI could be one advantage for we can somehow make our work can help them for achieving their goal or might be vice versa. We could see any possibilities and opportunities by this knowing each other