Crimson & Co comment on the key to peak performance - April 2008
Date - 24th April 2008
Published – Supply Management
Contact - Natalie Henfrey
What are the best KPIs for a Purchasing & Logistics Executive?
The relevant KPIs fall into three broad categories: cost, service and performance. The actual KPIs depend on what is important for your business but it is important that whatever they are you monitor them and the organisation is committed to using them to improve.
Typical purchasing KPIs would include savings (versus budget or year-on-year), price variance, on-time and in-full (OTIF), invoice accuracy, quality and in a service contract complaints. Logistics would include cost per unit delivered (fixed and variable) and including cost per mile and unit picked, on-time and in-full to customer, warehouse utilisation, vehicle and fleet utilisation and throughput time per unit.
Successful KPI management needs your colleagues to be engaged and supportive. This means that the data sources and means of calculation should be indisputable otherwise the improvement drive can lose focus. KPIs should also be lean to produce and as automated as possible so resources which are available can be used to improve rather than produce KPIs.