How do procurement dashboards help companies in any industry track KPIs, perform spend analysis, identify savings opportunities and implement cost reduction strategies to improve their business?
Improve Compliance Rate
The compliance rate is how completely companies fulfill their contractual agreements with their customer. Besides quantities and prices, agreements include other clauses like cancelation terms, response times, diversity programs, process changes, and delivery windows. This is crucial for businesses that rely on procurement organizations to complete their order. Procurement dashboards show individual and category supplier compliance performance, which helps companies with benchmarking and holds suppliers accountable now. This process provides valuable data to inform future supplier negotiations.
Track Suppliers, Their Quantity, and Their Relationship with Your Company
As a company, you’re sourcing from many suppliers at once who are competing for your investment. Some procurement leaders leverage their procurement processes and implement data-driven strategies to ensure on-time delivery, provide better products and cost-effective rates.
Dashboards provide greater insight into supplier performance and help improve procurement performance overall. By seeing supplier performance in detail and in aggregate, organizations can select the best suppliers for their next orders and long-term contracts.
Purchase Price Variance
Material prices fluctuate for a variety of reasons, and many lie outside of your control. Procurement dashboard features provide greater visibility into purchase price variances like item and supplier commonality, spend under contract, and seasonality. Dashboard insights narrow price variance ranges, and can be used to manage bulk purchases, hold inventory or annual contracted prices.
A procurement department’s purchase price management abilities are vastly improved, increasing budgeting and forecasting activities. Identifying supplier risk becomes more apparent and reigning in excess spending is more manageable.
In manufacturing, direct material costs can consume as much as 70% of total manufacturing costs. Procurement Analytics Dashboards are essential to reducing excessive manufacturing costs and implement long-term cost reduction. When used correctly, PPV can be a valuable performance indicator and its metrics are vital to increasing your organization’s purchasing power and meeting cost savings benchmarks.
Sourcing and maintaining a diverse supplier portfolio is essential for any industry’s procurement efforts. It’s a core strategic procurement function that procurement dashboards can help optimize and set achievable supplier benchmarks.
Often diverse supplier targets come from broader, executive level corporate goals regarding diversity across the workplace. Suppliers who can report to your their supplier diversity metrics are working at levels of operational excellence with similar values. Their diversity reporting allows you to show both your Tier 1 and Tier 2 supplier diversity metrics.
Dashboards are integral in assessing supplier portfolio risk and diversity. A dashboard takes information from a variety of data sources to conduct procurement analysis that yields insightful metrics.
Useful metrics include amounts for Diverse vs. Non-Diverse Suppliers in areas like these:
- Active/inactive contracts
- Off-contract spending
- Purchase order logs
- Budget benchmark indicators
- Total invoices
- Cost/spend analysis
- Non-financial vendor information
- Certifications for Minority-, women-, and veteran-owned businesses
You don’t have to do anything here. Big data from your quality and ERP systems is saved and the dashboard shows defect rates automatically. This process will identify high-performing suppliers and eliminate low-performers from your supply chain. You can figure out your future business prospects with the help of the Procurement Dashboard.
Measure Lead Time
Delivering orders is not the only important variable when picking a supplier. Suppliers need to fulfill orders on time including deliveries. Procurement Dashboards benchmark (Procurement Benchmarking Dashboard) and select the best supplier to do the job based on quality products, supply quantity and lead time needed to deliver the complete order. No order will go unfulfilled with the dashboard tracking the procurement process and purchasing KPIs.
Read More:- AI in Procurement
In Time and Accurate Reporting
Procurement Dashboards apply visualization to bring you accurate, company-wide metrics and reports about your procurement KPIs and strategy performances. It tracks your organization’s operations and performs analysis to present procurement metrics regarding business operations in the past week, month or quarter. They provide your organization with the ability to perform complete spend analysis, playing a pivotal role in your overall procurement strategy.
The dashboard compiles AI-powered procurement data and can quickly generate emergency reports or monthly reports to pinpoint opportunities for improvement. The accurate tracking data will enable you to identify strategic sourcing opportunities, see total costs, set benchmarks and KPIs to help achieve your business’ future goals. Procurement teams are able to leverage in-depth reports in strategy meetings with their peers, stakeholders, CFOs and CPOs to communicate goals and department needs effectively.
Contact us today to learn more about how Simfoni’s technology and processes can help your organization achieve world-class Spend Analytics, Savings Tracking, Procurement Benchmarking & Tail Spend Management Solutions.