Procurement Dashboard & Tools

EmpoweringCPO offers an interactive spend analytics dashboard along with inbuilt spend analytics dashboard.

As they say you cannot change, improve and achieve if you are not tracking and measuring your goals and KPI’s, and so Dashboard and Tools are very essential if a procurement organization wants to improve its efficiency and effectiveness. EmpoweringCPO offers various procurement dashboard and tools to effectively manage and facilitate performance. The below listed image presents the different type of tools provided by EmpoweringCPO.

Key to achieving procurement goals and KPI's | Procurement Dashboard | Vendor Performance Dashboard | EmpoweringCPO

Procurement KPI Dashboard

CPO dashboard, as the name suggests, this tool summarizes the performance of the procurement organization in terms of different initiatives under taken, some of them are listed below:

  • Sourcing Roadmap / Implementation Plan ( Ongoing & Upcoming projects, Milestones)
  • Strategic Sourcing Project Outcome ( Savings Achieved Vs. Realized Savings)
  • Spend Under Management (% increase achieved as compared to the previous year)
  • Low Cost Country Sourcing opportunities (Projects identified, Ongoing & Upcoming projects)
  • CSR Goals – Supplier Diversity, Sustainable Procurement and others (Tracking & Improving)
  • Stake Holder Metrics (Internal Customer Feedback & Supplier Performance / Risk)
  • Process & Technology Metrics (Procurement Efficiency & Activity Metrics)
  • People & Knowledge Metrics (Staff Competencies, Training and Retention)

The above listed initiatives are presented in form of Key Performance Indicators (KPI) . They can be drilled to multiple levels to provide insights to CPO and senior management. The source of data for procurement reporting dashboard is through all the other tools listed here.

Spend Analytics Dashboard 

Spend tool is considered the core tool because it holds most of the raw data and acts as a source for most of the other tools presented here. The objective of this tool is to clean, collate, classify and present the organization spend data from various systems as per the pre-decided organization taxonomy. This taxonomy is unique for each organization and varies from 3 to 7 different layers depending on the complexity of the organization. The last level of the taxonomy represents unique set of suppliers with unique core competencies and ideally should represent a set of participants for a unique RFP.

The spend analysis process is divided into following steps:

  • Data Collection, Collation and Cleaning
  • Taxonomy Preparation
  • Data Classification
  • Data Analysis
  • Interactive Visual Dashboard

EmpoweringCPO is capable of developing spend dashboard and tools using multiple technologies as per client preference. Business Intelligence and Dashboard platforms classified in Leaders quadrants are adopted so as to present the best user experience and insights. Spend analytics dashboard helps in exploring data across multiple dimensions and allows category managers and CPO’s to remain on top of their categories and KPI’s.

Opportunity Assessment Dashboard

Opportunity Assessment as a tool usually goes along with spend tool and in-fact at times is considered complementary to the later. The objective of this tool is to keep track of all the major categories with data points like:

  • when was the last RFP conducted for the category
  • how much saving was achieved
  • when is it planned to be conducted next
  • potential saving if the category is sourced again

Opportunity Assessment as a tool allows management team to prepare multi-year sourcing wave plan and estimate savings that may be possible for the following years. For projecting savings and identifying opportunities, EmpoweringCPO adopts its proven approach of reviewing each category on two broad parameters:

  • Ease of sourcing or implementation
  • Savings potential

Both these parameters are again subdivided into multiple factors as presented below:

Ease of Sourcing & Implementation Savings Potential
Availability & quality of data Potential to leverage
Degree of customization in design Level of commoditization
Availability of suppliers / geographical barriers Competition in the market
Number of incumbent suppliers Demand – Supply scenario
Time to qualify suppliers / switching risk Current compliance mechanism
Organization sensitivity / contractual complexity Time since last RFP

Scoring all the categories for the above listed parameters and subsequently compiling data for all categories helps in presenting the categories that should be targeted. To fine tune further and estimate potential savings the category management dashboard complements in projecting the right number. In addition it presents information like global trend, demand and supply situation, main competitors, market share, porters 5 forces and other critical insights.

Compliance Management Tool

Compliance management is very critical as otherwise the procurement organization may run into a scenario where there is a huge gap between realized savings and reported savings. Many procurement functions estimate large savings number when contracts are signed.  They also invest significant time and effort in negotiating contracts for necessary goods and services, only to have a third or more of their purchasing dollars flow outside those deals. Some of the obvious fall-outs of non-compliance and maverick purchases are:

  • Very high prices
  • Risk of losing out on volume discounts and rebates

As compared to the current contract  that was finalized after the sourcing process, the tool helps in tracking:

  • Vendor Compliance
  • Price Compliance

The objective of this tool is to ensure that the orders are placed only with the vendors that were shortlisted after the sourcing process and at the same price that was agreed and negotiated during and after the strategic sourcing process.

Supplier Risk Management Tool

This tool helps in predicting and preparing for the probability of variables which may adversely or favorably affect the supply chain. The process starts with evaluating the top 20% vendors and scoring them on two broad parameters listed below:

Business Impact Supply Risk
Total cost (spend volume) Financial health, logistics, Inventory and lead time
Impact on customer value Entry barrier, intellectual property
Impact on product differentiation Pressure from substitute
Impact on performance of the company Bargaining power
Impact with reference to safety/ Governmental/ Industry Regulations Off shore supply
Impact on Technological status or ranking Availability of suppliers

The scoring is conducted by EmpoweringCPO consultants along with a small group of stakeholders and category manager in the client organization. This process helps in segregating vendors into multiple buckets

  • Leverage: Supplier that has gone through due diligence process but one that can be replaced without severe disruption (Competitive marketplace, high expenditure levels, commodity type items).
  • Routine: Suppliers that are low-dollar, low-value, easily replaced and did not go through a formal due diligence process (not key to core business).
  • Strategic: Those who are woven into the fabric of the company (No true substitute, usually single source, high product differentiation, key to core business).
  • Bottleneck: Those who do not have true substitutes usually single source, not core to business but lack of availability will cause problems.
  • Critical: Those that could cause disruption in manufacturing line, services or delivery to market and affect revenue generation

Thorough research is conducted for the vendors which are classified as critical and strategic. The objective is to collect as much information about these vendors as possible so as help in predicting probable failures. This exercise also helps in preparing a mitigation plan if any failure was to occur. Along with vendor performance dashboard, this tool is structured to promote collaboration during scoring process as well as supports version tracking.

Category Management Tool

Category management dashboard helps in tracking various upstream and downstream market drivers of a commodity. The objective of the tool is to help predict the changes in the market place so that the procurement organization is better prepared for all eventualities.  The tool is in form of a dashboard created to present following content, all different types of drivers and industry snapshot on a same screen:

  • Industry snapshot – size, growth rate, # of players, major players, porters 5 forces, consumption pattern, application and use of the commodity
  • Incumbent supplier base and change in their spend over previous year
  • Cost structure / cost component and their breakup
  • Upstream indices – price indices for all major cost components and price index for category being sourced as well as the futures contract for the category
  • Downstream indices – price index for all major competing products which have same raw material / or commodity as base, current / future demand for competing products

Most of the drivers, indices and price trends are updated and refreshed automatically every month. Parameters like consumption pattern, application and use of the commodity, total market size, cost drivers / components and other parameters are refreshed less frequently. Broadly the parameters are divided into some which are dynamic and some which are relatively static.

The objective of this dashboard is to provide macro level early warning signals to category managers so as to help them prepare and manage their categories proactively.

Supplier Diversity Program Dashboard

Supplier diversity dashboard helps in tracking the total spend of the organization with diversity vendors. It gives a snapshot of the change as compared to the total spend as compared to what it was in the previous month or year. This tool is closely linked with the spend tool and a column is added which acts as an identifier to present the type of diversity vendor. The diversity is classified as:

  • Woman Business Enterprise
  • Minority Business Enterprise
  • Small Business
  • Veteran Owned

Thus this dashboard acts as a very powerful tool to help companies achieve their Corporate Social Responsibility (CSR) goals.

Green Procurement Dashboard

Sustainable procurement dashboard works closely with spend tool. It helps in identifying categories that can be re-sourced and thus results in improved sustainability goals for the organization. The criteria used for identifying these categories are:

  • Environmental or Social impact are clear and huge
  • Plenty of green alternatives are available
  • Cost or Price of the sustainable product or service is lower or equal as compared to that for the current specification
  • Focus is on categories that can be supplied by local vendors
  • Categories for which Ecolabels are available
  • Even if Ecolabels are not available identifying categories for which international standards and specifications related to sustainability goals are available

 

 

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