As someone involved in procurement, you understand the importance of key performance indicators (KPIs) for an effective and efficient supply chain. 40% to 50% of procurement cycle time is attributed to inefficiencies in the supply chain.
Tracking all these procurement KPIs can lead to a lot of data. Now, making sense of this KPI data is another struggle.
The best way to tackle, analyze, and visualize these large chunks of data is by using Procurement Dashboards.
In this blog post, we will go through everything about procurement dashboards - from important KPIs required to dashboard templates.
Continue reading to become a pro in building procurement dashboards.
What is a procurement dashboard?
A procurement dashboard is a visualization tool that centralizes your key performance indicators (KPIs) in a visual format. It provides an overview of metrics from supplier performance to cost controls.
W. Edwards Deming, a data analyst, famously said, "In God we trust; all others bring data." The procurement dashboard helps you derive actionable insights from data for the next stakeholder meeting.
Along with a neat interface, it also assists in decision-making. Charts, graphs, and tables are used to break down complex data, making it digestible and easy to understand for anyone. Procurement dashboards are versatile. You can easily spot inefficiencies and discover new opportunities.
And what is best about procurement dashboards is they are customizable. As every procurement process is different, you can add the procurement KPIs that you want to track and tailor them to your needs.
We mentioned ‘actionable insights’ a couple of times in the blog post till now. Let’s see in detail what actionable insights you can get from procurement dashboards in the next section.
See it in actionProcurement Dashboards
What Can You Learn from the Procurement Dashboards?
Procurement dashboards are packed with data, but it's all about translating that data into insights. Here are the insights you can learn from procurement dashboards.
1. Cost Management
Compare suppliers, orders, and contracts to identify cost-saving opportunities.
A procurement dashboard shows a side-by-side comparison of costs incurred with each supplier over the last quarter. For example, you notice that Supplier A consistently undercuts Supplier B by 10% for the same quality of goods.
The dashboard gave you an actionable insight: either renegotiate with Supplier B or shift more business to Supplier A.
2. Supplier Performance
Metrics like delivery times, quality of products, and compliance help you assess and manage supplier risks.
On the dashboard, there's a delivery time metric for each supplier. You spot that Supplier X consistently misses the delivery window by two days. Now you have the data to either confront them or consider other options.
3. Spend Analysis
A quick look at your dashboard can reveal high-priority spending categories and the effectiveness of your procurement strategies.
For example, when you discover that 35% of your quarterly spend is on office supplies. It is time to evaluate the use of these office supplies, negotiate bulk discounts, or look for alternative vendors.
Related Read: Spend Analytics - Explore From Benefits to Best Software
4. Internal Processes:
Track operational efficiencies, compliance rates, and even forecast future demands.
The dashboard shows the average days taken for various procurement activities. If you find out that it takes 40 days from requisition to purchase, hinting at possible inefficiencies in your procurement process.
5. Accountability
Team performance metrics are on the dashboard, fostering transparency and accountability within your procurement team.
When you notice team members with unusually low compliance rates for the month. Time for a review or additional training.
The 5 Important KPIs for Procurement Dashboards
Before jumping into the procurement dashboard templates, let’s first understand the important KPIs you must track in your procurement dashboards.
Here are our top 5 KPI recommendations -
- Spend Under Management
- Supplier Performance Score
- Inventory Turnover Rate
- Cost Savings Percentage
- Compliance Rate
1. Spend Under Management
Formula: (Managed Spend / Total Spend) x 100
When you track Spend Under Management, you're looking at a snapshot of your financial health. This simple formula calculates the percentage of your total spending that is managed or under control. A high percentage means you're ahead in financial planning and strategy, giving you a crucial edge in optimizing your budgets.
Reviewing this metric continually helps you stay on top of emerging trends and spot any red flags early. By doing so, you will be the proactive manager who optimizes before problems escalate.
2. Supplier Performance Score
Formula: (Weighted Factors of Supplier Performance / Total Possible Points) x 100
Supplier Performance Score is a holistic evaluation that combines various factors like delivery time, quality, and cost to give you a comprehensive score. It amalgamates qualitative and quantitative factors to grade your suppliers. It's a multi-dimensional view, from meeting deadlines to maintaining quality.
Your goal is a higher percentage, indicating stellar vendor reliability and performance. A fluctuating score means attention, as it might be time for a strategic discussion with your supplier.
3. Inventory Turnover Rate
Formula: Cost of Goods Sold / Average Inventory Value
Inventory Turnover Rates are vital checkups for your financial wellness. You divide the Cost of Goods Sold (COGS) by the average value of the inventory you’ve held over a particular time frame.
Are products collecting dust in the warehouse? That's capital tied up that could be used elsewhere. Conversely, high turnover might mean strong sales but could also indicate an under-stock situation. Regularly tracking this KPI offers insights into optimizing storage costs and fine-tuning your procurement orders. This attention to detail can translate into better cash flow and reduced storage costs.
4. Cost Savings Percentage
Formula: (Amount Saved / Original Cost) x 100
The Cost Savings Percentage tells you how much you’ve saved through strategies like better negotiations or choosing more cost-effective suppliers.
For instance, if you renegotiate contracts or find alternate suppliers who offer better deals, those savings should be quantified and celebrated. Beyond that, look at the long-term impact: can these savings be invested in other areas for further growth or technological upgrades? It's a metric that serves as a performance indicator and a strategic planning tool.
5. Compliance Rate
Formula: (Number of Compliant Purchases / Total Number of Purchases) x 100
Compliance Rate is a fundamental measure of how well your procurement aligns with both internal policies and external regulations. You count the number of compliant purchases, divide by the total number of purchases made, and then turn that into a percentage.
Consistent non-compliance isn't just a legal risk, it could harm your brand's reputation. Imagine the peace of mind that comes with a high compliance rate. You're less likely to be blindsided by audits, legal issues, or even penalties, freeing you to focus on strategies for growth.
Top 4 Procurement Dashboard Templates with Samples and Examples
Building a procurement dashboard from scratch involves resources from your BI team and expensive technical software. On top of this, it might take weeks or even months to build one. To add to all of this, if you need custom procurement dashboards, it will always be a to-and-fro between the procurement team and the BI team.
To avoid all this, you can use an embedding analytics software.
Databrain connects with your current databases and data warehouses without duplicating data or designing new models. It can embed analytics features into any of your favorite applications seamlessly to give real-time insights.
DataBrain's plug-and-play integrations, no-code tools, and flexible embedding options make it easy to quickly customize and build procurement dashboards.Try 14 days free trial
Even though building dashboards with Databrain is a breeze, you might need some inspiration to get started. In this section, we will discuss the four best procurement dashboard templates.
1. Supplier Delivery Dashboard
A Supplier Delivery Dashboard is a centralized tool that makes managing your procurement activities a breeze. It presents real-time data on supplier performance, such as delivery times and product quality, all in one place. No need to sift through piles of spreadsheets or emails; this dashboard provides a snapshot of what you need to know.
You can see who's delivering on time and who's lagging, so you can make quick decisions. It helps in identifying bottlenecks or underperformers, allowing for swift corrective actions. Additionally, the dashboard provides financial metrics, like cost efficiencies, so you understand the value each supplier is bringing to your business.
Not just that, it's also an excellent tool for assessing the quality of delivered items. If a product falls below the expected standards, the dashboard flags it, enabling you to take immediate action.
2. Procurement Costs Dashboard
In business, every penny counts, and this dashboard ensures not even a cent slips through the cracks.
The Procurement costs dashboard collects all your spending data and neatly arranged it so you can see exactly where your money's going. We're talking material costs, labor, shipping, you name it. No more piecing together reports or manually updating Excel sheets, as this dashboard does the heavy lifting for you.
The ability to segment costs is what really sets it apart. You can break down expenditures by supplier, product category, or even time frame. Ever wonder how much you spent on office supplies last quarter? Or which supplier has been quietly increasing prices? The answers are just a click away.
But wait, it's not just about tracking costs. It is also about discovering opportunities for savings. Through trend analysis, you can identify seasonal price fluctuations, negotiate better deals, or find alternative suppliers. The dashboard acts like a financial compass, guiding you towards cost-effectiveness.
3. Procurement KPIs Dashboard
This dashboard is your scoreboard for procurement success. It is all about clear data-driven insights to help you ace your procurement strategies.
It zeroes in on Key Performance Indicators (KPIs), those vital stats that tell you whether you're hitting your procurement goals. Metrics like order accuracy, supplier compliance, and cost savings are all in a digestible format.
These KPIs are crucial to continuous improvement. If the dashboard shows high order accuracy but low supplier compliance, you know exactly where to focus your efforts. I
Additionally, with real-time data, you can make on-the-fly decisions that could save your company time and money.
Notice a drop in a supplier's performance? Time to renegotiate. Costs creeping up? Maybe it's time to source alternative suppliers.
What's more, this dashboard allows you to set benchmarks. You can compare current performance to past data or even industry standards. That's actionable intelligence right there.
4. Procurement Purchase Orders and Cost Reduction Dashboard
The Procurement Purchase Orders and Cost Reduction Dashboard serves two main functions: managing purchase orders and targeting cost reduction.
On one side, it handles all the information related to your purchase orders, including their status, conditions, and associated suppliers. It organizes this data, making it easy to access and review at a moment's notice.
On the cost reduction front, the dashboard offers analytics that can lead to meaningful savings. It assesses the costs associated with each supplier and purchase order, presenting them in an easily digestible format. This enables you to see where you can negotiate better deals or find more cost-effective alternatives.
What stands out is its ability to merge these two functionalities effectively. This can be particularly useful for identifying trends or inconsistencies affecting your bottom line adversely.
See it in action: Revolutionize Your Procurement Experience! Dive into Live Dashboards
Conclusion
You are now convinced that procurement dashboards are your north star for the success of your procurement process. We have sifted the actionable insights from procurement dashboards, making your data-driven decision-making faster and smarter.
Best of all, crafting these custom dashboards is a breeze with Databrain. You're essentially turning what could be a months-long project into a day's work. It is time to take the plunge and optimize your procurement processes.
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Recommended Read:
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- How to Create Dashboard in React
- How to Create Dashboard in Angular
- Complete Guide to Contract Management KPIs
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