This measure calculates the percentage of procurement process group full-time equivalent employees (FTEs) who perform the "develop sourcing strategies" process, which involves clarifying purchasing requirements, matching needs to supplier capabilities, analyzing a company's estimated and scheduled spends, identifying high-opportunity categories, matching categorized effective sourcing strategy, seeking opportunities to improve efficiency and value, and collaborating with suppliers to identify sourcing strategies. This Supplemental Information measure is intended to help companies evaluate additional variables related to the process "Develop sourcing strategies".
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Percentage of FTEs performing procurement processes dedicated to providing sourcing governance and performing category management
FTE - (full-time equivalent employee)
To calculate the number of full-time equivalents employed during the year for each respective process or activity, you must prorate the number of employees and the hours spent performing each process/activity. Assume that a full-time worker represents 40 hours per week. Provide the average number of full-time equivalents employed during the year for each respective process. Include full-time employees, part-time employees, and temporary workers hired during peak demand periods. Allocate only the portion of the employee's time that relates to or supports the activities identified for an applicable process. Prorate management and secretarial time by estimating the level of effort in support of each activity, by process.
For example, a part-time secretary in the finance department for XYZ, Inc. charges all of his time to finance department activities. He works 20 hours per week. The secretary splits his time evenly supporting employees working in the general accounting process and the financial reporting process. Thus, his time should be allocated by process. So, if he works throughout the year and supports these two processes, his time would be split evenly as:
20hrs/40hrs = .5FTE * 50% for general accounting = .25FTE for general accounting
20hrs/40hrs = .5FTE * 50% for financial reporting = .25FTE for financial reporting
Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.