Number of FTEs that perform the process "develop sourcing strategies" per $1 billion revenue

This measure calculates the number of full-time equivalent employees (FTEs) per $1 billion revenue who perform the "develop sourcing strategies" process, which involves clarifying purchasing requirements, matching needs to supplier capabilities, analyzing a company's spend profile to identify high-opportunity categories, matching the most effective sourcing strategy by category, seeking opportunities to improve efficiency and value, and collaborating with suppliers to identify sourcing strategies. It is part of a set of Process Efficiency measures that help companies optimize the performance of their "develop sourcing strategies" process by minimizing waste and refining resource consumption.

Benchmark Data

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Measure Category:
Process Efficiency
Measure ID:
101011
Total Sample Size:
4,373 All Companies
Performers:
25th Median 75th
- - -
Key Performance Indicator:
No

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Compute this Measure

Units for this measure are FTEs.

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(Number of FTEs who perform the process group "procure materials and services" * Percentage of process group "procure materials and services" FTEs who perform the process "develop sourcing strategies" * .01) / (Total business entity revenue * .000000001)

Key Terms

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Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

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.

Measure Scope

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Cross Industry (7.3.1)

  • 4.2.1.1 - Develop procurement plan (10281)
  • 4.2.1.2 - Clarify purchasing requirements (10282)
  • 4.2.1.3 - Establish materials management contingency plans (10283)
  • 4.2.1.4 - Match needs to supply capabilities (10284)
  • 4.2.1.5 - Analyze organization’s spend profile (10285)
  • 4.2.1.6 - Seek opportunities to improve efficiency and value (10286)
  • 4.2.1.7 - Collaborate with suppliers to identify sourcing opportunities (10287)