Percentage of purchase order line items transacted using e-procurement enabled catalogue suppliers

This measure calculates the percentage of purchase order line items that were transacted via e-procurement enabled catalogue suppliers (i.e. those that use internet or EDI to restock maintenance, repair, and operations (MRO) supplies). A purchase order line item is a unique entry on a purchase order. For example, a purchase order for office furniture that includes two chairs, two desks, and one floor lamp would have three line items. This measure is part of a set of Process Efficiency measures that help companies optimize the performance of their "procure materials and services" process by minimizing waste and refining resource consumption.

Benchmark Data

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Measure Category:
Process Efficiency
Measure ID:
102422
Total Sample Size:
4,272 All Companies
Performers:
25th Median 75th
- 48.0% -
Key Performance Indicator:
No
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Units for this measure are percent.

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Percentage of purchase order line items transacted using e-procurement enabled catalogue suppliers

Key Terms

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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 (8.0)

  • 4.2.1 - Provide sourcing governance (10277) - Creating strategies for procuring materials and services from various sources, and for managing and evaluating categories. Establish a procurement process that describes the approach for obtaining products and purchasing activities. Evaluate the sources. Create sourcing relationships in order to continuously improve. Re-evaluate purchasing activities.
    • 4.2.1.1 - Develop procurement plan (10281) - Creating a plan for procuring materials and services. Plan what to buy, when, and from what sources. Include project requirements, the procurement team, the justification for the procurement, a timeline of events, and an explanation of the supplier selection process. Outline specific actions to start and complete purchases in order to adhere to best practices.
    • 4.2.1.2 - Clarify purchasing requirements (10282) - Defining the purchasing requirements for materials and services. Specify the exact inventory required for the production process. Create a specific quotation for all the sources in order to avoid any duplication or overlap.
    • 4.2.1.3 - Establish materials management contingency plans (10283) - Developing a strategy to deal with issues projected to arise during implementation of the inventory plan. Identify how to react to issues that arise and require changes to the inventory plan, such as a vendor failing to deliver materials on time. Collaborate with production and suppliers to prepare solutions to projected problems.
    • 4.2.1.4 - Match needs to supply capabilities (10284) - Synchronizing the requirements of materials and services and the capacity of suppliers for providing these materials and services. Revamp the procurement needs of the company in consideration of the capabilities of the suppliers.
    • 4.2.1.5 - Analyze organization’s spend profile (10285) - Evaluating the spend profile of the organization. Collect, cleanse, classify, and analyze the procurement data with the purpose of reducing procurement costs, improving efficiency, and monitoring compliance.
    • 4.2.1.6 - Seek opportunities to improve efficiency and value (10286) - Seeking the most efficient sourcing and procurement opportunities.
    • 4.2.1.7 - Collaborate with suppliers to align with long term business goals (21616) - Collaborating with the suppliers of materials and services in order to determine new opportunities for sourcing, share market insights, manage risk, identify and align supplier capabilities with long-term business goals.
    • 4.2.1.8 - Collaborate with suppliers to identify sourcing opportunities (10287) - Collaborating with the suppliers of materials and services in order to determine new opportunities for sourcing.
  • 4.2.2 - Develop category plan (16636) - Defining sourcing strategies and plans for categories of materials or services to optimize cost, supply continuity, value, and alignment with organizational requirements and market conditions.
    • 4.2.2.1 - Analyze category/product positioning and performance (11470) - Analyzing the position and performance of sourcing categories or products based on spend, supplier dynamics, market conditions, and value contribution to inform category planning decisions.
    • 4.2.2.2 - Forecast demand for each category by market (16637) - Forecasting demand for sourcing categories across relevant markets or consumption channels to support planning, supplier strategy, and capacity alignment.
    • 4.2.2.3 - Assign revenue and margin targets to each category (16638) - Establishing revenue, cost, and margin targets for sourcing categories to guide category strategy, sourcing decisions, and performance evaluation.
  • 4.2.3 - Select suppliers and develop/maintain contracts (10278) - Evaluating supplier options to select the most effective and efficient suppliers. Validate selected suppliers. Establish and manage supplier contracts.
    • 4.2.3.1 - Select suppliers (10288) - Evaluating the pros and cons of various suppliers. Choose the most appropriate and cost-effective suppliers on the basis of their material quality, delivery schedules, and costs.
    • 4.2.3.2 - Certify and validate suppliers (10289) - Validating the supply sources, and provide certification as an official supplier.
    • 4.2.3.3 - Negotiate and establish contracts (10290) - Legally binding suppliers with the company. Negotiate contracts individually with all the suppliers that include the promised material delivery, the delivery dates and duration, etc.
    • 4.2.3.4 - Manage contracts (10291) - Keeping contracts up-to-date with routine evaluation. Maintain order and discipline with the contracts in order to avoid any loss of information and mishaps.
  • 4.2.4 - Order materials and services (10279) - Creating and approving requisitions and distributing purchase orders accordingly. Hasten the procurement process to satisfy internal needs.
    • 4.2.4.1 - Process/Review requisitions (10292) - Handling operations related to processing/reviewing the requisitions. Establish and maintain procedures for the initiation, authorization, and processing of purchase requirements to procure products/services.
    • 4.2.4.2 - Approve requisitions (10293) - Approving requisitions for materials and services. Examine distributor-specific requests, and validate them individually.
    • 4.2.4.3 - Solicit supplier quotes (10294) - Requesting quotes from suppliers. Use a request for quotation (RFQ) to invite suppliers into a bidding process for specific products/services.
    • 4.2.4.4 - Create/Distribute purchase orders (10295) - Creating and placing the orders for purchasing materials and services from suppliers. Analyze vendor quotes. Choose the most cost-effective vendors. Create vendor-specific orders. Distribute them in order to initiate the purchasing process.
    • 4.2.4.5 - Expedite orders and satisfy inquiries (10296) - Accelerating the purchase orders in order to fulfill the internal needs (for raw materials) depicted through inquiries.
    • 4.2.4.6 - Reconcile purchase orders (10297) - Verify that purchase orders are filled as expected: verify that items and quantities are delivered as expected, based on purchase order details and goods receipts.
    • 4.2.4.7 - Research/Resolve order exceptions (10298) - Identifying and resolving any exceptions. Address the internal needs/inquiries for materials that cannot be procured immediately. Research inquiries that require the need of exceptional materials.
  • 4.2.5 - Manage suppliers (10280) - Collecting and analyzing new information in order to track and rate suppliers and build relationships.
    • 4.2.5.1 - Monitor/Manage supplier information (10299) - Create and maintain vendor master files. Examining procurement and vendor performance. Report delivery timing and the quality of the materials procured through different vendors. This data must align with vendor master file, see PCFID 10869.
    • 4.2.5.2 - Prepare/Analyze procurement and supplier performance (10300) - Assisting the production and inventory processes through the information and reports created. Use the information and metrics of the procurement and vendor performance to enhance or improve the production process.
    • 4.2.5.3 - Support inventory and production processes (10301) - Support inventory and production processes by analyzing impact of procurement decisions and collaborating to constantly improve. (For example, perhaps minimum order requirements could be negotiated to be lower, to reduce excessive inventory and make production more flexible.)
    • 4.2.5.4 - Monitor quality of product delivered (10302) - Track the performance of the suppliers on product quality. Use this information to further improve sourcing and supplier performance.