Personnel cost to perform the process "order materials and services" per $1,000 purchases

This measure calculates personnel cost per $1,000 purchases for planning, ordering, and executing the physical delivery of materials and services from suppliers to the points of need and use. Personnel cost refers to employee salaries/wages, bonuses, benefits, etc. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "order materials and services."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
102979
Total Sample Size:
1,895 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
No

Compute this Measure

Units for this measure are dollars.

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Personnel cost to perform the process "order materials and services" / (Value of all materials and services purchased * .001)

Key Terms

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Personnel Cost

Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.

Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.

Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Measure Scope

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Cross Industry (7.2.1)

  • 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/Track vendor 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.