Are your supplier KPIs truly aligned with business outcomes?

Up to 49% of a supplier’s performance can break down when KPIs aren’t tied to business objectives. (Source: APQC, Benchmarks 2024)

Today, CPOs and COOs need KPIs that translate performance into savings, uptime, and risk reduction, not “vanity” metrics.

Here are a few checkpoints to validate whether your KPIs actually create value:

·      Map each KPI to a business OKR.

·      Remove indicators with no direct impact (e.g., “number of emails answered”).

·      Include should-cost (technical estimate of the expected cost) to measure real efficiency.

·      Update contracts to convert KPIs into measurable obligations.

·      Review quarterly variances and root causes with suppliers.

In Procurement, measuring “compliance” isn’t enough: KPIs must translate into EBITDA, cash, and operational continuity. If your scorecard doesn’t move those three levers, you’re managing activity, not value.

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