Companies are striving for operational efficiency and achieve cost savings through effective procurement strategies. Unavailability of perfect information along with the lack of expertise in specific fields is proving to be a barrier to increase cost saving opportunities through procurement. In the wake of such issues, companies are bringing in the expertise of marketing agency to streamline their procurement and improve its efficiency. The problem thus arises on how to assess the performance of the experts. It might be tricky to judge solely based on performance on the revenue front as it is affected by multiple factors. Here are some KPI’s that can measure the performance of such marketing agency.
Number of Purchase Order Revisions
Purchase order goes through numerous revisions before getting finalized, and a revision number is assigned instead of generating a new purchase order. Purchase order might have to be revised due to various reasons as:
- Incorrect quantity
- Damaged product
- Delayed arrival
- Arrival at wrong location
- Filled with incorrect details
- Invoicing or collection error
Too many revisions can indicate ineffectiveness of marketing agency to either choose the right vendor or provide correct information. It can alternatively be calculated as a percentage of perfect orders by multiplying the percentages of each criteria being met.
Agency Supplier Management
Marketing agency should facilitate organization to acquire all rights from sub-contractor and leave very little for the organization to do. This includes handling all the compliance issues, specifications communication, on-time delivery, benchmarking cost, and advising innovative solutions. Agency can be measured by the percentage of projects successfully completed with rights obtained.
Client Meeting to Approve Agency Recommendations
Marketing agency provides expertise in identifying suppliers and recommending them to the client. An agency’s performance could be figured out by the number of client meetings with the supplier in order to strike a deal. A frequent requirement for meetings could indicate that the recommendations were not good in the first place at all. A lower figure of this KPI is a good indicator of satisfactory agency performance.
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