What is meant by Balanced Scorecard an Procurement Scorecard?

Purchasing controlling or procurement performance management and the corporate or departmental objectives defined on a (balanced) scorecard are closely linked. As described in glossary terms SRM, procurement performance management and purchase controlling, planning processes and a control circuit must be implemented.

Management defines the corporate goals using a scorecard and breaks these down into individual sections and management areas. Standards in form of area specific key figures and KPIs are derived from higher-level financial key figures such as EBIT pr Cash-Flow. The procurement scorecard in strategic purchasing contains KPIs and key figures with which purchasing can be managed and its success can be measured. Examples for KPIs and key figures in purchasing can be found in the glossary under “KPI”.

Together with a balanced scorecard, procurement controlling serves two different purposes. On the one hand, parts of the procurement scorecard or the supplier scorecards are implemented. On the other hand, target achievements can be measured (see glossary for the terms performance measurement, purchasing successes and cost savings).

In addition to purchase controlling, the implementation of measure management used to achieve the scorecard objectives. Using procurement measures and initiatives, the planned objectives are to be operationalized and implemented via very tangible purchasing projects. Measure management thereby functions as a tool to implement the scorecard in practice.

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