5. Procurement Activities Measurement

The idea to assess and evaluate project procurement activities should be realized in order to get a clear insight into current progress of product development and delivery. A set of metrics can be used for procurement activities evaluating in order to ensure current project stays on schedule considering procurement activities. Also, they can be used to collect information on performance of various vendors so that the purchasing department can use such information to develop criteria for future vendor selection activities.

Usually the purchasing department has its own system of procurement activity metrics that are used on a regular basis. However, in case of non-typical procurements within a project, the existing system can be insufficient or inapplicable. The following procurement activity metrics are established for better measuring vendor performance and procurement activities:

  • Cost per product
  • Quality of delivered product
  • On time delivery
  • Quality of product documentation
  • Development costs
  • Development time
  • Transactional efficiency

All the listed metrics can get the following actual values: Unsatisfactory, Acceptable and Exceptional. The purchase management department can use the values of the metrics to create vendors rating tables and build a past-performance database in order to get a foundation for selecting vendors for future procurement activities.