“If you can’t measure if, you can’t manage it.” This statement seems to have been around forever, but it still rings as true as ever. Six Sigma and other similar continuous-improvement methodologies have been applied successfully to process-oriented business functions, such as manufacturing. And that success has led to Six Sigma projects in other areas of business, including Purchasing and AP.
The foundation of Six Sigma, of course, is data. Data for measuring cycle times, defects (or in AP, discrepancies), and more. Even if your organization hasn’t embraced a formal methodology for continuous improvement, data remains the key to unlocking greater efficiency and lower costs in Purchasing and AP.
Do you have a consistent set of key metrics used to measure performance in Purchasing and AP? Do you compare these metrics against standard industry benchmarks? No? Don’t worry — outside of the Fortune 500, Purchasing & AP departments are highly inconsistent in their use of metrics. But the persistent trend is strongly toward a more metrics-driven approach to performance improvement in these important corporate functions.
If you want to learn more about developing key departmental metrics and benchmarking, Verian Technologies is hosting a best-practices webcast: “Measuring Purchasing & Payables Productivity.” Henry Ijams of PayStream Advisors will be a lead presenter, sharing his expertise in performance measurement and improvement. The webcast will be held November 27 at 2 p.m. EDT. Click here to register.
