Performance Measurement is currently one of the most talked about topics in Purchasing and Supply Management (PSM) – in research as well as in business practice. However, it is not simply a business fad; researchers already introduced the Balanced Scorecard, a performance measurement method, to PSM a few years ago. A more novel idea in this context is measuring the budget impact of PSM – its financial effectiveness. In business practice, only 10-20% of supply management’s effectiveness can be identified retrospectively in the P&L account with current measurement methods. Thus, PSM is often criticised for only being able to demonstrate its efforts on presentation charts, so-called “powerpoint savings”. Therefore, researchers were requested to support practitioners in finding a solid and feasible solution to the problem of savings measurement. The derived solution measures PSM’s financial effectiveness by integrating the function in the budgeting procedure, based on the following hypothesis: Only when supply management addresses its planned savings potential already in the budgets, it can show its comprehensive bottom line effect.

Keywords

About the author

Dr. Anna Quitt was a research assistant at the Chair of Financial Supply Management of Prof. Dr. Michael Henke and obtained her doctoral degree at the European Business School EBS in Oestrich-Winkel.

Bibliographic Information

Book Title: Measuring Supply Management’s Budget Effects
Book Subtitle: Introduction of Return on Spend as an Indicator of Supply Management’s Financial Effectiveness
Authors: Anna Quitt
Series Title: Einkauf, Logistik und Supply Chain Management
DOI: https://doi.org/10.1007/978-3-8349-8490-6
Publisher: Gabler Verlag Wiesbaden
eBook Packages: Business and Economics, Business and Management (R0)
Copyright Information: Gabler Verlag | Springer Fachmedien Wiesbaden GmbH, Wiesbaden 2010
Softcover ISBN: 978-3-8349-2110-9Published: 27 January 2010
eBook ISBN: 978-3-8349-8490-6Published: 24 September 2010
Edition Number: 1
Number of Pages: XXIV, 250
Number of Illustrations: 66 b/w illustrations
Topics: Business Strategy/Leadership, Operations Management

Publish with us

Policies and ethics

Authors:

Sections

Buy it now

Buying options

Other ways to access

Table of contents (6 chapters)

Front Matter

Problem Set and Course of Investigation

Supply Management’s Financial Effectiveness – ‘The Story Behind it’

Measurement of Supply Management’s Bottom Line Impact: Status Quo and Future Requirements

Measurement Process Design: Measuring Supply Management’s Budget Effects – A Qualitative Approach

Process Implementation Design: Implementing Supply Management’s Return on Spend

All-Encompassing Final Statements

Back Matter

About this book