How to calculate the value that Procurement adds to the organisation
This online calculator helps determine the value that Procurement adds to the organisation.
What is the effect of your procurement savings on the company’s operating profit? On earnings per share? What is the return on investment (ROI) on your proposed procurement transformation strategy?
This simple online tool will assist you in calculating key ratios that will assist other parts of the organisation in understanding the value that the procurement function adds. (and you can print out your results!)
to access the calculator click here
If a link does not open, right click on it and select “open in a new window”
What do you think about this article? You can air your views in the space provided below.
If you say R50,000,000 cost savings will contribute 12% in operating profit and you need $416,666,667 to achieve the same profit, don’t you have to consider the price of the product?
Maybe if I can get the formula then things will be clearer
Regards
Mluleki
This calculator refers to profit-making organizations ie; Private/ Public cos. What about organizations that are largely non-profit making but which have strong procurement depts? Eg. provincial development bodies, like Ithala Development Finance Corporation Limited & other similar organization. How can I calculate same benefits using this tool?
This calculator refers to profit-making organizations ie; Private/ Public cos. What about organizations that are largely non-profit making but which have strong procurement depts? Eg. provincial development bodies, like Ithala Development Finance Corporation Limited & other similar organizations. How can I calculate same benefits using this tool?