Procurement Glossary
Benchmarking in Procurement: Systematic performance comparison for optimal procurement
November 19, 2025
Benchmarking in Procurement is a systematic comparison process in which companies measure their procurement performance against industry-leading standards or competitors. This method makes it possible to identify potential for improvement and adopt best practices. Find out below what benchmarking in Procurement involves, which methods are used and how you can use key figures for management purposes.
Key Facts
- Systematic comparison of own purchasing performance with best-in-class companies
- Identification of potential cost savings and process improvements
- Use of quantitative and qualitative key figures to measure performance
- Continuous process for sustainable optimization of the procurement function
- Basis for strategic decisions and objectives in Procurement
Contents
Definition: Benchmarking in Procurement
Benchmarking in Procurement refers to the systematic comparison of a company's own procurement performance with external or internal reference values for continuous improvement.
Core elements of purchasing benchmarking
Benchmarking covers various dimensions of procurement performance:
- Cost comparisons and price analyses
- Process efficiency and throughput times
- Supplier performance and quality indicators
- Organizational structures and use of resources
Benchmarking vs. market analysis
While a market analysis primarily examines external market conditions, benchmarking focuses on the direct comparison of performance with other organizations. Market observation provides an important data basis for meaningful benchmarks.
Importance of benchmarking in Procurement
Benchmarking enables an objective assessment of purchasing performance and creates transparency regarding potential for improvement. It supports the procurement strategy through data-based decision-making and promotes a continuous optimization culture.
Methods and procedures
Successful benchmarking in Procurement requires structured procedures and suitable analysis methods for systematic performance evaluation.
Internal vs. external benchmarking
Internal benchmarking compares different business areas or locations within the company. External benchmarking uses industry data or direct comparisons with other companies. The purchasing organization determines the available comparison options.
Key figure-based analysis
Quantitative benchmarks are based on measurable key figures such as cost savings, process times or number of suppliers. Qualitative aspects include process maturity, use of technology and employee competencies. A Procurement competence matrix supports the qualitative assessment.
Continuous improvement process
Benchmarking follows a cyclical process: data collection, analysis, derivation of measures and performance review. Integration into the purchasing process ensures sustainable improvements and regular performance reviews.
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Key figures for controlling
Meaningful key figures form the basis for successful benchmarking and enable objective performance comparisons.
Cost ratios
Key cost metrics include purchasing volume per employee, cost savings and maverick buying rate. The capital commitment period and process costs complete the financial assessment of purchasing performance.
Efficiency and quality indicators
Throughput times, supplier evaluations and complaint rates measure operational excellence. Suppliers' ability to deliver and adherence to delivery dates are important quality indicators for benchmarking purposes.
Strategic performance indicators
Supplier concentration, innovation rate and risk diversification evaluate strategic procurement performance. The number of strategic partnerships and synergy effects between business units supplement the system of key figures for comprehensive benchmarks.
Risks, dependencies and countermeasures
Benchmarking projects involve specific risks that can be minimized by taking appropriate measures.
Data quality and comparability
Incomplete or non-comparable data leads to incorrect conclusions. Standardized definitions and data collection methods are essential. The standardization of key figures significantly improves comparability.
Strategic misinterpretation
Isolated analysis of key figures without context can lead to incorrect strategic decisions. A holistic analysis taking into account the procurement objectives is necessary.
Resource expenditure and ROI
Extensive benchmarking projects tie up considerable resources. A clear return on investment analysis and focused areas of analysis optimize the cost-benefit ratio. Regular performance measurement prevents inefficient allocation of resources.
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Practical example
A car manufacturer carries out a comprehensive benchmarking of its purchasing organization. The company compares its key figures with five industry leaders: purchasing volume per employee, cost savings and supplier performance. The analysis shows that the company's own maverick buying rate is 15% above the industry average. As a countermeasure, the company implemented a structured approval workflow and reduced the rate by 8% within six months.
- Systematic data collection from benchmark partners
- Identification of specific areas for improvement
- Derivation and implementation of targeted measures
Trends & developments around benchmarking in Procurement
Modern technologies and changing market conditions are shaping the further development of benchmarking approaches in procurement.
Digitalization and AI integration
Artificial intelligence is revolutionizing benchmarking through automated data analysis and pattern recognition. AI in Procurement enables real-time benchmarking and more precise comparative analyses. Digital procurement creates new data sources for comprehensive performance comparisons.
Supply chain transparency
Enhanced supply chain visibility enables more detailed benchmarks at supplier level. Supply Chain Visibility supports end-to-end comparisons and holistic performance assessments.
Sustainability benchmarking
Environmental and social criteria are becoming increasingly important as benchmark dimensions. The Supply Chain Act increases the focus on sustainable procurement practices and corresponding comparison metrics.
Conclusion
Benchmarking in Procurement is an indispensable tool for systematic performance optimization and strategic positioning. Through structured comparison with best-practice companies, organizations identify concrete potential for improvement and develop targeted measures. Digitalization opens up new opportunities for continuous, data-driven benchmarking. The selection of relevant key figures, ensuring data quality and the consistent implementation of derived optimization measures are crucial to success.
FAQ
What is the difference between internal and external benchmarking?
Internal benchmarking compares different areas or locations within your own company, while external benchmarking compares performance against other companies or industry standards. External benchmarking often provides more valuable insights, but requires more effort to collect data.
Which key figures are best suited for purchasing benchmarking?
Proven metrics include cost savings, purchasing volume per employee, supplier ratings, lead times and maverick buying rate. The selection should be based on the strategic objectives and take into account both quantitative and qualitative aspects.
How often should benchmarking be carried out?
Strategic benchmarking is typically carried out annually, while operational key figures can be compared on a quarterly or monthly basis. The frequency depends on the dynamics of the market, available resources and the importance of the respective key figures.
What are the challenges of benchmarking?
The main challenges are the availability of comparable data, different definitions of key figures and access to benchmark partners. In addition, cultural differences and different business models can limit comparability.
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