KPI Focus
This KPI measures how effectively the operative buyer manages changes to already issued and open Purchase Orders.
The KPI focuses on execution discipline and responsiveness, not on why changes occur.
Content…
Why Management of Open POs is a Core Operational KPI
In a dynamic supply chain, change is normal:
- production schedules shift
- customer demand changes
- priorities are rebalanced
What differentiates a professional operative buyer is not avoiding change, but:
- acting on changes quickly
- communicating clearly with suppliers
- keeping commitments, inventory, and plans aligned
Unmanaged open POs lead to:
- excess inventory
- missed deliveries
- frustrated suppliers
- loss of control over the order book
KPI Definition – Open PO Change Management (Level 1)
What the KPI measures
The KPI measures:
- the volume of change requests on open POs
- and whether these changes are executed and confirmed with the supplier
This KPI answers the question:
“Do we actively manage our open orders when reality changes?”
Types of PO Changes in Scope
The KPI includes:
- request for earlier delivery (always actioned)
- request for delayed delivery (inventory control)
- quantity changes
- PO cancellations
All changes must be:
- communicated to the supplier
- acknowledged by the supplier
KPI Structure – Change Request Execution
Step 1 – Change Identified
- Change triggered by:
- production rescheduling
- customer order changes
- inventory control decisions
- Change documented internally
Step 2 – Change Communicated
- Supplier informed of:
- requested new date, quantity, or cancellation
- Communication channel defined
- Timestamp available
Step 3 – Supplier Confirmation
- Supplier confirms:
- acceptance or rejection
- impact on delivery and capacity
- Confirmation documented
KPI Measurement – Two Core Views
KPI A: Number of PO Change Requests
- Measures:
- total number of rescheduling, quantity changes, and cancellations
- Used to:
- understand volatility
- identify upstream planning issues
- This is a diagnostic KPI, not a performance judgement
KPI B: Change Execution Rate (%)
- Change Execution Rate = (Confirmed PO changes / Total requested PO changes) × 100
This KPI measures buyer execution quality.
KPI Target (Example)
- Change execution rate:
- ≥ 95% confirmed within agreed response time
- Earlier delivery requests:
- always actioned and escalated if rejected
Data Source (KPI Database)
Typical sources:
- ERP change logs
- PO revision history
- Supplier confirmations (portal / e-mail)
Evidence required:
- original PO
- change request
- supplier response
Desired Effect of Measuring This KPI
The organization aims to:
- maintain control of open order book
- avoid excess and obsolete inventory
- ensure suppliers plan based on latest reality
- reduce surprises and last-minute firefighting
- create transparency around demand volatility
What This KPI Does Not Measure
This KPI does not measure:
- forecast quality
- supplier flexibility
- commercial consequences of changes
These belong to:
- planning KPIs
- supplier performance KPIs
- tactical sourcing analysis
Link to Buyer Performance
A low execution rate indicates:
- delayed action by the operative buyer
- unclear ownership of open orders
- weak communication discipline
A high number of change requests may indicate:
- unstable planning upstream
- poor forecast quality
- lack of freeze periods
Future Development (Higher Maturity)
At higher maturity levels, this KPI can evolve to:
- average response time to change requests
- supplier acceptance rate of changes
- cost impact of PO changes
These are future development KPIs, not required at the foundational level.
Summary
- Managing open POs is a core control activity for operative buyers
- This KPI measures:
- responsiveness
- execution discipline
- communication quality
- The goal is not to eliminate change, but to manage it professionally
Use the tag KPI to find more information about procurement KPIs. Learn more about KPI generic defined by Wikipedia.