Operative buyer internal KPI

KPI – Control of Open Purchase Orders (KPI Overdue POs)

KPI Focus

This KPI measures whether the operative buyer has control over the open order book.

Specifically, it identifies:

  • POs (or PO line items) that remain open
  • with a delivery date in the past
  • without corrective action taken

This KPI answers the question:

“Do we actively manage and clean our open Purchase Orders?”

Why This KPI Is Critical

An open PO with a past delivery date means:

  • the system shows a commitment that is no longer valid
  • planning and inventory data become unreliable
  • expediting becomes reactive instead of proactive
  • trust in procurement data erodes across the organization

In professional operational purchasing:

Any PO with a delivery date in the past must be explained, corrected, or closed.

KPI Definition – Overdue Open PO Lines (Level 1)

What the KPI measures

The KPI measures:

  • the number (or share) of open PO line items
  • where the confirmed delivery date is earlier than today
  • and the PO line is still open in the system

This KPI reflects control discipline, not supplier performance.

KPI Scope

  • Applies to:
    • all open PO line items
  • Managed by:
    • Operative buyer
  • Measurement frequency:
    • Weekly (recommended)
    • Monthly as minimum

Typical Reasons for Overdue Open POs

  • Supplier delivered partially (e.g. 398 of 400 units)
  • Delivery date passed without update
  • Delivery postponed but PO not rescheduled
  • Delivery cancelled but PO not closed
  • Missing goods receipt or administrative follow-up

These situations are normal — not managing them is the problem.

KPI Structure – Overdue PO Control

Step 1 – Identify Overdue PO Lines

  • PO line is:
    • open
    • delivery date < today
  • Extracted from ERP

Step 2 – Buyer Action Required

For each overdue PO line, the operative buyer must:

  • contact supplier or
  • validate internal receipt or
  • update delivery date or
  • close remaining quantity or
  • cancel PO line

KPI Measurement Options

Option A – Absolute Number

  • Number of overdue open PO lines
  • Used to:
    • identify workload
    • spot control issues quickly

Option B – Relative Share (%)

  • Overdue PO Rate (%) = (Overdue open PO lines / Total open PO lines) × 100

Recommended for:

  • trend analysis
  • management reporting

KPI Target (Example)

  • Overdue PO rate:
    • ≤ 2–3% of open PO lines
  • No overdue PO lines older than:
    • 30 days without action

Targets should reflect business reality, not perfection.

Data Source (KPI Database)

Typical sources:

  • ERP open PO report
  • Delivery date field
  • Open quantity field

This KPI:

  • is system-generated
  • requires no manual input
  • is highly reliable

Desired Effect of Measuring This KPI

The organization aims to:

  • maintain accurate planning data
  • ensure realistic delivery commitments
  • avoid hidden shortages or excess
  • reduce operational noise
  • strengthen trust in procurement data

What This KPI Does Not Measure

This KPI does not measure:

  • supplier delivery performance (OTIF)
  • reasons for late delivery
  • forecast accuracy

It strictly measures:

internal control of the open order book

A high number of overdue open POs typically indicates:

  • insufficient follow-up discipline
  • unclear ownership of open orders
  • reactive rather than proactive working style

A low number indicates:

  • strong operational control
  • structured daily routines
  • professional order book management

Future Development (Higher Maturity)

At higher maturity levels, this KPI can evolve to:

  • aging buckets (0–7, 8–30, >30 days overdue)
  • root cause classification
  • automated alerts and workflows

These are future development KPIs, not core requirements.

Summary

  • Overdue open POs are a loss of control signal
  • This KPI ensures:
    • clean order books
    • reliable data
    • proactive behavior
  • Managing partial deliveries and outdated dates is a core operative buyer responsibility

Use the tag KPI to find more information about procurement KPIs. Learn more about KPI generic defined by Wikipedia.

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