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What Metrics Should You Include in Your Procurement Dashboards?
Procurement is not an easy balancing act. Without the right parts on hand, planes are grounded and you lose customer trust. If you have too much inventory, it can grow stale or obsolescent. In fact, wasted inventory costs airlines $10 billion a year. And that's before you factor in the headache of storage and maintenance, insurance, and waste removal fees.
For the aviation industry, efficient procurement processes are especially vital as companies face volatile demand, persistent shortages in commodity materials, workforce challenges (with a skills gap between demand and available talent, along with an aging workforce), and weaker supply chains.
Aerospace suppliers struggle to keep up with other industries, like automotive, in terms of financial stability and the sophistication of their procurement processes. An in-depth study by McKinsey & Company puts the skills gap at 15%—the aviation industry trails other industries by 15% in terms of procurement efficiency.
Adopting the right digital tools can be a game-changer. A well-designed procurement dashboard provides real-time insights into procurement activities, enabling smart decisions based on proactive, real-time data.
Below, we explore the essential raw data and metrics to include in your procurement dashboards and its impact on aviation supply chains. We also guide you on how to set up and integrate these dashboards with your existing OMS (Order Management System) or ERP (Enterprise Resource Planning) system.
What is a procurement dashboard?
A procurement dashboard is a visual tool that measures the performance of all procurement-related activities. Key performance indicators (KPIs) and other metrics are displayed, often alongside targeted performance goals for easy benchmarking.
This centralized view of procurement KPIs gives all stakeholders access to the same data for faster workflow optimizations, strategy pivots, and other rapid decision-making.
Within the aviation sector, with intense regulatory challenges and inefficient procurement workflows, this data view is vital. Procurement KPIs track, measure, and score cash flow management, supplier performance, contract management, material availability, supply chain risk indicators, and other internal processes.
With a full view of these activities in real-time, procurement departments can mitigate the most complex of supply chain challenges.
Financial Performance Metrics
These key metrics track cost efficiency and ensure alignment with financial goals:
- Cost savings: Measures reductions in procurement expenses through strategies like bulk purchasing or alternative sourcing.
- Procurement ROI: Evaluates the financial return of procurement activities relative to their costs.
- Cash flow impact: Tracks how procurement activities affect liquidity, including payment schedules and working capital.
- Total cost of ownership (TCO): Examines the direct and indirect costs of a product throughout its lifecycle, providing a clearer view of value.
- Budget variance: Measures discrepancies between budgeted and actual procurement expenses to improve forecasting accuracy.
Supplier performance metrics
Monitoring supplier reliability and quality ensures smooth operations:
- Supplier lead time: Tracks delivery times and reduces inventory holding costs.
- On-time delivery rate: Measures the percentage of orders delivered on or before the agreed date.
- Supplier availability: Evaluates supplier reliability in fulfilling orders as requested.
- Supplier defect rate: Monitors the percentage of defective orders, prioritizing quality and safety.
- Supplier innovation contributions: Tracks cost-saving ideas or process improvements suggested by suppliers.
- Supplier capacity utilization: Analyzes whether suppliers can meet your production or procurement demands during peak periods.
Operational efficiency metrics
These metrics assess the speed and efficiency of procurement processes:
- Purchase order cycle time: Measures the time taken to complete purchase orders.
- Procure-to-pay automation rate: Evaluates the percentage of procurement processes automated through digital tools.
- Procurement forecast accuracy: Compares predicted procurement needs with actual orders to reduce excess or shortages.
- Inventory turnover rate: Tracks how often inventory is used or sold, minimizing obsolescence and carrying costs.
- Requisition-to-order ratio: Evaluates how many requisitions result in successful orders, shedding light on approval bottlenecks.
- Backorder rate: Tracks the percentage of orders delayed due to unavailable stock, providing insights into supply chain reliability.
Risk and compliance metrics
Key for mitigating supply chain risks and meeting regulatory requirements:
- Supply chain risk index: Aggregates factors like geopolitical risks and supplier stability into a comprehensive risk score.
- Compliance with regulatory standards: Tracks adherence to aviation industry regulations to avoid penalties or disruptions.
- Contract compliance rate: Measures supplier adherence to agreed contract terms.
- Emergency purchase ratio: Monitors the frequency of unplanned purchases, indicating procurement planning effectiveness.
- Cybersecurity compliance rate: Evaluates how well procurement systems align with industry standards to prevent data breaches.
Strategic and sustainability metrics
Metrics that align procurement strategies with broader organizational goals:
- Spend under management: Indicates the percentage of procurement spend managed through formal processes.
- Market purchase price variance: Assesses how closely procurement costs align with market prices.
- Sustainability compliance rate: Tracks adherence to ESG (Environmental, Social, and Governance) criteria in procurement activities.
- Supplier diversity metrics: Tracks spending allocated to diverse suppliers, reducing supply chain risk while supporting corporate responsibility goals.
- Green procurement ratio: Monitors the percentage of environmentally sustainable products and services in procurement activities.
- Carbon footprint impact: Measures the emissions associated with procurement activities to help meet sustainability goals.
How to prioritize metrics in your dashboard
Start with metrics that directly impact operational efficiency and financial performance, such as cost savings, supplier lead time, and MRO inventory turnover rate.
Once foundational metrics are in place, integrate strategic metrics like sustainability compliance and supplier diversity to align procurement operations with long-term goals.
How to set up and integrate a procurement dashboard with your OMS or ERP
An effective procurement dashboard should integrate seamlessly with your other business systems to deliver real-time, actionable insights.
Here is a high-level overview of the steps that go into setting up a procurement performance dashboard.
1. Define objectives and scope
Identify the key goals of the dashboard, such as reducing costs, managing risks, or improving supplier performance. For aviation, you may want to prioritize objectives like minimizing downtime from part shortages.
2. Select the right metrics
Choose metrics that align with your objectives by referring to the comprehensive list of KPIs provided in the previous section. This ensures your dashboard is tailored to meet your organization’s specific goals, whether focused on financial performance, supplier reliability, or risk management.
3. Choose a platform
ePlaneAI is the ideal choice for aviation procurement dashboards because it acts as a central aggregation point for data from multiple sources, seamlessly integrating with ERP systems like Quantum or SAP.
ePlaneAI’s powerful capabilities go beyond simple data display—ePlaneAI consolidates, processes, and analyzes data that might not otherwise be compared, drawing inferences and providing actionable insights. Mashing up data from diverse sources and applying advanced analytics, ePlaneAI transforms raw data into real-time, meaningful dashboards that empower smarter decisions across inventory, supplier performance, and procurement trends.
4. Integrate data sources
Use APIs or Web Services to connect your dashboard with ERP, OMS, or other tools. ePlaneAI integrates with all the popular aviation ERP and OM systems, enabling accurate, real-time data consolidation, to drive new insights and real-time decision-making capabilities.
5. Customize visualizations
Design intuitive dashboards with visualizations like heatmaps for supplier risks or trend graphs for spending analysis. Customize views to meet precise business needs. Executives may need only a high-level overview, while your procurement team may require detailed insights.
6. Automate processes
Automate RFQ management, purchase orders, and inventory updates directly through ePlaneAI. Leverage its AI/ML capabilities to predict demand patterns and flag procurement anomalies before they become costly.
7. Monitor and optimize
Regularly evaluate your dashboard’s performance, refining metrics and visualizations as needed. ePlaneAI’s advanced analytics help aviation teams adapt and pivot to evolving challenges while maintaining overall operational efficiency.
8. Train your team
Equip your team with the skills to navigate and act on dashboard insights. ePlaneAI offers user-friendly tools that minimize the learning curve and empower teams to act on valuable insights into the procurement process from day one.
Tailor your procurement dashboards to work for you
For aviation companies, a well-designed procurement KPI dashboard is your command center for cost savings and more efficient spending and resource allocation.
When you build a procurement dashboard that zeroes in on the metrics that matter most, your teams can make smarter, more proactive decisions for improved supplier management and cost savings. The right dashboard tracking the right metrics can strengthen your entire supply chain, ensuring regular updates and refinements for smooth sailing amid business turbulence ahead.
Your supply chain doesn’t wait—and neither should you. ePlaneAI delivers the AI tools to turn chaos into clarity and complexity into control. Integrate now, and put precision back into your procurement.
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Data Engineering and Preparation for Inventory AI
Effective Inventory AI starts with a robust data pipeline. All relevant data from enterprise systems and external sources must be aggregated, cleaned, and transformed for AI consumption. This includes inventory data (historical sales, current stock levels, part attributes) and demand drivers (market trends, maintenance schedules, promotions, etc.) . By integrating internal ERP records with external factors (e.g. industry trends or seasonal patterns), the model gains a comprehensive view of demand influencers . Key steps in the data pipeline typically include:
- Data Extraction & Integration: Pull data from ERP systems (e.g. SAP, Oracle, Quantum) and other sources (supplier databases, market feeds). The platform supports automated connectors to various aviation systems, ensuring smooth data inflow . For example, historical usage, lead times, and open orders are merged with external data like global fleet utilization or macroeconomic indicators.
- Data Transformation & Cleaning: Once ingested, data is cleaned and standardized. This involves handling missing values, normalizing units (e.g. flight hours, cycles), and structuring data into meaningful features. Custom transformations and data warehouse automation may be applied to prepare AI-ready datasets. The goal is to create a unified data model that captures the state of inventory (on-hand quantities, locations, costs) and contextual variables (e.g. demand covariates, vendor lead times).
- Data Loading into the Cloud: The prepared data is loaded into a scalable cloud data platform. In our architecture, Snowflake is used as the central cloud data warehouse, which can ingest batch or real-time streams and handle large volumes of transactional data. Snowflake’s instant elasticity allows scaling storage and compute on-demand, so even massive ERP datasets and forecasting features are processed efficiently . This cloud-based repository serves as the single source of truth for all downstream analytics and machine learning.
- Business-Specific Fine-Tuning: A crucial preparation step is aligning the data and model parameters with each aviation business’s nuances. Every airline or MRO may have unique consumption patterns, lead-time constraints, and service level targets. The Inventory AI system “fine-tunes” its models to the client’s historical data and business rules, effectively learning the organization’s demand rhythms and inventory policies. This could involve calibrating forecasting models with a subset of the company’s data or adjusting optimization constraints (like minimum stocking levels for critical AOG parts). By tailoring the AI to the business, the predictions and recommendations become far more accurate and relevant to that client’s operations.
Continuous Data Updates: Inventory AI is not a one-off analysis – it continuously learns. Data pipelines are scheduled to update frequently (e.g. daily or hourly), feeding new transactions (sales, shipments, RFQs, etc.) into the model. This ensures the AI always bases decisions on the latest state of the inventory and demand. Automated data quality checks and monitoring are in place to catch anomalies in the input data, so that garbage data doesn’t lead to bad predictions. In summary, a solid foundation of integrated, clean data in the cloud enables the AI models to perform optimally and adapt to changes over time.
