Supply Chain & Procurement worked example

Procurement Savings Rate at 9.2% board-committed savings target: a worked example

What does the result look like when board-committed savings target reaches 9.2%? The full calculation is worked below with real intermediate numbers. Use it to track procurement savings rate against target in Supply Chain & Procurement.

The inputs for this scenario

  • Negotiated savings captured this period: 90,000 $ (unchanged)
  • Baseline addressable spend: 1,200,000 $ (unchanged)
  • Board-committed savings target: 9.2 % (raised for this scenario; the documented default is 8)

Working through the calculation

  • Applying the documented formula (Procurement savings rate = savings achieved ÷ baseline spend × 100) to the inputs above produces each figure below.
  • At this operating point the engine returns 7.5 % for procurement savings rate, the number this scenario is built around.
  • At this operating point the engine returns 1.7 points for gap to target.
  • At this operating point the engine returns 90,000 count for savings achieved.
  • At this operating point the engine returns 1,200,000 count for baseline spend.

How this compares with the baseline

  • Against the tool's baseline example, where board-committed savings target sits at 8% and the headline result is 7.5 %, this scenario lands almost exactly on the baseline at 7.5 %.
  • A figure at this level is achievable when board-committed savings target is genuinely sustained, not just peaked for a shift. It treats 'savings achieved' at face value; cost avoidance, spec changes, and one-time rebates can inflate the number if your savings methodology isn't audited against actual paid prices.

Results at a glance

  • Procurement savings rate: 7.5 % (headline result)
  • Gap to target: 1.7 points
  • Savings achieved: 90,000 count
  • Baseline spend: 1,200,000 count

Run it with your numbers

  • Every input above is editable in the live Procurement Savings Rate calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.