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Procurement Cycle Time

Procurement Cycle Time refers to the total elapsed time from the initial identification of a need to the fulfillment of that need through receipt of goods or services. This key performance indicator measures the efficiency and responsiveness of the procurement function.

The procurement cycle typically includes these time components:

  • Requisition creation and approval time
  • Sourcing and supplier selection period
  • Purchase order creation and issuance time
  • Order acknowledgment and processing duration
  • Production or service preparation time
  • Shipping and delivery timeframe
  • Receipt and inspection period

Digital procurement platforms reduce cycle times by automating workflow steps, eliminating manual handoffs, providing real-time status visibility, and identifying bottlenecks through process mining and analytics capabilities.

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