Testing the EFQM model as a framework to measure a company’s procurement performance

Abstract

This paper aims at checking whether the European Foundation for Quality Management (EFQM) Business Excellence Model (BEM) can be used as a reference framework for designing a multi-objective performance measurement system (PMS) for the procurement function. The procurement function is becoming increasingly relevant in the achievement of strategic and economic objectives. Thus, understanding the level of maturity of the practices implemented and identifying improvement opportunities are crucial. In this regard, it is necessary for companies to design a multi-objective PMS suitable for understanding whether and to what extent the procurement process contributes to the achievement of corporate objectives. This paper tests the validity of the EFQM BEM for the design of such functional PMS, building on the assumption that the overall rationale of this model is consistent with the need to jointly monitor the drivers and the outcomes of the procurement department, through a multi-objective approach. Using a data set that reports data from 118 companies and that is based on an international survey, our empirical analysis shows that the relationships among the constructs of the EFQM BEM hold also in the procurement function and that this model can be used as a reference framework suitable for measuring and managing the performance of this organisational unit.