What is the best performance measurement tool, to measure procurement productivity?

You should set up a KPI based of status of open PR and demand. Also you need to compare the prices using the historical data or market price research.

Considering cost avoidance and market price development

Now this needs a lot of explanation but in 2 words i would say the contract,

How to start the process to make a contract and how to end the contract.

Also planning is included and smart procuring 

 

There is a difference between productivity of sourcers and performance of procurement as function.

I measure my team's productivity in both qualitative and quantitative terms.

Quantity is easy, it's number of sourcing projects weighted by their complexity executed in an average number of days.

Quality is tricky and it is not just savings, it is overall resourcefulness, grit, communication, expectation management, internal user management, negotiation skills, problem solving, contract quality etc - for qualitative a manager really needs to take interest in his/ her team and how what they do and how.

Getting the quality out of a team while maintaining high turnover is the trick :)

Measuring purchasing performance is important, as the purchasing department plays an ever increasingly important role in the supply chain in an economic downturn.

A reduction in the cost of raw material and services can allow companies to competitively market the price of their finished goods in order to win business.  An obvious performance measure of the success of any purchasing department is the amount of money saved by the company.

 However, there are a number of performance measurements that businesses can use when they measure purchasing performance.  These include:

• Purchasing Efficiency
• Purchasing Effectiveness
• Purchasing Functionality
• Performance Measurements

If it's on the team level any tool that will help you recognize the efficiency of the team in attaining a lean cost level and if it's individual based any tool that will give you an idea about the best cost efficiency achieved by any of the individuals in a team. But depending on the business at hand you will need to select the required tool based on the business at hand, core concentration constrains on measuring productivity in procurement will depend mainly on cost of either the product, it's quality, the logistics cost, and the service cost or all of them. For example, look at your law firm,if you use papers for all the legal work you would need papers of quality and also delivery schedules that meet the deadline, therefore measurement metrics placed would concentrate more on procurement of efficient logistics vendors, supplier selection based on a balanced quality and pricing. I left out pricing before because it is the core aspect procurement professionals look to achieve efficiency in. But most procurement professionals do give the opinion that law firms tend to keep the logistics part ahead of the pricing. Well I guess I was of help. This is just my assessment of the matter. I guess you will have a better idea about what tools you will need after reading this and other posts...others have given far more information about the topic I hope you read through them also. My best wishes.

Number of wright recievied materials (prices - specs - quantities - date) copaiered to  total materials requesitions and proposed budget

 plus measure effeciency of procurement cycle 

You may inlcude time metics on how much does it take to process a procurement cycle. You may put also how was the quality measured through the process until the end.

Savings in negotiations as well could be a KPI to meaures.