Optimizing Airline Procurement: A KPI-Driven Approach to Enhancing Efficiency and Performance

The aviation industry, characterized by its dynamic operational landscape and stringent regulatory requirements, necessitates a robust and strategic approach to procurement. This study explores the pivotal role of Key Performance Indicators (KPIs) in optimizing procurement processes within airlines, aiming to enhance operational efficiency, achieve significant cost savings, and ensure alignment with strategic business objectives. Employing a mixed-methods research design, the study integrates qualitative insights from procurement professionals across various airlines with quantitative analysis of procurement performance data. The findings identify critical procurement KPIs-such as Total Procurement Savings, Supplier On-time Delivery Rate, Procurement Cycle Time, and Percentage of Electronic Procurement-and evaluate their impact on the procurement function's effectiveness. Results reveal that airlines leveraging these KPIs effectively can enhance operational agility, realize cost efficiencies, and align procurement activities with broader organizational goals. The study concludes with actionable recommendations for Chief Procurement Officers and procurement teams to develop a comprehensive KPI framework, embrace digital transformation, foster strategic supplier relationships, integrate sustainability into procurement practices, and enhance risk management. These strategies are essential for airlines aiming to navigate today's market complexities and achieve sustainable competitive advantages.

Keywords:

Procurement , Airlines , Key Performance Indicators , Operational Efficiency , Strategic Alignment , Cost Savings