A procurement manager is a mid to senior-level management position designated to ensure a company and its employees adhere to the organizations purchasing strategy. The procurement manager’s responsibility is to find new suppliers, manage vendor relationships, run various sourcing activities, and negotiate terms and conditions. This approach will help maintain consistency around the clock and keep costs within a budget. In larger companies, the procurement manager’s responsibilities mainly involve strategic activities, while in small companies their role may include some operational actives. It is said that everything before sending out purchase orders is under the procurement manager’s responsibilities. As a general practice, the procurement manager also oversees purchasing, making purchasing a subset of procurement.
The Primary Responsibilities of a Procurement Manager are:
- Hire, train and manage new procurement staff
- Develop and implement an organization’s procurement policies and procedures
- Negotiate and build supplier contracts
- Data analysis
- Monitor suppliers to ensure that they accept contract terms and conditions
- RFP management
- Discuss faulty or low-quality goods with suppliers and negotiate remedial action
- Attend industry meetings like trade shows and conferences to make new supplier contacts, develop new relationships, and remain informed of the latest developments
- ROI analysis
- Work closely with the accounting department to ensure that the company pays suppliers
Procurement Manager Requirements
A combination of education, training, skills, and certifications will help you achieve a procurement manager position.
Procurement managers originate from various backgrounds, and typically they hold bachelor’s degrees in different fields. These could include procurement management, business, economics, supply chain management, and logistics. Some of them may also have a Master’s Degree in procurement management.
Procurement managers need to work closely with procurement staff, senior management, accounting staff, and end users other pertinent internal stakeholders to coordinate organizational process. In addition, a procurement manager needs to have strong communication and interpersonal skills. However, a procurement manager requires other significant skills like:
- Financial skills: A procurement manager should be aware of departmental budgets and procurement costs at every instance. These professionals should be skilled at managing budgets and interpreting financial statements.
- Analytical skills: A procurement manager should evaluate suppliers considering various factors, including price, quality, delivery, and service.
- Leadership skills: A procurement manager must be able to direct team members to complete procurement processes effectively.
- Negotiating skills: Purchasing managers need to be skilled enough to acquire the best prices from suppliers. To do so, they should know about the products in question and global market trends.
How to Become a Procurement Manager
Procurement manager professionals come from very different professional backgrounds, including engineering, finance, economics, and logistics. If you are planning to pursue this career, these are the few steps you need to consider:
Obtain a bachelor’s degree: Employers are expecting a bachelor’s degree as an entry-level requirement for most positions. Although a bachelor’s degree is not a mandatory requirement, it will strengthen your qualifications against other candidates.
Work your way up: You will need a few years of experience in purchasing before employers consider your application. To gain experience in this field, you could opt for a junior procurement position, such as a procurement officer.
Find a mentor: The best way to gain knowledge in any field is through mentor guidance. If possible, ask someone who has a more senior position if they will be willing to train you on the job. In return for sharing their knowledge, you could reciprocate by volunteering to assist with some of their tasks.
Get certified: Professional certification is a great way to identify yourself from professional competitors. There are many certification programs available in the field of procurement, such as a Certified Purchasing Professional qualification or a Certificated Supply Chain Professional qualification.
Attend industry/trade events: If you want to improve your career in procurement, you should stay up to date with the latest trends, products, services, and technologies, and extend your professional network by attending trade shows, meetings and conferences.
Usually, a procurement manager occupies a full-time position and works a 40-hour week. Apart from meeting suppliers and attending trade shows and conferences, the job is primarily office-bound. Procurement managers work in various business sectors and industries. However, procurement managers are most likely to find a job in these sectors and industries:
- Acute healthcare
- Post-Acute healthcare
- Local governmental departments
- Management of companies and corporate enterprises
- Aerospace parts manufacturing
- Federal executive branches
- Merchant wholesalers
- The average salary in the U.S.: $83,586 per year
- A Procurement Manager salary ranges from $25,000 to $176,000 per year.
Challenges for a Procurement Manager
Rogue Spend and Lack of Business Engagement: Rogue spend, also known as dark purchasing, tail spend, invisible spend, unmanaged spend, or maverick spend, is any purchase made outside the procurement process. According to a 2016 report from Hackett Group, about 29 percent of indirect spend is rogue spend or off-contract. These are difficult to account for and open the business up to risk.
Time-Consuming Processes Due to Lack of Technology: Even in companies where digital transformation initiatives are widely adopted, technology seems to arrive slowly in the procurement department. Many functions may be completed manually and upper management’s investment in automation ca be limited in this department.
Strategic Sourcing and Supplier Selection: As companies begin to understand the value of the procurement department, the pressure on procurement managers rises. Unsurprisingly, strategic sourcing has gained popularity to help meet this challenge. The practice focuses on choosing long-term partners rather than transactional suppliers. Longer, more productive relationships with vendors mean fewer procurement projects and lower costs.
Selecting the right supplier isn’t the end of the procurement team’s tasks. Indeed, managing vendor relationships is an underappreciated and exceptional skill. A Procurement Manager continually manages and evaluates each vendor’s performance to ensure the partnership remains mutually beneficial. Fortunately, vendor profiles help in centralizing crucial vendor information for easy reference and tracking.
Certifications for a Procurement Manager
Certified Purchasing Professional certification
The CPP certification is regarded as the American Purchasing Society’s entry-level qualification. They accept candidates only with a minimum of two years of experience in procurement/purchasing. As a part of the evaluation process, the society contacts an applicant’s coworkers and suppliers for feedback on the applicant’s professional conduct.
This process allows the association to calculate the candidate’s maturity, ethics, and communication skills. After passing this step, a candidate must complete a three-week online course that ends with the Preparation for Certified Purchasing Professional Exam. Members of the society have to renew this qualification for every five years only, whereas non-members need to do so every two years.
Certified Professional Purchasing Manager certification
This certification is an American Purchasing Society qualification specifically for managerial staff. Applicants need to have CPP certification before they can apply for the CPPM certification. To earn this qualification, you need to take a three-week online course and pass the “Preparation for the Certified Professional Purchasing Manager Exam.” Similar to CPP certification, candidates need to update this qualification either every two or five years, depending on their membership status.
Professional Diploma in Procurement and Supply
The Chartered Institute of Procurement and Supply grants multiple procurement qualifications. Professional Diploma in Procurement and Supply is their high-level qualification and is aimed at senior procurement experts. You need to have an Advanced Diploma in Procurement and Supply to qualify for this qualification. The assessment comprises a three-hour written exam. The three core parts of this program are
- Leadership in Procurement & Supply,
- Corporate & Business Strategy, and
- Strategic Supply Chain Management.
To who does a Procurement Manager report?
Quite often, in service-led organizations, the Procurement Manager may serve as part of a finance team and report to a Head of Finance or Chief Finance Officer. In the logistical and manufacturing operations, the Procurement Manager may be more closely aligned to operations and report to an Operations Director.