The Benefits Of Hiring A Professional Procurement Manager

A procurement manager is responsible for purchasing all the products and services that an organisation needs to operate efficiently. However, professionally-trained procurement managers do more than just purchasing. There are many other steps before and after the procurement process that require a procurement manager’s expertise. The main goal of a procurement manager is to reduce costs and maximise savings when purchasing for the company, and this necessitates good financial acumen and the ability to negotiate well. In his/her line of work, the procurement manager will meet with many of the company’s internal and external stakeholders to understand their requirements, concerns and suggestions. As such, it’s also important for a procurement manager to have excellent communication skills and a pleasant disposition. With so many areas to cover in the area of procurement, a company would be well placed to hire a professional procurement manager that has the expertise and soft skills to manage the whole procurement operation, and the leadership qualities to helm the procurement team. In this article, we look at the benefits of hiring a professional procurement manager.

Long-term savings

When managing the purchasing for a company, the procurement manager is responsible for inking the best deals that will benefit the company financially. Products or services offered by suppliers tend to differ in terms of price, quality and value add, so it’s up to the procurement manager to examine, analyse and compare the offerings of all suppliers before deciding on the one that offers the best value for money. As procurement contracts with suppliers are usually long term, it’s important for the procurement manager to negotiate the terms and conditions well, so that it benefits both parties. Suppliers who offer the cheapest prices may not always be the best bets as there is always the question of quality and reliability. Having angry customers who are unhappy with the quality of the products they received is bad for business because the company will be forced to spend more money to placate these customers. The most recent example of this scenario involves Japanese car manufacturer Honda and their airbag supplier, Takata. The poor-quality airbags cost many individuals their lives, causing Honda to face many lawsuits from families claiming compensation. They have also had to recall their cars and replace the airbags of thousands of Honda cars. Therefore, the onus is on the procurement manager to separate the wheat from the chaff. Inking long-term contracts with reliable suppliers means that a significant sum of money will be saved in the long run, guaranteeing higher profits for the company.

 

A positive company profile

Apart from comparing product prices, a procurement manager is also responsible for assessing a supplier’s production processes and distribution capabilities. Most established companies today value environmentally-friendly and sustainable practices, and many have put in place corporate social responsibility programmes that seek to give back to the community. As consumers become more educated about preserving nature, many are choosing not to support global conglomerates that harm the environment and have poor corporate sustainability records. A good example would be companies with factories in third-world countries that exploit their workers by giving them low wages and forcing them to work long hours in less-than-savoury conditions. A recent incident involved fast fashion retailer H&M, whose factory in Bangladesh was razed by a fire as a result of poor safety standards, causing the deaths of 21 workers. Higher coverage on the dubious practices of various established companies have also further emphasised the importance of sustainable practices. Many companies in the oil & gas industry have received bad press for failing to employ sustainable practices and causing oil spills in the ocean. An ethical procurement manager will align his procurement practices with company ideals and give procurement contracts to suppliers who share the same principles on ethical and sustainable business practices. This raises the profile and approval ratings of the company, giving it more positive publicity and better business opportunities.

A well-managed procurement operation

You do not need any certification to become a procurement manager, but you do need to have several skills and a vast store of knowledge in the area of procurement and supply chain management. Besides have the soft skills to manage internal and external stakeholders effectively, procurement managers are also expected to have the technical skills to manage the entire procurement cycle and the various procurement processes involved in purchasing. Procurement managers should ideally have good business acumen and be able to develop the strategic direction of the procurement department. They also need to understand the whole procurement cycle in detail to be able to map out work processes and develop internal controls for purchasing procedures. A decent amount of IT savviness is also helpful as more companies turn to procurement software to fast track the procurement cycle. The ability to fully utilise the various functions of an eProcurement software will go a long way towards helping the procurement department improve on the company’s procurement processes, and update management on the performance of the company’s procurement operations. As the person who helms the procurement department, procurement managers are also responsible for coaching and mentoring the purchasing and supply chain staff. This leadership role requires active listening and people skills, as well as the ability to guide teams to excel in their respective roles. A procurement manager of high calibre will ensure that the procurement department lives up to the standards set by management, and propel the team towards success. A well-managed procurement operation keeps business processes running like clockwork, leading to higher revenues and a stronger business presence.

 

Hiring the correct procurement manager for you company could be the very best step you ever made! Bringing in his knowledge and expertise into your business for the best. For more related articles come on over to ThunderQuote today

 

ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.

 

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