A key part of a procurement manager’s job is to drive cost-savings for the organisation, but there are many other facets to this role as well. A procurement manager ensures that the company takes a strategic approach to procurement by inking the best deals when purchasing goods and services, and develops good relationships with the company’s internal and external stakeholders. The role of a procurement manager is essential to a company’s success, so it’s imperative that the person hired is equipped to handle the many twists and turns of procurement operations. Here are some tips to help you along when hiring a procurement manager.
Look for a wide repertoire of skills
Having strong analytical skills helps a procurement manager review current procurement operations with a critical eye, and successfully lead the implementation of changes to improve current procurement processes. Being able to analyse procurement data and reports also helps when deciding on the relevancy of a purchase, or whether to retain the services of a supplier. According to Deloitte’s 2016 Global Chief Procurement Officer (CPO) Study, 74% of CPOs are citing cost reduction as a strong business priority in the next 12 months. Therefore, good business and financial acumen are also essential for procurement managers as they will be managing company budgets. Also, considering that procurement costs represent between 25-60% of a company’s total costs, it’s even more important for the procurement manager to minimise expenditure while maximising company profits.
Emphasise the ability to streamline procurement processes
New recruits come with one of the best things a company could possibly hope for: A fresh pair of eyes. Procurement operations involve a whole host of equipment and software, and comprises many steps and a wide variety of stakeholders. With so many things on the to-do list, it’s easy to get lost in the procurement process and overlook the telling signs that things could be done in a better way, or that there are areas in the procurement process that could do with improvement. An experienced procurement manager should be able to highlight what’s wrong with the company’s current procurement operations practices, and offer ways to streamline and improve it. Ask the candidates to highlight an instance in which their insight and experience helped to improve the procurement operations at their previous companies. You could even present them with a procurement process scenario and have them provide ways on how to make the process more efficient and effective.
Make good foresight and planning skills a requisite
To reduce costs and obtain great gains for the company, procurement managers must understand the future requirements of the business. The ability to look beyond the horizon and anticipate the future is a key skill that is very much desired in a procurement manager. This requires a keen understanding of consumer behaviour and seasonality, and the capacity to predict current and future market trends. It also helps to have a clear understanding of the industry, and the history of the company. With all this information, an established procurement manager then decides on how much stock a company should hold, or whether a particular purchase is necessary. Good foresight and planning skills are highly sought after in a procurement manager, as a poorly-made procurement decision can severely affect a company’s bottom line.
The procurement manager’s role is very much in the front line, where there will be plenty of opportunities to meet new faces and liaise with internal and external stakeholders. Naturally, a role that requires so much interaction must be assumed by a people person with good communication skills and a knack for building relationships. Negotiating deals with suppliers and getting management to agree to strategic procurement plans are no mean feats, and can only be achieved if there is a strong working relationship between the procurement manager and the stakeholders. Because procurement managers depend very much on their networks to guarantee the best prices for their purchases, they need to build solid relationships based on trust and respect. This involves negotiating deals that are fair and profitable to both parties. A contract that is fair to both parties will be beneficial to both in the long run. Procurement managers must also have a pleasant disposition and the ability to influence people, from the local manufacturer right up to the CEOs and directors of an organisation.
Prioritise the big picture
Savings on procurement costs can come in all forms, not just from the prices you pay for procuring goods and services. As a procurement manager, it’s important to consider the sum total of your efforts when calculating how much you’ve saved for the company. Buyers can get plenty of savings by not just focusing on product prices, but considering other elements such as the ease of ordering, on-time deliveries, as well as open communication and good relationships with suppliers. When hiring a procurement manager, it’s important to assess if the person is capable of seeing the big picture when it comes purchasing, or if they are only interested in cost reductions. Many procurement managers often make the mistake of focusing on minute savings – nit-picking on the cost of an item – when it would it would make more sense to secure long-term savings across all areas of the procurement cycle. To understand their views on cost-effectiveness, it would be helpful to enquire about past practices that they had implemented to drive higher savings for their companies. This could involve practices such as conducting a spend analysis project, implementing procurement automation, or negotiating for better terms and conditions with suppliers. This information will tell you whether the candidate is more likely to place emphasis on higher-value procurement activities, or focus on implementing miniscule changes that bring little savings.
At the end of the day, a procurement manager ensures the company strives to take strategic approaches to procurement, essentially for the success of the company. We here at ThunderQuote hope that these tips will be useful for hiring the best of the best.
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.