Are you looking for ways to improve your procurement management process?
You’re in the right place.
In order to be successful in procurement management, it’s important that you understand
· What the process actually entails,
· The key people involved in the operation, and lastly
· Best practices you can adopt to improve your own efforts.
Without further ado, let’s jump right into it.
What is Procurement Management?
Procurement management is the process of managing an enterprise’s procurement requirements in a structured, systematic, and disciplined manner.
Since procurement is such a pivotal and complex business function, affecting the bottom line, it must be handled with great dexterity. And because the management of the procurement process is so intricate with numerous moving parts, it is a team affair.
And speaking of teams…
Procurement Management Team Roles and Responsibilities
The average procurement management team is made up of five key players:
· The Procuring Buyer
· The Procuring Officer
· The Procurement Manager
· The Purchasing Director
· The Purchasing Analyst
A sound procurement team allows for a smooth and effective purchasing management process. Let’s examine each of the roles in greater depth.
1. The Procuring Buyer
The Purchasing Buyer or Procuring Buyer is the role given to the person on the procurement team whose job is to source and qualify vendors. They co-handle the RFx process with the Procuring officer, evaluate supplier information, ensure the supplier has the capacity to fulfill the purchase orders.
Once they’ve gone through the returned RFx documents, the Procuring Buyer creates a shortlist of suppliers to invite to the reverse auction. The Procurement Manager must approve of this list before the auction can be carried out.
2. The Procuring Officer
The Procuring Officer also known as the Purchasing Officer works alongside the Procuring Buyer and is in charge of communications with the vendor. They are also the key liaison in negotiation matters.
They are the one who ultimately sends the Requests for Proposals after the Procurement Manager has approved of the list created by the Procuring Buyer.
An additional responsibility of the Procuring Officer is that of contract management. After awarding the contract to selected vendors, the Purchasing Officer begins the next stage of the procurement life cycle by issuing the purchase orders to the suppliers.
3. The Procurement Manager
Procurement Managers bear a supervisory role and are there to plan, organize, lead and guide team efforts. Through their experience, managers can improve overall procurement management process efficiency and team effectiveness.
The Manager assesses the Procurement Buyer’s vendor list, evaluates the items requisitioned, and confirms technical product specifications before purchase orders can be generated.
Ultimately, the Manager has the final say in purchasing decision making. However, the Manager is not a lone-wolf and has to work in collaboration with both the Purchasing Director and Project Manager as well.
Buying decisions are then made after communication with both the Purchasing Director and Project Manager. In this way, purchasing is strategic and has been examined from multiple angles to ensure the deal and contract are in the best interests of the manufacturing company.
4. The Purchasing Director
The Purchasing Director’s duties are manifold. Developing and implementing new plans in innovative ways is paramount for success in procurement management.
Additionally, the Procurement Director’s responsibilities involve setting goals for the purchasing department, defining the company’s long-term purchasing direction, and engaging in high-value contract negotiations with major stakeholders such as the government.
The Director handles federal-level bids, tenders, and takes the initiative to reach out to international firms to source procurement agreements and contracts.
They also coordinate day-to-day activities while striving to keep all manufacturing purchasing operations compliant with prevailing manufacturing regulations.
5. The Purchasing Analyst
The Purchasing Analyst is the person whose major responsibility involves keeping executive management in the loop about the status and progress of the procurement process.
They follow up with all the team members so they can write procurement reports to be shared with upper management.
This person must also track procurement spending, contrast spending against contracts, and verify non-contracted spending. Purchasing analysts are all about accounting for every dollar spent by the procurement team.
Finally, they work to reinforce manufacturing policy compliance and encourage the team to follow procurement management best practices
So, now that we know what procurement management is and the main people who oversee the process in manufacturing companies, let’s turn our attention to the steps you can take to improve your chances of successful procurement management.
Steps for Successful Procurement Management
Step 1: Don’t Micromanage Team Members
Procurement management is a team sport with clearly defined roles and responsibilities.
Micromanaging team members undermine employee confidence, leads to rebellion, team demoralization, and eventually creates bottlenecks in a process that should be straightforward.
Step 2: Work on Improving Communication Skills
Did you know that 86% of employees and executives say a lack of effective communication is one of the major causes of failure in the workplace?
In fact, Debra Hamilton, a leading communication expert has estimated that small businesses with 100 employees or less typically lose $420,000 because of miscommunication.
If you want to succeed in procurement management in your manufacturing company don’t overlook the importance of good communication skills.
Step 3: Invest in Building Sustainable Long-Term Vendor Partnerships
The first two steps looked at internal issues, this next step has to do with how you relate with your vendors.
The best and most favorable deals, offers, and contracts are had when you take time to establish a good rapport with your suppliers.
By making it a point to operate in good faith, build trust by delivering on your promises and paying on time, you set yourself up to succeed in your procurement management campaigns.
When done right, procurement management greatly improves the efficiency of the overall purchasing process. From searching for vendors right down to the purchase requisition and purchase order process.
By following strategic, tried-and-tested steps, you too can become successful in procurement management.
And with trusted partners like ProcurePort who provide you with robust, enterprise-grade procurement technologies such as contract management software, RFx solutions, and reverse auction bidding platforms, you can’t go wrong.
If you would like to discuss procurement software with a consultant, or to schedule a demo of our suite of procurement solutions, contact us today.