Estimated reading time: 5 minutes
• Succeeding as a procurement manager in a dynamic operating environment requires a combination of numerous procurement manager skills.
• The pace of business is fast, businesses are sourcing from far and wide, and the pressure to be super-efficient has never been higher. The availability of large amounts of data and technology means that managers need to be comfortable with data-led decisions.
• It’s no longer about instinct. It’s about building teams with the right mix of skills. For a manager to lead such a team, here are 10 winning skills they must possess today.
Problem-solving is an important skill for any manager. When heading over a procurement problem, the manager will constantly be faced with problems such as logistical hitches, supplier non-performance, price distortions, and so forth. The procurement manager must have the ability to frame a problem objectively, consider all relevant variables, apply available information correctly and come to an optimal solution. If they can do this consistently, they highly increase their chances of success. Part of analytical thinking also involves foreseeing problems before they occur and putting in contingency plans.
Technological skills will often complement the analytical skills of the procurement manager. Most organizations today use applications to streamline their procurement operations. From these applications, managers are able to quickly draw reports, query data, or simply retrieve contract metadata from the contract repository. A procurement manager should be comfortable with the various tools that their company uses to support its operations. This way, they will use the right information to support their decisions.
A lot of the procurement manager’s work will involve trying to come to agreements with vendors. The procurement manager must be able to contextualize both the interests of their company as well as those of the vendors. This way, they will be able to navigate the negotiation process without jeopardizing the relationship with vendors. They should also be aware that negotiations are dynamic because the company’s interests go beyond price. They should negotiate for other things, including quality standards, product delivery, credit terms, and more.
A procurement risk manager should be good at assessing the various risks that arise with any decisions they make. The risk may also arise from the actions of a vendor or other factors in the market. The procurement manager must ensure that their decisions do not expose the company to unmanageable amounts of risk. For instance, while sourcing raw materials from a certain country may be cheap, the political situation there may be so volatile that the likelihood of frequent disruptions is too high to bear. When it comes to picking vendors to work with, the procurement manager should ensure that they pick vendors who do not pose a reputational risk to the company due to their ESG track record.
A good procurement manager should possess project management skills. These skills will help them oversee procurement operations from the start to finish of particular projects or financial years. They have to be able to make procurement operations to support the bigger organizational goals. Procurement managers should be able to see things from the strategic level and also from the tactical and operational levels.
The sourcing function of any organization should involve continually scouring the market to find opportunities for deriving value. The sourcing department may find vendors with superior quality products, more streamlined operations, or with a bigger variety of products. The procurement manager should be part of these ongoing discoveries. Strategic sourcing involves applying business intelligence gathered to achieve organizational goals. It has the right mix of suppliers so that the organization has everything it needs at reasonable prices.
Contract Management Skills
Contract management begins with the creation of the contract and includes the execution and analysis of vendor performance. It’s a fairly complex process where the procurement manager has to ensure that the organization is well protected through clauses in the contract. They must hold vendors to account to ensure that the organization gets the maximum possible value from its contracts.
Cost Management Skills
Cost management skills are essential for a procurement manager because the ability to keep procurement costs reasonable is an important key performance indicator. The procurement manager should be able to find alternative sources of products if costs from the current vendor rise too much. Cost management techniques may also include negotiating longer contracts, buying in larger quantities, focusing more on category management, or working with more efficient vendors.
Interpersonal skills are important if a procurement manager is to get the best out of their staff and also if they are to maintain good working relationships with vendors. These skills help a manager get the best out of their staff members by being aware of their motivations. They can make people on their teams feel appreciated by using the right mix of rewards and recognition.
Presentation and Mobilization Skills
The procurement manager should use his presentation and mobilization skills to garner support for chosen strategy paths. Credibility is a big determinant of the level of influence a procurement manager wields in their organization. They need people to trust their decisions on vendors to work with and other important decisions in the supply chain.
Get Procurement Management Right
Procurement management requires a mix of different skills applied appropriately for the benefit of the organization. The procurement manager must always act with agility to respond to changing circumstances. Supply chain visibility in procurement management and can be enhanced through the right e-procurement software.
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