If you’re wondering what is a procurement manager, we’ve got you covered. Businesses worldwide rely on a procurement manager to help them source the goods and services they require. In this guide, we’re going to cover:
- What is a procurement manager
- Job description
- Skills needed
- Career path
- Day-to-day responsibilities
What Is a Procurement Manager
Procurement managers are buyer agents, and they work to source:
Companies rely on services and goods for their day-to-day operations, and it’s the responsibility of the procurement manager to ensure that the company has everything they need to operate.
Depending on the size of the business, the manager may work alone or with a group of buyers.
Larger enterprises have teams of buyers that the procurement manager will oversee.
Procurement Manager Job Description
A procurement manager’s job description is difficult to outline because it can change drastically from one company to another. In all cases, the manager will be responsible for buying products and services for a business to use or sell.
The description could benefit from further clarification, including:
- Solo managers will be responsible for buying and selling only.
- Lead managers will work with a group of purchasing agents and buyers that they will oversee.
When scouring job listings, the tasks that the procurement manager will be responsible for are vast, and they often include:
- Implementing cost mitigation strategies to lower overall costs for the business
- Leading or managing internal teams
- Running reports (more on this below)
- Plan and forecast standard reports with appropriate stakeholders
- Train lower-level procurement team members
- Evaluate team members
- Process orders
- Much more.
Many businesses are hiring internally and even remote workers to help assist them with procurement.
Specialists also exist in the industry. For example, some procurement managers may focus solely on the agricultural sector. The specialization allows them to have greater insights on costs and be able to build deep networks that they can use to procure goods.
BLS lists the following as the top industries that are hiring in the field:
- Manufacturing at 23%
- Wholesale trade at 14%
- Government at 13%
- Management of companies and enterprises at 9%
- Retail trade at 8%
As part of your day-to-day activities, you may be required to travel. For example, many procurement managers will travel to warehouses and vendor locations to review products and work to negotiate the best deal for their employers.
The right mix of skills is necessary to excel in this job position.
Skills Needed for a Procurement Manager Job
Excelling as a procurement manager demands that you have certain skills. The following skills are some of the most important to have if you want to be a valuable asset to a company:
Research is one of the most crucial skills you can have in today’s workforce. Procurement demands a lot of research to:
- Identify companies with products or services that you may require
- Understand the current market climate and their related costs
- Find multiple solutions to fill the same need
Procurement managers may also use their research skills to find products or services that go under the radar in business.
Product and service providers are always coming out with new products or solutions. Businesses may not know these solutions exist, but the procurement manager will because of their research-centric position.
Maintaining a pulse on the industry and keeping up with new trends and solutions to solve problems is only possible if the manager has a skillset that includes strong research skills.
Research helps these managers find solutions, but analytical skills help them narrow down choices and find the best fit. The analytical skillset should include:
- Ability to analyze the price and cost-effectiveness of a solution
- Compare solutions based on sales margins or the overall benefit of a service
Procurement managers will be required to go through a lot of data before negotiating contracts. These professionals must maintain an analytical approach to all of the data at their disposal and be able to understand complex technical specifications, too.
For what a manager lacks in analytical skills, they can often offset with research to help them find the best solution.
After finding adequate solutions, it comes time to negotiate.
Procurement involves finding solutions, but these solutions also need to fit in the business’s budget. Negotiations will occur across multiple areas, and this means that the professional will need to be able to:
- Put feelings aside to find the ideal price for the business
- Walk away from negotiations if it’s evident that cost cannot be adjusted
- Work through intense discussions while keeping calm and not taking the process personally
- Handle SaaS negotiations and manage SaaS procurement
Negotiations are an art, and it’s one that differentiates a new procurement professional from a manager who has been in the industry for decades.
The right mix of skills will help open up a career path that is both rewarding and secure.
Procurement Manager Career Path
Procurement is a lengthy career, and if you have the right skills and passion, there is a lot of room for growth. A typical career will look something like the list below, but keep in mind that there are always exceptions to the rules:
- Analyst. As an analyst, you’re entering an entry-level position, which allows you to be involved in the purchasing operations of your employer. The role of an analyst will be to ensure that the manager is doing everything right. They’ll work on communication with suppliers, run forecasts and assist the manager to strengthen the procurement in the business. You can expect to be in this position for two to four years before moving to the next.
- Purchasing manager. The next step forward in your career is to become a purchasing manager. The goal of these professionals is to conduct all of the purchasing of goods and is also called a procurement manager. You’ll be responsible for all of the tasks outlined throughout this article and in the next section.
- Director of procurement. A director of procurement is responsible for overseeing multiple areas of the procurement process. These professionals will identify and select vendors and suppliers, too. The director’s responsibilities come with a higher salary, but they will need to spend a lot of time discussing needs with other departments and must keep the entire procurement team on schedule.
- VP of purchasing. The best a procurement manager can hope for is to move up to the vice president of purchasing decisions. As a VP, you’ll be responsible for all managers under you and will perform a lot of the analytical and reporting work that is sent to higher-ups in the business. VPs also have to be concerned about rules, regulations and processes that must be followed for the company to remain compliant.
Entering into a career in procurement opens the door to opportunities that pay from $40,000 – $170,000+. You’ll enter a rewarding career with a lot of options for advancement. Procurement managers have a lot of room to move up the career ladder to earn more money and shape the future of the business.
What Does a Procurement Manager Do Each Day?
A procurement manager’s day is never the same. They are responsible for a number of tasks, and what they do each day will depend on which day of the purchasing cycle they are in.
For example, at the start of the month, procurement managers may spend most of the day placing orders for the entire month ahead. Placing orders is just one small aspect of the procurement manager’s job and daily routine.
Other daily tasks may include:
Managing and Optimizing Inventory and Orders
Inventory optimization and management is an integral part of the procurement manager’s job. Their daily tasks may include checking how many products, raw materials or units are currently in the inventory. If necessary, they will purchase more inventory.
Managers may also use projections and past reports to make an informed estimate of how much material the company may need. Forecasting is a regular part of their routine to help anticipate the company’s output needs.
Additionally, procurement managers will review orders and make adjustments as needed. They will also review past and recurring orders to ensure accuracy.
Staying Current with World Events and Conditions
Research is a big part of the procurement manager’s job, and it goes beyond just finding new products and solutions. They also spend time researching current events and market conditions that may impact their calculations, ability to replenish materials, etc.
For example, supply chain shortages may force procurement managers to find new suppliers or shift their purchasing strategies.
They may also attend industry-related events to keep up with changes and connect with new suppliers. Although this may not be something they do every day, they may attend events regularly.
Attend Meetings and Communicate with the Team
On any given day, procurement managers may attend production meetings to gain insight into output demands. They may also discuss the company’s needs to ensure they are meeting them.
Additionally, managers will communicate with team members to set realistic expectations for incoming products or units.
Procurement managers will also communicate with suppliers and buyers to clarify information, ask questions or discuss problems that need resolving.
Those in this position must have excellent communication skills, as much of their day is spent communicating with others via phone or email.
Prepare Reports and Update Records
Procurement managers maintain records of items purchased, their cost and delivery information. These records are updated regularly to ensure they reflect the most recent and accurate information.
Managers also prepare reports that include budget allocations, projected spending and actual spending.
Organization skills are crucial to ensuring reports and records are updated regularly and well-maintained.
Procurement Manager Responsibilities
Procurement managers have a wide range of responsibilities and day-to-day tasks, all of which are centered on finding the best solutions, products and supplies for their employer.
One of the primary responsibilities of a procurement manager is product research. Managers spend a lot of time researching options and solutions for the company. The process may include:
- Finding new solutions that can solve problems or meet the company’s changing needs
- Attending trade shows, conferences and meetings to learn more about suppliers, solutions and industry trends
- Networking to learn about new solutions or suppliers
Product research is a big part of the procurement manager’s job and the first step in implementing new solutions or suppliers.
Reviewing and Negotiating Contracts with Suppliers and Vendors
Procurement managers are also responsible for reviewing and negotiating contracts with vendors and suppliers.
When considering a new contract with a supplier or vendor, procurement managers will negotiate the best:
- Agreement terms
If they are acquiring a new tech solution, negotiations may also focus on features or seat numbers.
Periodically, procurement managers may review contracts to ensure they are the best option for the company. Then, when contracts are up for renewal, they may be scrutinized more closely and compared to other available options.
If the manager finds another solution that offers better pricing and terms, they may try to negotiate with the original provider to see if they will match the offering.
Delegating Tasks to the Procurement Team
Because they are in a managerial position, procurement managers also delegate tasks to the procurement team.
Task delegation helps the procurement manager reach goals faster and with greater efficiency. It also gives the manager more time to focus on core tasks.
Review RFPs (Requests for Proposals)
Procurement managers are also in charge of reviewing RFPs, which are documents that describe and announce a project and solicit bids to complete it.
Procurement managers review bids and determine their feasibility and the bidder’s ability to complete the project.
When setting evaluation criteria for RFPs, procurement managers consider:
- The needs of stakeholders
- The RFP’s priorities and areas where compromises can be made
- The project’s scope
Creating Procurement Reports
Procurement reporting is intense, and there are a lot of steps that the manager will be responsible for overseeing. First, the manager will need to:
- Define the business’ goals and needs
- Gather data on suppliers, purchases and costs
- Clean all of the data
- Create logical supplier groupings
- Analyze and put spend data in place
- Run predictive analysis and automation
The manager will also need to provide these reports to others in the organization. Reports must be easy to digest and understand, which is an integral part of a procurement manager’s daily tasks.
Other Procurement Manager Job Titles and Responsibilities
While “procurement manager” is the most common title used for this position, the role may also be given other names. Procurement managers may also have other responsibilities in addition to the ones listed above.
Other Job Titles
- Procurement Director
- Procurement and Sourcing Director
- Procurement Officer
- Head of Procurement
Other Procurement Responsibilities
Along with the duties and responsibilities listed above, procurement managers may also be responsible for the following:
It is every procurement manager’s goal to ensure their chosen solutions are providing a good return on investment. Procurement managers may look at several Key Performance Indicators (KPIs) to help determine whether the company’s current solutions are worthwhile.
The KPIs most widely tracked by procurement managers include:
- Cost savings
- Employee deliverables
- Spend under management
ROI analysis allows procurement managers to demonstrate the value they and their team bring to the company by sourcing and implementing solutions that save time, money and more. Additionally, ROI analysis can help managers justify requests for new or upgraded solutions or products.
Risk and Compliance Management
Procurement managers often engage in risk and compliance management as well. Their goal is to ensure that the products or solutions they procure do not jeopardize profits or lead to non-compliance.
To mitigate risk, procurement managers may perform:
- Spend analysis to optimize suppliers and spending. The goal is to ensure the company isn’t overspending on unnecessary features, products or supplies.
- Supplier consolidation to protect against price instability and streamline management.
- Contract compliance analysis to ensure suppliers are adhering to the terms and conditions of the agreement. Analysis will also look at which percentage of contracts have been fulfilled and which requirements have been met.
Risk and compliance management allow procurement managers to ensure their work is driving results for the company without putting it at risk.
Meet with Management to Understand the Company’s Needs
A procurement manager’s job is to find and source solutions that help the company streamline tasks, save time and improve profitability. To ensure they are meeting the company’s needs, they will meet with management regularly.
Over time, a company’s needs will likely change. Regular meetings keep a procurement manager up to speed on these changing needs and allow them to adjust their strategies accordingly.
Procurement managers play an important role in the company. They help their employers find the best solutions for their needs at the best prices and terms. While the role is complex, it is also rewarding. If you aspire to become a procurement manager, this guide will help you understand the requirements, skills and responsibilities of this job.