Procurement manager role overview
Companies operate by taking in raw material inputs and converting them into useful outputs that customers will pay for. This is not only applicable to manufacturers but also in the service sector. The main difference is in what those inputs are and the processes employed to transform them.
Procurement/ purchasing managers fill an important role in this production cycle as they are the ones who are responsible for sourcing all the required inputs. For manufacturing companies, these inputs are usually raw materials or components manufactured by contract manufacturers or other vendors. For service sector companies, these inputs are in the form of various supplies that are required for running the business which could be anything ranging from tech hardware to paper supplies.
In some companies, the procurement manager is also responsible for handling the multitude of vendors that are essential to operations. This means that the responsibilities of the vendor manager are also rolled into this very same role.
Procurement manager job description
Procurement managers also go by several other names like – purchasing manager, logistics manager, sourcing agent, supply chain specialist, etc. However, at the end of the day, their main responsibility remains the same – getting the required inputs ready for the company and doing so in a cost-effective manner. Here are some examples of the specific responsibilities entrusted to procurement managers:
- Searching for, onboarding and coordinating with vendors and material suppliers.
- Extensively working on contracts with third-party vendors. This includes price negotiations, service level agreements, exception handling and discussing other such matters which need to be covered in the formal contract.
- Procurement managers also need to work on and send out Requests for Proposals (RFPs) for any specific good or service that the company requires. These RFPs are usually very thorough and comprehensive documents that cover every aspect in detail and don’t really leave anything to ambiguity.
- Tracking existing contracts and re-negotiating and re-executing them when necessary
- Managing the relationship with active as well as potential vendors. A good procurement manager is expected to have a broad personal network of contacts that can be tapped into to get the best deal for the company.
- Evaluating the various risk aspects when dealing with a vendor also falls under the ambit of a procurement manager’s responsibilities. It is not just enough to ensure that the inputs are received at the lowest possible cost; ensuring that the supply chain is not vulnerable to shocks is also important.
The procurement managers might also have to come up with business continuity plans in case of various eventualities. This involves alternate vendor arrangements and sourcing strategies. For example, a political event might disrupt supplies from an overseas contract manufacturer, and affected supplies would then need to be sourced from somewhere else.
Depending on the size of the company and the department, a procurement manager might also have to supervise and evaluate the work of others in the team.
There are often regulatory or legal restrictions placed on procurement as well. For example, it is illegal to import from certain sanctioned countries. The procurement manager, in collaboration with compliance and other departments, is responsible for ensuring that any regulatory lapses do not occur when it comes to procurement.
Senior-level procurement managers are usually considered valuable members of the management team who have a key role to play in increasing the operational efficiency and overall profitability of the firm. They would be expected to perform detailed cost analysis and effectively communicate their ideas to other management-level executives or even the board.
Companies these days use advanced inventory management and manufacturing strategies like just-in-time inventory and agile manufacturing. Purchasing managers must cooperate fully to ensure that such initiatives work flawlessly in the grand scheme of things. This makes the role of the project manager very technical in nature. An extremely high level of operational efficiency is required in such circumstances. This is where Six Sigma or supply chain optimisation concepts come into the picture. You can learn more about that in this article on qualifications and skills.
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