It’s clear that a company’s success can often depend on its ability to purchase the products necessary for its operation. There are many different types of products that will be necessary for most companies, including office supplies, software and hardware solutions, furniture, etc.
As a purchasing manager, you can directly impact your department or business through the purchases you make. You can develop new methods of purchase from vendors who are otherwise overlooked or provide new insights and knowledge that benefit the company.
Procuring the needed item or service quickly and cost-effectively can be difficult due to a lack of certain skills. Fast and efficient delivery services mean happy customers.
There are several professional procurement courses at SIPMM that help to close the skills gap that you require in your field. In this article, we discuss procurement skills and explain why they are so important. We also list 16 skills that can help set you apart in the modern business world.
What are procurement skills?
Procurement skills are essential in guiding purchasing decisions. They enable professionals to take a leading role in making sound investments that will help any organization save money and gain a competitive edge.
They use communication and research skills to determine what equipment or material is best for daily functions or projects. They are often skilled in the use of business-related resources to gain insight into a variety of sectors, including those that can be applied to one’s own workplace.
Procurement skills are also an essential part of a purchasing manager’s toolkit and make it possible for him or her to know when it is time to finally replace old equipment and which price margin would be most appropriate for the department’s budget.
Importance of procurement skills
The procurement or purchasing manager is a critical role in any company because they are responsible for seeking out the best prices and deals from suppliers. This skill is necessary to maintain the department in efficient operation and help it stay competitive.
Imagine you have a piece of equipment that malfunctions, then the purchasing manager will be responsible for replacing it in order to keep company production going.
To increase production, it can be important to hire people that have necessary skills. For example, if a company hires new workers, and the skills of those workers lend themselves well to increasing production levels.
A good production manager recognizes that the potential for quick growth in demand for products can cause an increase in backlogs and delayed orders, so they purchase additional materials to offload the workload of a department.
16 skills every procurement manager should have
Research skills are a necessary component in the skill set of any purchasing manager in today’s fast-paced and competitive business environment. This is because research skills enable managers to gain vital insights about the market, costs and risk assessments of any potential purchase, which enables them to make more informed decisions for their company.
Purchasing managers are often tasked with assessing the benefits and drawbacks of a potential purchase. They work to predict probable future outcomes and ways to improve capital, which may be difficult when dealing with such high-value items like real estate.
They can also make the research of new suppliers and potential companies before making purchasing decisions, which may help them secure future contracts.
2. Managing relationship.
Having efficient relationship management skills can be important because purchasing managers often interact with individuals from different departments to ensure that they are able to fulfil their obligations.
They communicate with staff to gain feedback or communicate directly with departmental managers or executives to inform them of existing product needs or plans.
Understanding how to communicate with the members of a relationship and work efficiently within the confines of a department can help make relationships function more smoothly.
With globalization and the world becoming a smaller place, one of the keyways that businesses have been able to maintain this skill is by managing relationships with external resources and suppliers. They have also made it easier for companies to find new opportunities in the global marketplace.
An efficient way to work with existing clients is to provide them with a superior customer experience that guarantees their continued patronage. Likewise, new customers can be found and onboarded by targeting the communication channels they are most likely to frequent.
3. Analysing of Data.
They use data about past and future departmental purchases to help them make more informed decisions and to reduce the potential risks that come with sourcing material. They also rely on this data to predict future demand influx.
Purchasing managers have a deep understanding of the need to convert data into illustrative figures, such as charts, tables, and spreadsheets. They are also adept at presenting data during meetings where they speak with clarity and conviction in order to reach the best possible outcomes for their organisation.
They may also be required to talk to executives in other departments and convey information about future decisions that need to be made or things that need to be purchased. They may also be asked to explain something fully in order to ensure they have communicated their needs correctly.
The ability to understand the intricacies of strategy skills can help them make informed decisions when it comes to purchasing goods and ensuring that they are aligned with the goals of the department.
They can assess both current economic conditions and the price of materials to make beneficial purchases that help to reduce departmental costs.
Strategy is a key part of managing a company. That’s why it is important to have an idea of what the future may be like. For example, if you know that an external audit is coming up soon but your staff needs time to prepare, you could ask your purchasing manager to purchase the products ahead of time so that it will be ready for when it’s needed.
Purchasing managers are often tasked with handling the less pressing aspects of a company’s operations such as providing resources or managing smaller purchases, but they also have a say in how to deal with emergent issues such as broken machines.
5. Forecasting the purchase.
Purchasing managers need to know how to strategically buy items in order to successfully fulfil marketing departments’ forecasts. They must have the adequate skills in forecasting so that they are able to provide the right amount of inventory according to demand.
Fully understanding the general economic climate for a particular good and the current state of the company can significantly help an individual decide when it comes to making a purchase.
For example, if the surplus of capital remains in a department budget, it may be a good idea to spend the money now on buying multiple materials that are needed for future projects.
6. Aligning company goals.
An important skill that many purchasing managers possess is the ability to assess and align company goals with ways of properly managing their department or business. This ensures that the corporate strategy can be effectively translated into a roadmap for their department, which will allow them to provide quality service and increase productivity.
For instance, if the company is trying to grow within the next quarter, a purchasing manager may consider whether they should change their material purchases.
They may also work with others in the organization to ensure that certain steps align with the goals of the company.
7. Managing risks.
Purchasing managers with effective risk management skills can confidently predict, manage and avoid risk situations that may arise in their department. With a solid understanding of the key concepts and principals involved, they will know how to handle any given situation to protect the company from any potential losses.
They may manage risk exposure by choosing company-aligned clients and clients that offer a low risk, high return portfolio. They may also track investments, understand and evaluate pricing, as well as monitor digital risks factors to ensure the safety of their investments.
Purchasing managers are very aware of the importance of risk management skills because they can help to make more informed decisions and have a positive impact on workplace functionality.
It is also important to stay up to date on the latest risks and practices so they can improve current policies. For example, staying up to date on the latest phishing schemes in order to better prepare themselves against these attacks.
8. Managing Finances.
One of the most important responsibilities of a purchasing manager is to ensure that adequate supply needs are met daily. This can help to develop financial skills by applying budget management in order to make sure that the right purchases are made for the needs of different departments.
They can often come up with strategic financial planning solutions that may work well for the company when taking into consideration the need for purchasing.
These strategies may include seeking alternate suppliers who are able to offer the same level of quality and cost or buying surplus materials during a low-price season to lock in lower prices.
Purchasing managers are responsible for ensuring that the departmental budget is used in a way that provides the greatest efficiency. They do this through a variety of tactics, including purchasing materials only when there is a price advantage or an immediate need.
9. Marketing Globally.
Depending on the department or company, purchasing managers may need varying levels of global marketing skills in order to properly sustain department needs. This can include international business, competitive intelligence, cross-border marketing, and more.
Even if your department doesn’t require global marketing plans, purchasing managers can still encourage innovative relationships with suppliers from around the world. They can do this by purchasing materials and supplies from suppliers abroad, or by simply seeking out new ideas and innovations that they could integrate into their current products.
Maximizing the profits from international markets may involve considering skills such as localization. This can enable a purchasing manager to properly communicate with potential suppliers of their company and provide them with ample opportunities for the project in question.
Purchasing managers also possess sustainability skills and are tasked with the responsibility of repurchasing materials for departments that produce goods or test products. As an example, in a department that has a limited supply of items each month, the purchasing manager must make sure the department can fulfil their quota.
If a Purchasing Manager anticipates that a higher quota is expected within the next period, they may be more likely to create surplus orders for materials to ensure that it is met.
Environmental responsibility is one of the key cornerstones of sustainability management. It helps to determine when it may be necessary to purchase new goods and when they can rely on their current surplus.
Purchasing managers can develop new innovations in their supply chain and have a hand in developing new product innovations that can help their company grow. They may not be involved with the development of revolutionary technologies, but they play an essential role in the innovative process.
Innovation skills are essential to understanding the latest supplier developments, as well as following any current events that may affect a department’s future purchases. A good knowledge of innovation skills means that you can better forecast any potential changes in market trends and advise on how best to meet them.
For example, if a new product causes the price of a certain material to go down, then it would be possible for a purchasing manager to purchase the material as soon as possible in order to take advantage of this.
Becoming innovative in the purchasing department is a key skill that managers need to develop in order to make it through the day. By buying surplus inventory, which every manager needs for their department, and by evaluating stocks, which are necessary for any company to maintain its operations, purchasing managers can keep themselves on top of their game and ahead of the curve.
Leadership skills are an essential part of the job that any purchasing manager should have. A leader is someone who can interact with stakeholders, manage day-to-day activities and create action plans. The best leaders also possess excellent communication skills, such as empathy and persuasion, to inspire their team and build trust.
Depending on the number of departments they are responsible for, a purchasing manager may also train new hires within their department, and in some cases even assign department-specific purchasing duties. They might also take part in cross-functional training, job rotation and mentoring in the purchasing team.
Since purchasing managers handle both the material purchases (for example: raw materials, office supplies, and computer hardware) and the allocation of these resources (to a company or department), they are often the driving force of a company’s financial success.
13. Decision making.
Understanding how to be decisive is an important part of the role of a purchasing manager, as it’s their responsibility to make the correct decision for their department or company. They must take everything into account when making decisions and be ready to change course quickly if needed.
They can use their decision-making skills to renew an item for purchase, decide on how much of a renewal to make, and if they would like to continue with the same supplier.
They understand that their main duty is to protect the interests of the company, whether they pertain to clients, suppliers or stakeholders. They will choose to keep some clients while letting go of others as required.
14. Project management.
Purchasing managers spend a great deal of time monitoring and coordinating projects, so having project management skills is essential to be able to successfully manage the different requirements of each project. They may compensate for necessary project circumstances or allocate additional funds based on the project’s needs.
Managers in the modern workplace may be required to do more than one task at once, such as managing multiple departments and making sure that they have enough budgeting requirements throughout the year.
15. Managing time.
As a person in a high-pressure position, the purchasing manager is often known for possessing excellent time-management skills and establishing processes to maintain efficiency in the office environment, whether through utilizing artificial intelligence powered writing assistants or maintaining an efficient workflow with their team.
For example, if they manage several departments, they may schedule a time to work with different departments or assign responsibility to others, depending on the department’s needs.
They may also monitor the time it takes for purchased materials for a production department to arrive at various locations and provide an accurate assessment of when these materials will be delivered.
16. Analysing key performance indicators.
Since purchasing managers are responsible for the departmental quota, they are usually tuned in to the key performance indicators (KPIs) of each department that they work with.
Although like quotas in certain ways, KPIs differ in that they typically apply to immaterial objects such as processed files or completed tasks, unlike quotas which are usually applied to tangible objects like cars or pieces of furniture.
One of the most important aspects of being a purchasing manager is understanding the different KPIs that are key to the department. These metrics, when tracked correctly, can help to inform the purchasing manager on what is going on with the business, and prepare for any disruptions that may happen in the future.
For instance, if a department produces 50,000 units a week, it is expected that their purchasing manager will plan to purchase more than that number of materials in the following week. However, if production has been steadily decreasing every quarter for a long period of time, and an experienced producer takes note and begins to purchase less goods on a quarterly basis, it is possible that the business will save money.