Procuring goods and services essential for a business is a never-ending process. The task could be arduous for a large enterprise that needs different raw materials and expertise to function smoothly. This is where a procurement manager plays a key role. He is someone who is responsible for managing individuals who procure goods and services for an organisation. In short, he handles the procurement team. However, hiring the manager with the right mindset and skills is essential to make a difference in the procurement process.
Here are five key skills that a procurement manager must possess to excel in a productive environment:
According to the CIPS/Hays Procurement Salary Guide and Insights 2017 survey, 83% of employers felt that soft skills and communication were among the most essential skills they sought when hiring a senior management professional. Without interpersonal skills, a procurement manager would not be able to handle teams and individuals. Furthermore, since he needs to communicate with different vendors, suppliers, and stakeholders, effective communication is essential.
A procurement manager must communicate the requirements effectively to the vendors to get the goods at a specific time. He also needs to address his team's shortcomings and challenges to become more productive and efficient. The manager must set up meetings and explain their roles to his team, and that's where interpersonal skills come to use.
Apart from being a smooth communicator, a procurement manager must also negotiate wisely. Since procurement includes purchasing goods in large quantities, as a key negotiator of the company, he will have to bargain to maximise the company's profits. Here, communication skills play an important role in avoiding conflicts.
Negotiating also means keeping all the parties involved in the discussion satisfied. Since a procurement manager must strive to build relationships with suppliers and stakeholders, negotiating skills make a big difference.
A significant change in the procurement process can quickly destabilise the entire production chain. For example, if an apparel company that needs raw fabrics to manufacture clothes faces the non-availability of certain fabrics, it could affect their production. Getting the fabric from a distant market and making the right contacts is time-consuming and can increase production costs due to overheads like transportation.
In challenging situations like this is where a smart procurement manager thrives. He prepares himself and his team for such a change while establishing trusted contacts in advance to handle such a crisis. Moreover, he must leverage the latest technology that offers seamless communication between manufacturers and suppliers working in different markets.
Therefore, management skills are one of the top-notch skills that a procurement manager should possess. He would often have to make the best use of the available resources and contacts.
A procurement manager should also be an expert in managing internal transformations like changes in technology used for managing records. For instance, organisations seek a procurement manager who is qualified to generate reports and analyse them from the invoicing software and other applications used by their teams. However, the manager must be able to find and implement a new application or software to streamline the procurement process. At the same time, he should be able to explain the new process to his team.
Most organisations aim to reduce their procurement cost to increase their net profits. Much of this task is managed by procurement managers that guide their teams to target the right markets, individuals, and suppliers. A procurement manager needs to have a sharp financial acumen to manage the procurement costs within the budget. Mostly, it is the quantity of goods procured by a company that decides whether a project will be financially feasible for them or not.
For instance, a manufacturer of ready-made garments needs 100 yards of cotton to make 30 shirts. However, if the company has only a budget of Rs. 10,000 for the fabric, the procurement manager has to find the cotton suppliers who sell the fabric for Rs. 100 per yard or less. Apart from finding these suppliers, the procurement manager must evaluate which supplier offers the best cotton fabric at the lowest possible price. If he manages to find a supplier that provides 100% cotton fabric at Rs. 80 per yard, the additional Rs. 2,000 can be used to buy another 25 cotton yards. This would help the company to earn more profits by selling cotton shirts.
Being result-oriented is an essential skill for a procurement manager. This is because, at the end of the day, companies are only concerned with the procured goods and services. They don't need to worry about the actual procurement process. Therefore, the procurement manager has to often shift his focus from the process to the results. By focussing on the result, he can imagine the end outcome of every process. It will enable him to streamline the process by working on time, cost, and other constraints.
Therefore, a procurement manager has to find multiple ways of procuring the same raw materials or services. After that, he can compare the means to generate the best possible results within the time, cost, and effort constraints. To help compare various providers of goods and services, he can make use of technology-based platforms that enable him to carry out a thorough comparison of available resources. For that, he must be able to post his requirements on a platform where he can get suggestions of vendors, suppliers, and manufacturers that operate within his region, budget, and other conditions.
He will have to sort his requirements into different categories to get the desired outcomes. These categories might help him find multiple goods from the same supplier or market. Therefore, it would enable him to fulfil maximum requirements conveniently. By making categories, he will also be able to analyse the essentials and find out whether he is falling short. This will ultimately help him target the markets and suppliers that offer goods and services at competitive prices.
While finding resources and negotiating deals is one part of the procurement process, managing contracts and ensuring that the contract obligations are met is another. Therefore, an efficient procurement manager will see to it that contracts are made to enhance the organisation's operational efficiency. Along with the operational performance, contracts should minimise the financial risks by including appropriate terms and conditions. After making a sound contractual agreement, the procurement manager will also have to ensure that each vendor, supplier, and manufacturer meets the contractual obligations.
If some suppliers don’t follow the contract or are not competent to fulfil the obligations, the procurement manager must convey it to them and find solutions. He must take necessary action to meet the requirements without raising any conflicts. The answer could be reframing the contract to adjust a supplier or vendor. Designing contracts according to a specific product, service, or requirement is among the key skills that he must possess. Making different types of contacts and tracking them can be difficult, especially when he does not have the necessary staff to monitor them. In such a situation, he must be able to use platforms that enable him to build efficient contracts quickly and monitor them through automated processes.
Now that the key competencies of a procurement manager have been highlighted, organisations must ask their hiring team to focus on these skills while recruiting procurement managers. However, it is not always possible for startups to hire a team for procuring resources. In such cases, they should leverage technology platforms designed to minimise the efforts of the procurement process.
Fashinza is one such platform that minimises the gap between raw material providers and consumers in the apparel industry. It helps fashion apparel makers and suppliers to post their requirements, communicate, and build relationships for the long term. The hassle-free, transparent, and quick process facilitated by this online platform allows everyone in the industry to achieve scalable growth for their business. Visit Fashinza today and see how they can simplify the apparel manufacturing process!