Procurement Skills: Defined, Importance, and Real-Life Examples
Updated 12 September 2023
An organisation's success often depends on the ability of a corporation to purchase products necessary for its operation. The purchases you make as a purchasing manager can have a direct influence on your department or organisation. Acquiring the required item or service instantly, efficiently and cost-effectively requires certain knowledge and skills, and you may benefit from learning about them if you are interested in working in this domain. In this article, we examine these skills, explain why they are important and provide a list of 13 skills to help you stand out in your industry.
What Are Procurement Skills?
Purchasing managers and procurement experts employ procurement skills to advise purchasing decisions within a department or business. They utilise communication, business and research skills to figure out what kind of equipment or material is ideal for daily tasks or projects. A purchasing manager's skills can also aid in determining when it is time to replace equipment and what price margin is best for a department's budget.
Why Are Procurement Skills Important?
These skills are valuable because they may assist a purchasing manager to make an accurate decision that can help the department run smoothly. For example, if equipment breaks down, the purchasing manager can replace it fast to keep the department running smoothly. These abilities may also be necessary for production to increase. For example, if a department adds new employees, their productivity potential may improve. A competent production manager may recognise this potential and purchase additional materials to aid the department's efficiency.
13 Purchasing Skills For Managers
The following are 13 skills that purchasing managers employ on a routine basis:
Purchasing managers can use research skills to learn about the market, costs and risk management. Purchasing managers may also evaluate the advantages and disadvantages of purchases to forecast likely future results and identify strategies to improve capital. They may also be in charge of conducting market research for new suppliers or companies before making material purchases.
2. Data analysis
Purchasing managers examine data from previous and upcoming departmental purchases and utilise this data to guide their actions, eliminate material risks and forecast future demand influxes. Purchasing managers know how to turn data into visual representations like charts, tables and spreadsheets and how to present this data in meetings. They can also discuss needs and concepts to thoroughly explain a problem to other department executives, to impact future decisions or purchasing plans.
Related: 10 Valuable Data Analysis Skills
3. Relationship management
Effective relationship management skills are essential for purchasing managers because they engage with a variety of people regularly. They may communicate resource requirements to employees to obtain information and comments on previous purchases or they may interact with departmental managers to explain product requirements or current goals. They can perform more efficiently inside a department if they know how to manage a relationship and communicate details properly. Another method through which they keep this competence is by managing relationships with external resources. Working efficiently with existing clients or identifying and onboarding new ones can help them avoid external complications.
4. Purchase forecasting
Purchasing managers can procure things strategically based on marketing forecasts, so having adequate purchase forecasting skills might be beneficial. Understanding the overall economic climate for a certain good and the current condition of the organisation might assist them in determining when to buy. If a department's budget has an excess of capital, it could be a smart idea to buy several materials ahead of time.
5. Company goal alignment
Many purchasing managers can assess and integrate company goals with practical ways to operate a department or business. If a company wants to expand its business in the next quarter, a purchasing manager might consider whether changing material purchases is a good fit for the company's plans. They may also speak with others in the firm to see if particular activities are in line with the company's objectives.
6. Strategic skills
Skills in strategy can assist purchasing managers in determining how to purchase items in the best interests of the department and its objectives. They can examine both the current economy and material pricing to make acquisitions that benefit the department. Purchasing managers may also choose to place orders ahead of time so that departments can plan for events such as external audits or board visits. While buying managers can deal with urgent issues like malfunctioning machines or a shortage of resources, they may also handle purchases that require more time and care.
7. Risk management
Purchasing managers can use excellent risk management skills to predict, manage and avoid risk issues within their departments. They can reduce risk exposure by selecting company-aligned clients, tracking investments, understanding pricing and assessing digital risk elements. Risk management skills are also vital for purchasing managers to have because they can aid in decision-making and the development of a functional workplace. They can also strengthen rules by staying updated and analysing current risk practices. Staying up to date and evaluating current risk practices can also help them improve policies.
Purchasing managers possess an understanding of sustainability and they utilise this to repurchase resources for a department that makes goods or tests products. For example, a purchasing manager ensures that if a department has a monthly quota of items, the department has adequate supplies to make and test that quota each month. If they are expecting a bigger quota in the near future, purchasing managers may place surplus orders for materials. They use sustainability management to figure out when they may buy things and when they can rely on their current excess.
9. Global marketing
Purchasing managers may require varying degrees of global marketing abilities to meet departmental needs, depending on the department or company. Purchasing managers can develop innovative partnerships with suppliers from all over the world, even if the department does not require global marketing plans. Localisation and cultural awareness can assist a buying manager to connect effectively with overseas suppliers and may open up new prospects.
10. Financial skills
Managing supply needs for one or more departments daily can also assist a purchasing manager in putting their financial skills to use while working within a budget. They might come up with innovative strategies to use funds for their purchasing needs that benefit the company. Using alternate sources, obtaining supplier discounts or deliberately purchasing surplus material during a low-price season are some of these techniques. Purchasing managers guarantee the efficient use of the department's money by purchasing materials only when there is a cost-benefit or an immediate demand.
While purchasing managers may not invent new technologies or methods of production, they can be creative in terms of supplier development and product creation. They can use their innovation abilities to better understand supplier advances and stay on top of any current happenings that may affect a department's future purchasing. For example, if a new product lowers the price of material, purchasing managers may know this right away and act quickly to purchase the item. Purchasing managers utilise a key talent to keep their departments running: becoming innovative through purchases, both to gain excess and to analyse a stock.
12. KPI analysis
Purchasing managers handle departmental quotas, so they are typically familiar with the department's key performance indicators (KPIs). Although similar to quotas in certain ways, KPIs differ as they apply to immaterial objects, such as processed files or completed tasks. Understanding a department's KPIs can assist a purchasing manager to develop a better understanding of the department's business trends and prepare for future developments.
If a department produces more units each week, for example, a purchasing manager may plan to purchase more supplies in a week. If production drops every other quarter, an experienced buyer may take notice. This may lead them to buy less every other quarter, potentially saving the company money.
A purchasing manager's leadership qualities can assist them in interacting with stakeholders, coordinating daily tasks and formulating action plans. Purchasing managers may also train new hires within the purchasing team and assign department purchasing assignments, depending on the number of departments they handle. Within their purchasing teams, they may also be in charge of cross-functional training, job rotation and mentorship. Because purchasing managers are also in charge of most material purchases, they are often in control of a company's or department's resource allocation process.
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