What Is A Procurement Manager? (A Comprehensive Guide)

Updated 22 February 2023

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A procurement manager is in charge of making purchases in an organisation. They perform very essential functions, like conducting research, placing orders and procuring items like raw materials and other important items. Knowing more about the job of a procurement manager and learning about their duties and salary can help you decide if this is a suitable career choice for you. In this article, we answer, "What is a procurement manager?", define their role, explain the challenges they face and find out the qualifications and skills required to become one.

What is a procurement manager?

A procurement manager, otherwise known as a purchasing manager, buys products and services for a company. Their role is to ensure a balance between the quality of products and their prices. They keep careful records of all the purchases, find supplier partners and monitor the stock availability. A procurement manager reviews past purchases made by a company to ensure cost-effectiveness. This also helps them understand a vendor's services and quality. They negotiate prices to ensure that the company gets the best return on its investments.

Procurement managers keep track of goods and services that a company purchases and ensure that they are available when required. They may maintain working relationships with several external vendors and service providers. Businesses consult procurement managers to identify what products or services suit their interests. The duties of a procurement manager may change according to the size of a company, but they continue to provide insights into improving purchases, reducing costs and identifying the right vendors or partners.

Responsibilities of a procurement manager

Procurement managers play a vital role in making purchases cost-effective, aligning with the right vendors and ensuring timely availability of products and services. Over time, their role may evolve to take on new responsibilities. Here is a list of important duties that procurement managers perform:

develop and implement cost-effective procurement strategies
build and maintain relationships with the right vendors
negotiate prices with vendors to secure the best price for their company
compare different proposals and select the one which suits the company's needs
maintain communication with vendors to ensure timely delivery
check adherence to all health, safety and environmental regulations
prepare detailed reports about transactions and purchases periodically
oversee invoicing, payment and coordinate with the finance department on the same
supervise technological systems that track the shipment, inventory and supply of materials
lead and advise a team of procurement staff

Challenges faced by a procurement manager

The role of a procurement manager may involve a variety of challenges. Considering the many responsibilities they have and a lack of control over external factors, any mistakes made by them can have a visible and tangible impact on the company's operations and revenues. Here are some of the challenges that a procurement manager may face in their role:

Mitigating risk

There are several variables affecting the successful accomplishment of a procurement manager's job like costs, quality, market risks and delivery risks. Procurement managers may collaborate with different departments to understand their requirements and deliver products or services that fit specific needs. They may quickly identify risks, analyse them and also try to implement strategies or contingency plans to mitigate them. They may also monitor the process regularly to pre-emptively prepare for unanticipated challenges.

Ensuring business transparency

Business transparency is essential in the field of procurement management. Identifying the right suppliers or vendors and maintaining them is a key task that a procurement manager may perform. They may keep regular track of vendor performance and review them for a mutually beneficial association. They may also ensure a consistent supply of products or services, and look to maintain long-term partnerships.

All these interactions, transactions and exchanges need to be undertaken in a transparent manner, as per the company policy. The role of a procurement manager comes with the responsibility to ensure ethical and error-free business practices. Since they have access to confidential business information across functions, procurement managers need to be transparent in their work and processes.

Managing dark purchasing

Some purchases may fall outside defined business purchasing limits and companies may refer to this as dark purchasing. In the long run, such expenses can be detrimental to the growth of a business. Unmanaged or rogue business spending is a challenge for the procurement manager and they may devise measures like strategic sourcing and buying strategies to mitigate such risks.

Qualifications of a procurement manager

Companies usually prefer to hire candidates with at least a bachelor's degree. Having a degree in related areas like finance, business management, economics, logistics, supply chain management or purchasing can be beneficial for candidates. Some organisations may also hire candidates who have professional or technical education for the role of procurement manager. Successful procurement managers complement their education with strong industry knowledge and advanced interpersonal skills. Here are some graduate programs that a candidate can choose for a career in this field:

BBA (Bachelor of Business Administration) in supply chain management
BA (Bachelor of Arts) in economics
BSc (Bachelor of Science) in mathematics

Candidates can also pursue diploma courses like a diploma in supply chain management to gain the necessary skills. Candidates who wish to advance their career opportunities can opt for postgraduate programs in the field. Popular post-graduate programs are :

MBA (Master of Business Administration) in supply chain management
Post Graduate Diploma in supply chain management

Skills required to be a procurement manager

A procurement manager requires a variety of skills to achieve success in their role. Here is a list of skills that you can develop to become a procurement manager:

Negotiation skills

As a procurement manager, you may engage with a number of vendors or clients. The procurement manager's goal is to ensure that quality products or services are procured at the lowest prices. For this, they may require excellent negotiation skills. These are also crucial to build a rapport with the vendors, understand their products and analyse whether they meet the company's guidelines and requirements.

Procurement managers require the ability to read people and negotiate a mutually beneficial deal. Each business may be unique and they may have to be flexible to change their negotiation tactics depending on the situation.

Networking skills

Building a strong network of contacts can be one of the most useful tools for a procurement manager. They network with peers, leaders, service providers, vendors and other stakeholders to determine the best places to purchase various goods and services. By interacting with other people in their industry, a procurement manager can stay updated about the latest market trends, fluctuations and new vendors.

Interpersonal skills

The procurement manager's role tends to be very people-centric. They connect with numerous stakeholders to understand the needs of a company, collaborate with outside vendors and source the right materials to fit the company's needs. These professionals strive to build and maintain a working relationship with a variety of professionals. They may have to interact with company officials and staff, handle a team of procurement staff and even visit vendors frequently. Hence, advanced interpersonal skills can help procurement managers build strong professional relationships and navigate their responsibilities more effectively.

Communication skills

Procurement managers interact with employees and top management of the company to understand product needs. They have to demonstrate strong verbal communication strategies to handle stakeholders and suppliers, understand correct specifications and take stock control. Similarly, they also have to work closely with several vendors, understand the product specifications and clearly communicate their requirements.

Procurement managers also provide objective suggestions and take decisions, taking into account a variety of factors. They may have to prepare reports, emails and presentations to communicate relevant data to all the stakeholders involved. Procurement managers maintain good customer relations in order to manage contracts effectively.

Decision-making prowess

Procurement managers may be in charge of taking timely decisions regarding purchases and stock refilling. They may also have to make decisions regarding vendor management, contractors, invoicing and payment. Usually, they decide when to continue a contract with a vendor and when to terminate it. These professionals make important decisions regarding the products or services a company procures.

How much does a procurement manager make?

The average base salary of a procurement manager is ₹6,51,093 per year. The average salary of procurement managers in Mumbai, Maharashtra is ₹10,88,171 per year, the highest in the country. Whereas, the average salary of a procurement manager in Pune, Maharashtra is around ₹4,67,034 per year, among the lowest. With more companies recognising the crucial role that a procurement manager plays in cutting costs and reducing dark purchasing, this career is increasingly in demand.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.