by Ron D’Andrea
Day in, day out, sales teams come up against a relatively new breed of professional: the procurement officer, or the buying manager, or the purchasing officer.
“Buyers are the people responsible for sourcing, selecting, developing, and introducing new and existing product ranges that suit their stores and customer base. [The buyer’s] decisions are vitally important to the business: even the most well-known companies can run into trouble if their buyers get the products wrong.”
But who are these people and how did they get to where they are today?
Procurement is a fast-paced industry, having only come into its own in the last couple of decades. The path to a buying role in any procurement department and in any industry is still quite haphazard, with some employers looking for practical, hands-on experience, others looking for degree-level industry education, some wanting specific business-related qualifications – and many wanting a combination of all three.
Procurement is not a career for the lazy or faint of heart.
The majority of buyers sales team will come up against will be well educated, highly trained, very demanding and have multiple areas of expertise.
Education for procurement
For the most part, buyers have degrees related to engineering, logistics, supply-chain management and business management. Some employers prefer a research-heavy degreein humanities or science – and offer graduate training programs, so the company can create its perfect procurement machine.
Buyers are a driven bunch, so it would be no surprise to find an undergrad with an early eye on a future in procurement has chosen a degree in:
- business studies
- operations management
- purchasing and logistics
- purchasing and supply
- retail management
Some employers like to see ready-made buyers coming out with MSc degrees in niche subjects like:
- Procurement and contract management
- Operations and supply chain management
- Procurement, logistics and supply chain
In the UK particularly, a Chartered Institute of Purchasing and Supply (CIPS) qualification and membership, whether before or after a degree, shows an advanced understanding of purchasing and supply management as well as other essential issues which affect business – but buyers also need to show proven aptitude for making the theory work in real business environments before being hired
Skill sets for the procurement world
Buyer recruitment websites recommend purchasing manager applicants in the UK display a heady range of proficiencies:
- Good oral and written communication skills
- Strong analytical skills
- Commercial awareness
- The ability to adapt to different client needs and to develop and maintain successful working relationships
- An excellent standard of numeracy to analyse facts and figures
- A flair for negotiation and networking
- The ability to make important decisions and cope with the pressure of demanding targets and tight deadlines
- A confident and mature approach
- Tact and diplomacy
Even recent graduates must show considerable skills to apply for a buying position or graduate training program:
- Excellent commercial awareness
- An understanding and awareness of trends
- An entrepreneurial mind-set
- Brilliant organisational skills and the ability to think ahead
- Strong analytical skills
- The ability to communicate effectively at all levels
- The ability to take the initiative and make decisions that involve an element of business risk
Everyone agrees, from CEO and CPOs to recruitment officers and award judges, there is a clear set of skills needed, whatever industry the buyer works in. Numerical and analytical skills, excellent communication competence, creativity, innovation and flexibility rate highly.
Obviously not every procurement officer the sales team comes up against is going to be shooting for the stars, but they will all be beholden to the ever-present KPI.
Key performance indicators (KPIs) in the procurement department can be divided into six categories according to the Purchasing Procurement Center:
- General procurement with performance measurements ranging from ‘purchase amount as a percent of sales amount and company employees’ to number of suppliers
- Cost KPIs cover cost avoidance, cost reduction and ROI
- Quality KPIs check quantities of services or supplies returned, reworked and rejected against workable services or supplies.
- Delivery KPIs keep on top of availability, lead time index and logistics
- Inventory KPIs explore carrying costs, forecast of turnover and inventory activity
- Employee learning and development, from official certifications and qualifications to membership in professional bodies and ongoing training
While these KPIs are important against internal statistics and data, they are also checked against national and international benchmarks to ensure ongoing development and staying ahead of the game.
For all this pressure and expectation, education and assessment, what will the buyer opposite the sales team likely to be earning?
In the UK:
- Graduate entry-level salaries (possibly at purchasing assistant/junior buyer level with no prior purchasing experience) may start at around £20,000, or with some relevant experience, £25,000.
- Those who perform well can expect a fast promotion and salaries at a higher level or with further experience can range from £30,000 to £45,000.
- Senior managers and purchasing directors can expect to earn between £50,000 and £100,000 especially in large organisations.
A salary survey by the Chartered Institute of Purchasing and Supply (CIPS) reports that the average wage of a procurement professional is £42,000. It also states that salaries are highest in the private sector and in London and the South East. Professionals with MCIPS earn on average 22% more than those without accreditation.
In the US, the average procurement manager salary in March 2017 is $81,621, but can range from $22, 000 to $179,000.
How does this help the sales team?
Having a better understanding of where the procurement officer has come from and what is expected of them helps the sales team understand what the buyer in front of them needs and has to achieve on a business level. Knowledge is power!