Hiring High-Paying Purchasing & Procurement Roles | Aniday

1. What is Purchasing?

Purchasing refers to the organized acquisition of goods and services on behalf of the purchasing entity. Purchasing activities are necessary to ensure that required items are obtained promptly and at a reasonable cost. A dedicated purchasing department is especially important for a manufacturing company, where large quantities of raw materials and components must be regularly sourced. The main goals of a purchasing department include:

- Identifying suppliers capable of providing required goods and services to specifications.
- Purchasing items that meet the quality standards of the buyer.
- Creating an inbound supply flow to the buyer's facility to minimize inventory investment while still ensuring goods are available as required.
- Minimizing cash invested in inventory holdings.

Common purchasing activities include:

- Receiving and verifying purchase requests from the company.
- Searching for qualified suppliers capable of meeting buyer needs.
- Preparing and issuing requests for proposals (RFPs) to qualified suppliers.
- Evaluating supplier responses to RFPs, selecting a winner, and negotiating contracts.
- Issuing purchase orders to allow purchasing from suppliers. A master purchase order may be issued when there are multiple planned deliveries as per a buying agreement.
- Managing longer-term contracts.
- Reviewing open purchase orders to see if any should be closed.

2. Roles and Responsibilities of Purchasing

At the head of the purchasing department is a purchasing manager who supervises staff and works closely with executive managers to plan and oversee budgets. The purchasing manager must communicate closely with department heads to better understand their needs and the purchasing department's role within the company. For example, a purchasing manager for an online retailer would need working knowledge of how the company's network servers operate business processes.

Buyers, procurement agents, and purchasers all work under the supervision of the purchasing manager. Their duties and responsibilities may vary depending on the organization's scale and priorities. A procurement agent for a pharmaceutical company may focus on purchasing the chemicals used in manufacturing specific drug varieties. A procurement agent for a mortgage brokerage may handle procuring goods and services ranging from necessary office supplies to vehicle leasing.

The purchasing or procurement director runs the purchasing department. These highly trained professionals are responsible for building effective procurement strategies, sourcing cost-effective transactions and vendors, and managing the supply chain from initial request to invoice payments. They evaluate and purchase raw materials, products, and services while creating strategies to reduce costs and meet company goals. A typical purchasing director job description includes skills in negotiation, supply chain management, enforcing compliance, and analyzing financial proposals and reports.

Key responsibilities include:

- Communicating the value of supply chain and procurement strategies to company stakeholders, department heads, and executives to gain the necessary buy-in for appropriate resources and investment.

- Working with stakeholders to establish feasible, cost-effective sourcing goals and strategies.

- Evaluating, selecting, and successfully implementing a comprehensive procurement software.

- Establishing and enforcing procurement policies and procedures.

- Evaluating and selecting vendors the company will do business with. This includes product quality checks, pricing, and delivery timeframes, then deciding which vendor best fits the company. Vendor evaluations are an ongoing project, updated with each contract and shipment to ensure standards stay met and goods and services continue meeting timelines and requirements. To keep evaluations accurate and comprehensive, purchasing managers attend trade shows, interview vendors, and visit supply/distribution centers.

- Analyzing and comparing financial reports and pricing proposals from several reputable vendors before negotiating terms and pricing to get the best deal for the company.

- Training staff on product quality requirements, how to determine when a product is unacceptable, and actions to take when quality standards are not met.

- Contract monitoring to ensure vendor expectations are met and invoices are approved and paid promptly.

- Making any necessary adjustments or changes to current contracts.

- Tracking all ordered and received goods and services, and maintaining accurate inventory records including pricing details, performance, and deliveries.

- Ensuring procurement practices meet company goals and compliance requirements.

3. Required Skills for a Purchasing Role

Becoming a successful Purchasing Manager is no easy feat. The role requires them to possess a variety of diverse skills to excel in the job. Here Aniday lists eight of the most important:

• Judgment and Decision Making - is essential to achieve professional procurement certification. As a buyer, you'll need to evaluate your decisions through process rather than just random events.

• Attention to Detail - To become a successful procurement professional, you'll not only need to be detail-oriented but also able to spot intricate details buried within details. For instance, just a small difference can make a product a huge hit or a total disaster.

• Prioritization - To thrive in the purchasing field, you'll need the skill of prioritizing activities. For this, you'll be able to quickly assess worst-case scenarios and rank tasks immediately needing addressing versus ones that can be put off for later.

• Persistence - The purchasing role demands you push through problems from every angle until finding the right path for your production goals. Therefore, persistence is an important skill required of buyers.

• Flexibility and Adaptability - Market fluctuations in product design changes can have instant ripple effects across all areas of your business operations. Your role requires bending and adapting to these unexpected twists.

• Relationship Building - Relationship building is a vital skill every procurement professional needs to develop and cultivate. Building and nurturing relationships can help leverage situations to your full advantage. Additionally, you'll be able to regularly refresh connections to leverage those connections.

• Negotiation - Negotiation skills don't just mean the ability to purchase things at the lowest price possible. It also includes conveying quality, delivery dates, future relationships, etc. A skilled negotiator can achieve the best value from sellers while still maintaining a good ongoing business relationship with them.

• Integrity - Integrity is arguably the most important requirement in most professions; in procurement, it assumes even greater significance. Integrity simply means saying what you mean and doing what you say. Integrity allows people to depend on you. This in turn will help you earn respect both within and outside your company.