NPA's Top 6 Procurement Skills
and why procurement requires more resources and time than you think
Today's Procurement professionals face an ever growing list of changing requirements and expectations in order to support their organisations.
Combine this w
ith the ever increasing "do more with less and do it faster" mentality these areas also highlight the risks organisations take when they short staff / short cut their supply chain groups and processes.
Supplier Relationship Management (SRM)
Every experienced procurement professional knows that SRM is one of the
most important skills
to drive
long-term value
for any organisation. Managing this well results in
lower overall cost
, better customer service,
increased efficiency
, less price volatility,
better quality
, increased supplier led innovation and
continuous improvements
. Soft skills such as communication, influencing, leadership, change management, and an ability to get the best outcome for your business in any negotiations without damaging your long term relationships are essential for continuous value creation.
It's
as important as
effective
Business Development,
as Cost Of Good Sold (COGS) represents typically the
largest spend in Hardware companies
, specifically with outsourced manufacturing. Not spending sufficient time to manage this well typically causes volatile and unpredictable supply chain environments.
Understanding Cost vs. Value
It's easy to just pick the
lowest price supplier,
but looking beyond the purchase price and
understanding what other value
a supplier can bring to your organization, such as Life-cycle/Total Cost of Ownership (TCO), Quality,
Tax/Tariff implications, Ethical, Social, and Sustainability
while taking into account the
global economic climate
is an important skill required to make the best decisions for your business.
This topic typically also requires excellent communication skills to convince your other business stakeholders to look beyond just the purchase price.
Company Goals
Aligning and adapting procurement goals
with the wider organisation goals, such as KPIs, Targets, etc. is imperative
to achieve overall business success
. Understanding the internal dynamics and
when to challenge vs. give
is a skill that demonstrates maturity and leads to respect when it counts.
Keeping in mind that goals/targets are often fluid and can quickly change with organizational changes or economic influences it's important to remain flexible and communicate in simple and well understood terms and not specific procurement jargon to ensure all stakeholders understand how your procurement related activities contribute to the overall success.
Research & Market Intelligence
Performing frequent industry research and keeping your knowledge
up to date
is absolutely essential in having good
market intelligence
available in order to keep
costs down,
mitigate and
anticipate risks
and
predict future disruptions
.
Conducting good research is a critical skill and takes time, patience and curiosity, especially if you do it via desktop research, through your supplier network and your procurement ecosystem. Good third partly intelligence providers can be a great asset but are often cost prohibitive for smaller companies or startups.
Data Analysis / Forecasting
Having good data available and being able to
analyze it,
visualize and
communicate
it
efficiently
is another key skill needed to guide decision making and reduce supply chain risks, evaluate supplier performance (cost, quality, service),
predict future demands
, identify new opportunities and
drive cash flow
improvements.
This activity can be specifically time consuming in companies that don't have systems or processes in place to track supplier data (i.e. ERP systems, etc.) and much of the data needs to be manually captured and analyzed via excel.
Data Analytics software tools are great for supporting this activity but require good, comprehensive and consistent data inputs that's often not captured at startups or smaller companies.
Strategic Thinking
Stepping back and
taking the time to look at the broader picture
of a situation rather than just focusing on the tactical aspects and getting the immediate problem solved
is not always easy to do
, especially in under-resourced teams.
Strategic thinking and behaving strategically is an important skill in avoiding repeated issues and
identifying opportunities for overall better solutions
.
If you need qualified procurement support, contact us!
