One of the most contentious issues in the Brexit debate was the question of cross-border trade with the EU. Would companies manage to transport goods freely across the channel after Brexit? There was uncertainty around the Dover-Calais route, and fears that parts of Kent would be turned into virtual lorry parks. In January, news reports told us of fresh food supplies going rotten in delayed transit and red tape adding extra layers of complication and cost to companies already struggling in the pandemic.
These issues have highlighted the importance of robust and flexible supply chains, and the role of procurement in making businesses more stable, especially in a difficult trading environment. After all, if a company can’t get its materials for the manufacturing process, or distribute its goods to customers, the hold ups can be catastrophic. In the car industry, for example, component delays will halt entire vehicle production lines.
I spoke with Mark Andrioli, International Sourcing Director of Optimas Solutions Ltd, to find out more about a career in Procurement and the essential role it plays in business.
What exactly is Procurement?
Procurement (also known as Sourcing or Strategic Sourcing) is the function that is responsible for buying in goods and services and managing the supplier base of a business. These may be direct goods (materials and components that are involved in the production process) or indirect (the goods and services that help a business to run, such as insurance, IT systems and utilities). Procurement is sometimes viewed synonymously with purchasing, but there is a difference. Purchasing is primarily transactional, whereas procurement is about managing and developing the supplier base to deliver better performance and cost savings for your business. Procurement can sometimes sit as a standalone department, but increasingly in modern businesses, it is integrated and embedded within different business functions.
What Does a Procurement Director role involve?
A procurement director is ultimately responsible for the selection and management of suppliers to ensure the strategic goals of the business are met. Each company will have different factors at play when selecting and retaining suppliers. The procurement director will be responsible for running tenders or bid processes, involving identifying and evaluating bidders and finalising contracts. Price will always be a major driver in supplier evaluation, but other considerations will include quality, reliability, speed of delivery, flexibility, ethical and environmental factors and legal compliance. A procurement director will work closely with other business functions, such as finance, product development, sales, marketing and operations, to understand their needs and wants and align it with procurement strategy. Additionally, they will oversee a procurement team, who will be responsible for particular suppliers, business partners and/ or product categories.
What Skills Are Required to Work in Procurement?
A procurement professional must have excellent stakeholder management and communication skills, to be able to work and build relationships across different departments and teams, both internally and externally. They must have good business and financial acumen, teamworking and negotiation skills. Modern supply chains are complicated global networks, which need to be carefully and strategically managed. It is increasingly important for a procurement professional to know why and how to extract and analyse data from different systems to gain insights into supplier performance and identify opportunities for improvement. Good technical knowledge and the ability to understand technical information is important within manufacturing and engineering organisations.
Why should a graduate consider procurement as a profession?
You will develop a great understanding of how a business works, across many functions. There will be opportunities to travel, visiting suppliers at home or abroad. In recent years I have visited business partners in China, Mexico, the USA and all across Europe. You will develop core business skills such as negotiation, data analysis, team leadership and project management. Any company with a significant third party spend will have a procurement function, so you can choose to work in any sector, from automotive or pharmaceuticals to food production and financial services. Large public sector organisations such as the Civil Service and the NHS have huge procurement functions. The skills that you develop as a procurement professional are transferrable, so you will have the chance to develop a varied career across different sectors, if you so wish.
What advice and tips can you give?
Develop a knowledge of the industry or sector you wish to work in. Keep up to date with market trends and business news. Look for placement or work experience opportunities that enhance your skillset. It may be helpful to join the Chartered Institute of Purchasing and Supply (CIPS) In addition to networking events and webinars, CIPS offers a range of qualifications, up to a Level 6 Professional Diploma in Procurement and Supply with MCIPS status. If you’re interested in finding out more about Procurement, or considering it as a career, you might find this job profile on the Prospects website helpful