The procurement function contributes directly to improving the profitability of the organization. The decisions made within the procurement function can have a direct impact on the overall organizational costs and performance. A well-managed procurement function can streamline the purchase process, save on raw material costs, and identify better sources of supply. A capable and efficient procurement team steers the procurement function toward higher productivity and efficiency. Procurement assessment tests can significantly improve the quality of the hiring process.
Outline of the Procurement function
Procurement is defined as a function that helps acquire the physical elements of the project. It forms the bridge between engineering and construction for achieving the overall goals of the project. The procurement process may be broken down into 7 steps, namely, quotation, bid analysis, purchase order, vendor management, receipt and inspection of goods, raising the invoice, and invoice approval/payment.
The major functions that happen in the procurement department are:
Material control: the quality and availability of the material impact the final quality of the product/service. Sourcing materials from trusted vendors with a good track record is important to maintain the quality of the material and final output.
Contract management: creating, managing, and approving purchase contracts is an important part of the procurement function. Efficient management of the contract from creation to payment ensures that quality material is delivered on time. Accurate documentation of the contract terms and conditions paves way for better regulatory compliance.
Purchasing: the procurement department is in charge of sourcing materials from vendors at economic rates. The procurement team also needs to keep a track of inventory and place orders much before the stock is exhausted. Making decisions on bulk purchase orders to avail vendor discounts is also a decision to be made by the procurement department.
Vendor management: establishing strong, long-term, and mutually beneficial vendor relationships is very important for the success of procurement. Efficient management of vendor relationships is important to ensure the timely delivery of quality material.
Must have Skills in Procurement Personnel
The nature of the procurement function is inching toward digitization and globalization. Procurement professionals need to update and upgrade their skills and capabilities to align with the changing procurement landscape.
Here are a few must-have skills that nurture procurement professionals toward success in their roles:
strong buyer-vendor relationships are the foundation for effective procurement. Procurement personnel needs to have strong interpersonal skills that help build relationships with vendors and employees within the company. These skills help build a strategic procurement function that understands the needs of colleagues and the organization.
Strong negotiation skills:
negotiating with vendors delivers real value to the business. Good negotiation skills enable organizations to achieve their business goals and also understand the needs of the vendor. Procurement personnel must be able to read people and identify when to compromise with vendors and when to stick to their requirements.
Time management skills:
the ability to deliver procurement at a time scale that works for the business is important to avoid productivity barriers and reduce downtime. Procurement personnel must be able to manage timescales efficiently and process requisitions and purchase orders to meet business deadlines.
strategic thinking is necessary to analyze beyond everyday needs, plan for potential future demands, keep up with market shifts, impact future demand on your business, and stay competitive.
Market research skills:
procurement professionals must stay updated on the latest market trends pertaining to the products/services that the business provides.
analytical skills are required to operate efficiently within diverse business environments and cultural contexts. Analytical thinking helps build long-term relationships with partners and fosters innovation and flexibility.
Roles in the Procurement Department
The procurement department is responsible for serving internal stakeholders by acquiring goods, supplies, and services required to achieve business goals.
The main roles in procurement are mentioned below:
Procurement analyst: procurement analysts are responsible for vendor analysis and communication, prospective vendor discovery and onboarding, RFP process optimization, cost forecasting, and historic procurement cost reviews.
Procurement manager: procurement managers work closely with internal teams and vendors to ensure the success of each procurement project. Vendor evaluation and risk assessment, project and process management, and contract negotiation and assessment are other duties of procurement managers.
Strategic sourcing manager: duties include conducting internal discovery of stakeholders, writing complex RFPs, and projecting the long-term effectiveness of vendors.
Director of the procurement: primary responsibility is to manage the procurement team. Review and approval of procurement projects, handling vendor disputes, and establishing key performance indicators, and goals for the procurement department are other responsibilities.
Chief procurement officer: establishing procurement policies, sustainability, digital transformation initiatives, and supplier diversity are some of the responsibilities of the CPO.
Online Procurement Assessments
Given the importance of the procurement function in the growth and sustainability of the business, hiring capable and skilled procurement personnel determines the success of the procurement function. Procurement assessment tests improve the effectiveness and efficiency of hiring. Online procurement skill assessment tests from SkillRobo empower HR to screen several profiles within a short duration.
Users can use the customizable skill library to create role-based tests like procurement analyst assessment tests, procurement manager assessment tests, strategic sourcing manager skill assessment tests, and many more. The test results are immediately available to the hiring team through the reporting and analytics feature in SkillRobo. Procurement assessment skill tests are objective, hence, enabling error and bias-free candidate evaluation.
Building an efficient and capable procurement team requires a solid recruitment plan for screening the right talent amidst scores of profiles. Online procurement assessment tests like the ones in SkillRobo facilitate the thorough evaluation of job-related skills, personality traits, and cognitive abilities of candidates. Candidates screened through procurement assessment skill tests are not only a good fit for the role but are also aligned with the overall organizational goals.
SkillRobo aids in the quick and efficient hiring of procurement personnel for diverse roles, from procurement analyst to procurement manager. To experience quick, easy, and effective screening of candidates.
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