What Does a Procurement Specialist Do?
If you are a business owner, this news won’t be anything new to you. From Apple to Oral B, to the next-door grocery store, all the businesses run on the basis of a product or a service. To make sure these products and services are aligned to meet the end goal, a business needs a specialist's supervision.
Procuring assets for a business needs a lot of juggling. From keeping a track of the math of inventory, to dealing with suppliers, a business needs it all.
A procurement specialist is a trained professional who can run the entire process to get the most efficient results. The specialist here is an expert in managing the entire process. Let’s understand the role of a procurement specialist better.
In the article you will learn more about:
- What is procurement?
- What are the essential steps of a procurement process?
- Who is a procurement specialist?
- What is the need for a procurement specialist?
- What are the responsibilities of a procurement specialist?
- 7 key skills for a procurement specialist
What is Procurement?
Procurement is a process of activities required to source raw material, assets, and services to ensure the business is carried out smoothly. It is a 7 step process that leads to the final sales making a smooth process for the business. The process helps in carrying out large-scale purchases with an organized system.
A business cannot survive without a procurement process. While with a small scale business, the business owner or any employee may carry out the process but the case is not the same for a large scale business. A large-scale business requires a large sum of inventory and assets. To make sure the needs are fulfilled in an efficient way, the business requires a procurement specialist. This expert not only ensures supreme quality of purchases but also ensures a cost-effective procurement process.
Let’s have a look at the procurement process to understand the role of a specialist better.
What are the Essential Steps of a Procurement Process?
Let us look at the essential steps of a procurement process:
Identification of Requirement
Until a business is aware of the requirements, a procurement process cannot be carried out. Following the process, the inventory team analyses the inventory manually as well as through the records to understand the present requirement of the business.
The staff on the other hand mentions the requirement of software, and assets required to carry on a seamless flow of business. All the requirements are recorded and forwarded to the procurement team.
The procurement team then begins with the process.
Cross Checking to Prepare Requirement Draft
When the requirement is recorded, it is sent to the procurement team. The procurement team then cross-checks the requirement with the records of previous procurements to analyze if they need to procure the requirement or not.
They assess the procedure on the basis of a few metrics set by the system. The team also cross-checks the requirement with inventory and assets. Once the requirement draft is assessed and approved, it is passed on to the finance team.
Analysis of Requirement Draft
In the third step, the draft reaches the procurement and the finance team. The procurement team runs it through a check. The last recorded procurement entry of the items on the list is checked.
Once the procurement team is thorough with the requirement, the draft is passed to the finance team. The finance team then checks the bandwidth of the existing budget that can accommodate the new requirement. The finance team ensures the requirements in the draft are fruitful for the business. Once the team is sure, the budget is passed for the requirement. The procurement team then continues to the next step and the next phase of the procurement process.
Finding a Suitable Supplier
The next step after approving a budget and the requirement draft is to find suppliers. The procurement team calls for quotations from different suppliers. The team then analyzes and finds the most suitable supplier for the requirement. The team takes an inspection on the quality of supply and services, cost, cost-effectiveness, delivery time, etc.
The team picks the supplier that is most suitable for business goals, budget, and high-quality supplies.
Negotiating the Price
Negotiation is an important step of procurement. One of the most important and primary goals of procurement is to save as much cost as possible. This is possible with the right negotiation. The procurement team negotiates the cost of the supplies with the selected supplier. Once the team approves of the cost of supplies, they negotiate for the terms and prepare a contract. The term of the contract depends on the kind of procurement the business wishes to carry out.
Inspection of the Supply Received
The sixth step in the process is to receive and audit the supplies. The team runs an inspection to check the quality of the supplies and errors. The steps help the team in filtering the errors in supply. The step also marks the efficiency of the supplier. This helps the team in essentially understanding if the supplier is the best fit for the business or not.
Approving Invoice and Making Payment
Approving invoices for payment is the last step in the procurement process. After the supply is inspected, the supplier generates an invoice. The finance team then takes an audit of the invoice. A thorough inspection ensures a business is not being charged falsely.
After the invoice is approved, the finance team initiates the payment and marks the end of the procurement process.
Who is a Procurement Specialist?
Now that you know what procurement is, it is also important to understand procurement management.
A procurement specialist is someone who carries out procurement management to ensure profit for the business. As the name suggests, this position is for a person who is an expert in business procurement. The person can be an expert of the traditional vertical, digitized vertical, or both at the same time as well.
A procurement specialist invests time and effort to learn the subject of procurement in-depth in order to bring efficiency in the flow of the business. Like we discussed above, every business runs to sell services or a product, thus needs procurement. And a profit-bearing result-oriented procurement process can only be carried out by an expert called a procurement specialist.
The concept may still look vague to you. To understand it better, let’s understand the need of a procurement specialist for a business.
Why Does a Business Need a Procurement Specialist?
Procurement that you know by now, is an elongated process. It involves multiple folds of tasks and management. The process involves crazy dealing with math and numbers, suppliers and laborers, relationship management, vendor reporting, manual inspections, and whatnot.
A procurement specialist is thus needed by a business to take calculative measures and steps throughout the process.
Expertise
A procurement specialist is a subject expert. The person in the position would have gained experience over the years of running a swift process. This not only ensures safety for the business but also brings in a lot of additional benefits.
A specialist is well versed with
- The practicality of carrying out a procurement process
- Maintaining relationships with supplier
- Escaping frauds
- Maintain the efficiency of the project
- Keeping the process cost-effective
- Working to meet the goals of the organization
- And a lot more
Knowledge
Considering the entitlement of an expert, the position is for a person who has the needed knowledge to carry out a procurement process. The specialist is in charge of supervising the entire process. The person in the position also has the power to reinforce knowledge to profit the business out with it. The professional in the position has the knowledge of
- The right quality of supply material
- Where and how to boost the efficiency of the process
- How to call suitable suppliers for quotation
- How to ensure the requirement is correctly drafted
- How to ensure the budget is being invested in the right place
- And a lot more
Training
With a lot of experience comes a lot of training. A procurement specialist is capable of training the entire procurement team. The employee in the position has gone under training to carry out a highly productive procurement process.
A procurement specialist can benefit the business through training by
- Reinforcing better tactics to process the inventory
- Guiding the procurement team to be more efficient
- Teaching and using the right negotiation techniques
- Teaching and carrying out the apt process to select the right supplier
- Guiding with the essential supply inspection process
- And a lot more
What are the Responsibilities of a Procurement Specialist?
Procurement is an essential part of a business. From saving on variable cost to ensuring high returns in the form of the gross profit everything is derived through the procurement process.
A procurement specialist is appointed by a business to make sure that the procurement process fulfills the goals of the organization. Procurement specialists also take care of contracts that are needed to carry out a procurement process. They are responsible to work on a lot of tasks that add to the supply chain.
There are a lot of responsibilities a procurement specialist has to take on. While a lot of these responsibilities are minor ones, here are 7 of the most important responsibilities of a procurement specialist.
Analysis
The first step of procurement is to draft the requirements for the business. The responsibility of the procurement specialist is to analyze the requirement of inventory control and services. After the inventory team is done drafting a requirement, it is the responsibility of the procurement specialist to check if the requirements are apt. The requirement draft is only forwarded and approved once the procurement specialist takes a thorough check on the inventory and assets in hand.
Market Research
Every organization has goals and objectives. The procurement process is a part of a supply chain that ultimately runs the business. Along with increasing net sales, meeting goals is the primary responsibility of the procurement process and thus the specialist. To fulfill the requirements procurement specialist carries out thorough market research. This helps the professional in understanding the market better in sync with the needs and goals of the business.
Cost Analysis
The prime motive of a procurement process is to save as much cost as possible. The procurement specialist is a trained professional working to meet this objective for the organization. The specialist takes out a cost analysis to ensure the right budget for the supplies. This also helps the specialist to onboard the suitable supplier. The cost-effectiveness comes with appropriate quality of supply falling in the right budget. The right supplier can ensure both can only be identified with cost analysis by a procurement specialist.
Communication
Procurement processes can only be successfully carried out with a fruitful relationship with suppliers. The process also requires a healthy relationship internally with executives and employees within the organization.
It is the responsibility of a procurement specialist to maintain relationships with suppliers and internal staff. A smooth channel of communication can ensure a healthy relationship. This is long-term helps the business in expanding the network of suppliers and make connections in the industry. A systematic channel of communication also makes it easier for the supplier to reach the specialist anytime it is required.
Negotiation and Contracting
Negotiation is a vital aspect of the procurement process. It ensures cost-effectiveness for the supply and binds both the business and the supplier in a safe transaction.
The responsibility of a procurement specialist is to negotiate the cost of the supply and the terms of procurement. The terms include the time required, the channel of communication, the payment method, etc. The specialist negotiates on these terms with the suppliers. Once the terms are settled, the specialist prepares a contract to ensure stability and security at both ends.
Expedition
The second last step of a procurement process is to receive the supply and take a thorough inspection of it.
The responsibility of the procurement specialist is to carry out the inspection. First, the specialist receives the shipment, then records the delivery, and ensures the fulfillment of the order. If the order is not fulfilled, the specialist is the one who executes the terms in the agreement. With a thorough inspection, the specialist also ensures the supplier has committed no errors. If there are errors, suitable steps as per the agreement have to be executed by the specialist.
Supplier Liaison
The supplier is the connecting link between the organization and the suppliers. It is the responsibility of the supplier to keep the show running while keeping suppliers and businesses on the right terms.
The procurement specialist can be a permanent employee or it can be a person hired on a contract for a limited period of time. In both cases, the specialist acts as a link between the supplier and the organization.
7 Key Skills for a Procurement Specialist
As per the world, the two most important skills a procurement specialist need is cost-saving and ensuring the fulfillment of the requirements. While these still stay vital, there are a few more skills that are needed with the advancement in the processes.
Here are 7 essential skills for a procurement specialist -
Holistic Management of Risks
Risk management is a factor that can secure the business from falling into traps and losses. The procurement specialist should be skilled enough to take a holistic approach to manage the risks. A high effective channel or system should be prepared. The entire procurement team should be trained as per the system. And the system should be included as a constant process rather than at the time of emergencies only.
Ensure Sustainability
Traditionally, the procurement process is primarily aimed at saving the costs for supply. This objective still remains as a primary goal along with enhancing sustainability induced in the process. This means the business needs continue engagement with the same suppliers.
Inviting new suppliers for each procurement cycle leads to overspending of resources. This means the cost involved in the process increases. The procurement specialist thus should have the skills to create patterns that establish and enhances the stability of a business. The system should include better communication, enhancement of relationships with other companies and suppliers, and the right usage of the supply.
Enhance Supplier Relationship
To establish a sustainable relationship, it is necessary to enhance the relationships with suppliers. Suppliers are the whole and soul of the procurement process. Connecting with a different supplier for each procurement cycle can prove to be more derogatory for the company than being profitable.
Communication skills play the needed role here. The better the communication channel between the supplier and the specialist is, the enhanced the relationship would be.
Involved Digitized Systems
Traditionally, the entire procurement process was carried out manually. There are a lot of companies that still follow the same procedure. However, a manual procurement process can offer opportunities for errors and low efficiency. It will also be a barrier in large-scale procurement.
To ensure fewer errors and more efficiency in the process, the specialist should be skilled enough to digitize the process. The specialist should be open to involve digital systems and be able to train the procurement team to use these systems for a better flow of work.
Learn Financial Skills
A procurement specialist is supposed to be an expert on the subjects that are included in the procurement process. While there is an entire financial team working with the specialist, the specialist itself should develop financial skills and knowledge as well.
This helps the specialist in understanding the budget and marking the requirement accordingly. It also helps the specialist in picking an appropriate supplier for the procurement cycle as per the financial angle.
Increase Transparency
The procurement specialist should be well versed in the notation of transparency. As per government instructions, a company has to keep the procurement process transparent legally. The procurement process can be extensive and involve multiple folds of tasks. This involves a lot of employees and outside entities in the process.
To make sure everyone is working in sync and the process is moving in the right direction, the specialist has to set metrics or KPI to increase transparency in the process.
Analyze KPIs
KPIs are the analyzing factors that assess the process and grades how well the process is working. If the process is not giving out desired results, the specialist can use various KPIs to understand the problem and take corrective measures against it.
As the company keeps working with various supplies and procurement cycles, the specialist should be skilled to create new KPIs to monitor the growth and effectiveness of the process.
How can Deskera Help a Procurement Specialist?
An error-free procurement process is a way to make business more money. Following traditional manual procurement management and tactics will only make the business commit mistakes and errors. As a procurement specialist, the expert is the one taking all the decisions and running the show. Deskera can help the procurement specialist in converting the procurement process of a business from manual to digital.
Manual procurement management can be messy and inefficient. A lot of businesses traditionally carrying out procurement management experiences a lack of cost saving, inefficient work processes, and weak relationships with suppliers.
Deskera Books offers auto journal entries for every transaction made by the business. Acting as an aid for procurement specialists, the software helps in keeping track of the inventory with just a few clicks.
Deskera CRM helps a business in generating leads and with email marketing. A procurement specialist can use these features to maintain a healthy communication channel with the network of suppliers and the executives within the company. Deskera CRM will help you in maintaining customer relationship management by assisting you in contact and deal management, email marketing campaigns, sales pipeline, and customer tickets.
Deskera is software that provides a solution for a business to carry out tasks smoothly. The software is a proficient record management system that gives power to the procurement specialist to maintain records hassle-free.
To enhance the entire system, Deskera offers multiple software and tools. Deskera Books is the greatest software to keep a track of inventory. The software allows automatic loss and profit entry in journal books of the business. The journal entry helps businesses in keeping better records.
It also has an advanced inventory management system that can keep a track of the multiple warehouses, stock transfers and adjustments and bills of materials to mention a few functions.
Deskera offers automated inventory management features among others. The software offers HR, attendance, customer relationship management, and payroll management. This makes procurement management simple by keeping easy track of the employees of the business.
This system also ensures timely deliveries to your customers by keeping real-time track of your inventory, reminding you of the activities that need to be done and also sending out invoices on time.
It plays a vital role in digitizing customer service and keeping track of customer service metrics. Together, all of this will improve customer satisfaction and experience and therefore improve customer retention as well as encourage returning customers.
Key Takeaways
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The procurement process is a process that fulfills the requirements of the business while saving costs.
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The procurement process requires a procurement specialist to carry out management.
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A procurement specialist has a lot of responsibilities with an end goal of meeting the objectives of business efficiently.
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There are 7 essential skills a procurement specialist requires to carry out the procurement process to benefit any business.