The services and raw materials any business needs have a cost attached to them, and deciding between vendors, products and services calls for careful evaluation, as purchasing decisions have a massive impact on profitability.
To lower costs and increase the value of each purchase, many businesses have a strategic sourcing manager. This role involves making purchasing decisions, negotiating, networking, setting up policies and outlining goals. A strategic sourcing manager also defines the company’s major sourcing initiatives.
A strategic sourcing manager is both a leader and a purchasing professional. This person sets strategies on with vendor assessments and negotiations to make certain purchased goods or services provide optimal quality and value, as well as arrive on time. This job involves determining if products should be sourced through a single vendor or through several vendors. The strategic sourcing manager works with internal stakeholders to determine supply and demand trends, and assess financial data based on overall cost of ownership to locate opportunities for reducing costs.
Someone in this role must also build all kinds of relationships. To be able to expedite the purchasing process, a strategic sourcing manager builds relationships with key suppliers. These relationships with suppliers allow for continual improvement in overall sourcing strategy.
These relationships are also crucial when the time comes to negotiating deals and contracts. A strategic sourcing manager must negotiate pricing, order size and delivery schedules. If anything changes in the process, a sourcing manager must lean on their existing relationships to renegotiate contracts or find new suppliers in a pinch.
Once a deal has been negotiated, the sourcing manager drafts a contract to be examined by both parties. This work should be done in conjunction with company legal representatives to include all of the key specifics. As soon as the contract is finished, a sourcing manager submits the necessary paperwork and handle various aspects of the contract.
An expert strategic sourcing manager has an in-depth understanding of their commodity industry. They have to know the ins and outs of their market to effectively source it. They also know all the big players and suppliers in their industry.
Most companies require a bachelor’s degree for their strategic sourcing manager positions and cite a preference for a master’s degree. For some companies, this degree should relate to the commodity market the manager will be working within. For instance, a manager sourcing electrical components might need to have a degree in electrical engineering. Some companies may simply have someone with a degree in business administration
Most employers also prefer applicants to have 8-10 years of experience in sourcing or manufacturing. Some employers prefer applicants are certified through the Institute of Supply Management (ISM) as a Certified Purchasing Manager (CPM) or a Certified Professional in Supply Management (CPSM).
Employers also typically say the ideal candidate has strong analytical, communication, negotiation, leadership, project management and interpersonal skills, as well as a strong work ethic and passion for the industry.
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