9 Procurement Skills You Need To Know

Summary

The video discusses nine essential procurement skills that remain crucial despite advancements in AI, especially for digital procurement professionals in 2024. These skills include strategic sourcing, supplier relationship management, data analysis, contract management, proactive risk management, negotiation, technical proficiency, change management, and communication. While AI enhances procurement, deep expertise in these areas is essential for managing suppliers, reducing costs, and driving innovation. The speaker emphasizes that successful procurement professionals need to master both traditional skills and adapt to new digital tools for optimal performance in the evolving industry.

Takeaways

• 🔍 Strategic sourcing is essential for finding the best suppliers at the best total cost through a competitive and in-depth procurement process.
• 🤝 Supplier Relationship Management (SRM) is crucial for effectively segmenting suppliers, focusing on the top 10% for maximum value and nurturing relationships with others.
• 📊 Data analysis is becoming easier with generative AI, but procurement professionals must still understand how to use data for insights and decision-making.
• 📄 Contract management is a fundamental skill, yet many professionals struggle with it. It's important to manage contracts both before and after signing.
• 🚨 Proactive risk management is key to identifying and mitigating risks before they become issues. Procurement professionals need to move from reactive to proactive risk management.
• 💬 Negotiation remains an essential skill, as professionals need to understand when to push, relent, or walk away to get the best deals for total cost of ownership.
• 💻 Technical proficiency in digital procurement tools is becoming a foundational skill for procurement professionals in the future.
• 🔄 Change management is vital for influencing and driving positive change within organizations, especially as procurement must adapt to stay relevant.
• 🗣️ Communication skills across all mediums (writing, speaking, video, digital platforms) are essential for conveying procurement's value and needs within diverse teams and with suppliers.
• 📈 The procurement profession needs to embrace change and digital transformation to remain relevant, with a focus on continuous learning and adaptability.

Q & A

What is strategic sourcing, and how does it differ from traditional purchasing?

Strategic sourcing is about finding the best supplier at the best total cost by analyzing the market and considering factors such as contract terms, cost of ownership, and procurement efficiency. It differs from traditional purchasing, which involves selecting suppliers based on simple price quotes, often without in-depth market analysis.

What is the importance of Supplier Relationship Management (SRM) in procurement?

SRM focuses on the segmentation and management of suppliers, with an emphasis on building partnerships with key suppliers. By focusing attention on the top 10% of suppliers, companies can foster innovation and collaboration while maintaining efficient relationships with the rest of the supply chain.

How is data analysis becoming easier in procurement?

With the rise of generative AI (gen AI), data analysis in procurement is becoming more accessible. AI can quickly analyze trends, risks, and supplier performance, simplifying tasks that previously required more manual effort, while enabling procurement professionals to make data-driven decisions.

Why is contract management considered a fundamental procurement skill?

Contract management ensures that procurement professionals manage supplier agreements effectively from pre-signature to post-signature. It involves understanding terms, mitigating risks, and ensuring that both parties adhere to the contract to avoid issues that could arise later.

What is proactive risk management in procurement, and why is it important?

Proactive risk management involves identifying potential risks before they occur, as opposed to reactive management, which deals with issues as they arise. This approach allows procurement professionals to prevent disruptions, minimize risks, and ensure smoother operations.

Why is negotiation a critical skill for procurement professionals?

Negotiation helps procurement professionals achieve the best total cost of ownership with suppliers. It requires experience and understanding of when to push for better terms, when to compromise, and when to walk away from deals that aren't beneficial.

How does digital proficiency impact modern procurement practices?

Digital proficiency is increasingly vital in procurement as organizations adopt digital tools for process automation and optimization. Professionals need to understand how technology can enhance procurement efficiency and effectiveness to stay relevant in the evolving landscape.

Why is change management an essential skill in procurement?

Change management involves influencing and guiding positive changes within an organization, which is crucial as procurement must adapt to new technologies and practices. Effective change management ensures that all stakeholders are aligned and engaged throughout the process.

How do communication skills play a role in procurement success?

Strong communication skills are essential for effectively conveying procurement's needs, value, and initiatives across all levels of the business. Procurement professionals must communicate clearly across different platforms and cultures to build strong relationships with both internal and external stakeholders.

How do the procurement skills of the future differ from traditional skills?

While traditional skills like negotiation, contract management, and supplier relationship management remain important, future procurement professionals must also master digital proficiency, data analysis, and change management to leverage new technologies and drive innovation in procurement.