7 KPIs Your Procurement Team May Be Ignoring!

Procurement bridges the gap between product, internal stakeholders and customers. Elements of that bridge include KPIs.

In order to support the weight of internal and external expectations, Procurement teams must be prepared to perform as a key value adder within an organization.

Meeting expectations at the door isn’t always the easiest task, especially when those expectations can be wide sweeping (example: minimize cost).

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Procurement (and Purchasing) Job Interview Questions & Answers

Procurement, or Purchasing, is an area of Supply Chain that involves and requires very specific skills and expertise.  This is particularly apparent if you are conducing a job interview and hiring a Procurement professional, you are looking for a  Procurement job,  you are looking to outsource anything, or you are dealing with Procurement people in the course of conducting business.  

Regardless of your position or situation it is highly valuable to understand  the type of interview questions, and answers, appropriate for Procurement and Purchasing professionals.    

Check out this list of 25 Procurement and Purchasing and Supply Chain interview questions and answers.

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Hey Procurement! It’s Time to SELL!

The Procurement, or Purchasing, function is considered by many to be a necessary but non-strategic part of any organization. But there is a profoundly significant Procurement value chain.

Study after study shows that this is a common view held amongst Executives and peer functions alike.

This is not to say that they believe Procurement doesn’t play a role, but rather that they don’t view Procurement as playing a critical role beyond cutting costs and finding suppliers.

Well here’s some news. Procurement is strategic!

Instead of waiting for others to realize that now is the time for Procurement professionals to make their value and contribution known.

Now is the time for Procurement to SELL!

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Procurement Outsourcing – Keep your Integrity!

Like so many professionals Procurement people are very proud.  They are proud of the job that they do and the contributions that they make.  And they are most always proud of their ability to negotiate and get the best deal!

But at some point in their careers, especially in the age of Outsourcing, they are likely to have to deal with potential suppliers who provide Procurement services.  Procurement typically negotiates deals for other functions like I/T, HR, Manufacturing and every other area in the company.

Now they are faced with dealing with companies who basically state that they can do a better job at negotiating and Procurement than they do.

In the face of such a perceived, direct challenge to your abilities how do you and your Procurement team deal with this professionally and with integrity?

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What is Virtual Procurement and Why Should You Care?

Any of this sound familiar?  Then you need Virtual Procurement!

“With recent minimum wage increases, I need to find better ways to control my costs and to stay profitable while still delivering the highest level of service to my customers.”

“We are too small and can’t afford to hire a full-time procurement person. We are busy and just don’t have the time to focus on procurement.”

“We hope for good prices, but we usually just accept what suppliers offer. We are leaving hard earned money on the table.”

“Contracts are stored in someone’s drawer or lost, never to be seen again. Contracts often expire leaving us scrambling.”

“Supplier relationships are too close. They don’t deliver on their promises. Communication is lacking or too casual.”

If any of these statements resonate with you, please keep reading.

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The Lumber Supply Chain is Going Against the Grain!

For a small building project I was planning I recently went to the local hardware store to pick up some 2″ x 4″ x 8′ boards. I had heard that the price of lumber had increased but I hadn’t paid that much attention to what was going on.

Until I went to the cashier, that is.

These boards cost over $12 Canadian, EACH! For another building project I worked on only a couple of years ago, my vague memory is that they were about $3-4 each. WOW!

I only needed a half dozen boards so the overall cost impact wasn’t that much in my case. But I could only imagine the enormous impact for people with much bigger projects, or for those building and buying houses.

What on earth was going on in the Lumber Supply Chain?

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Global Trends in the Metal Commodities Industry

According to the MSCI Industrial Metals Index, in the past year, the cost of both base and precious metal commodities has gone up by 21%. Procuring and trading metal is big business, especially if you are in the construction or manufacturing industries.

For commodities managers, there is the opportunity to make a considerable profit if you follow global trends. The metal commodities industry is driven by population growth, technological innovation and environmental regulations.

You should also consider that China, the leading county in manufacturing, drives demand, particularly for base metals. Keep your eye on the forecasts, follow the global trends, and you can improve your profits. 

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The Supply Chain Detective™ and the Inventory Turnover Mystery!

The company I had just joined went to market declaring that it was a world leader in Distribution and Logistics. That was a clear contradiction to the Inventory Turnover Mystery I was about to discover.

As I settled into the job and started learning, and studying, the various Supply Chain metrics I was surprised when I looked at the Inventory Turnover performance of the company.

Looking at recent and historical Inventory performance I could see that turnover always stayed around 5-6 turns with little variation. Everyone seemed content with the situation and unmotivated to make it better.

For a company that declared their world leading capability I was astonished. 5-6 turns? True leadership in this areas would require double digit turns.

I needed to figure out what was truly going on and get this Inventory Turnover mystery solved. This was another case for the Supply Chain Detective™.

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Seasoned Leadership in Action™ – An Interview with Renzo Francotto!

At Supply Chain Game Changer we believe in sharing experiences and expertise from people in every industry and from across the globe.  As such we have introduced our “Seasoned Leadership in Action™” Interview series at Supply Chain Game Changer. This interview is with Renzo Francotto, Principal and Independent Consultant at RF Proservices and Consulting Inc.

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Gainshare or Retain Share? Obstacles to Collaborative Cost Reduction!

When presented with cost savings opportunities by third parties, or by others within a company, too often those opportunities are turned down. Instead of sharing savings (gainshare) people would rather try to achieve the savings themselves.

Too often this myopic, “not invented here” mentality results in either the realization of little savings or, more likely, the failure to realize any savings at all.

Procurement teams must put their pride aside and understand that additional savings can accrue to them if they engage in gainshare partnerships instead of trying to horde all potential savings to themselves.

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Procurement Terminology is a Mess!

From one Procurement organization to the next, Procurement language and terminology differs.

Of course, it’s impossible to expect that every company would work within the exact same framework of understanding and messaging, but the lack of being able to communicate can sometimes be the difference between success and failure.

Procurement is a function, that is undergoing transformation; technologically and ideologically.

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Why Your Business Needs a Category Management Plan!

Businesses must be aware of several factors to remain competitive in today’s volatile market. A solid procurement strategy can help streamline and refine purchase decisions, ultimately improving the bottom line. A sound procurement strategy includes category management and a category management plan.

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Sourcing Priorities: Low Cost Geography or Domestic On-shoring?

For many years the predominant priority in sourcing has been finding the lowest cost possible. This paradigm has driven an incredible the movement of a tremendous amount of production to lowest cost regions such as Asia.

However the continuity of supply issues caused by the pandemic has created a call to repatriate much of this manufacturing into domestic, albeit higher cost, regions.

What is the appropriate sourcing strategy going forward?

Should you keep work in low cost geographies, establish sources in multiple geographies, or on-shore work into high cost domestic countries?

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What is Procurement’s Place in the Value Chain?

Where does Procurement stand in your organization’s Value Chain?

Hopefully, you’ll be able to formulate an answer to that question after reading this post.

I speak with Procurement, Sourcing and Purchasing professionals every day, from various globally functioning organizations, and there’s a resounding similarity in every one of those conversations…

Procurement is — still — largely viewed as a secondary activity in most organizations’ value chains.

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Total Cost of Ownership Procurement Model Failure – What’s Missing?

Many businesses use some form of Total Cost of Ownership model to support their Procurement and sourcing decisions. In fact these models are not just used casually, but they often are designed to inform and make optimal sourcing choices.

But many dynamics that we have experienced in the last few years suggest that these models are less than optimal. From chronic global Supply Chain breakdowns during the pandemic through to disruptions caused by outsourcing and single points of failure, sourcing decisions have been exposed as being less than ideal.

What is the current nature of these Total Cost of Ownership models, and what needs to change to make their use more robust and responsive?

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