procurement specialist interview questions

The basis for determining an organization’s purchasing patterns is conducting a spend analysis and building a spend profile. A well-done spend profile will reveal things like the amount of money your organization spends on each category of goods and services it purchases, the amount of money spent with each supplier, changes in spend over time, and other valuable information. Further analyzing that spend can help you determine opportunities for implementing cost savings practices like supplier consolidation, strategic sourcing, and standardization. Spend analysis can be conducted using a variety of tools, from deploying the most cutting-edge source-to-pay software to using PivotTables in Microsoft Excel spreadsheets.

Price comparison is easy when you are buying a standard product that is offered by multiple suppliers. You have easy access to price data points for comparison. But, when you are purchasing a customized product from a single source, you do not have the luxury of multiple price data points. Therefore, you need to use other techniques. One of those other techniques is using a “should cost model.”

Raw purchasing transaction data can take up a lot of space on a screen or in a report. It can appear useless. But, modern technology can help you transform that data into information and intelligence. And you don’t need to purchase an expensive procurement technology suite to do so. Microsoft Excel offers many functions that can be very useful for analyzing raw purchasing transaction data. From simple sorting and subtotals to using PivotTables, you can conduct a very thorough spend analysis using Excel alone.

Historically, there has been a gap between what procurement professionals consider to be “cost savings” and what executive management considers to be cost savings. You see, executive management uses standard financial statements as their “scorecard” for the business. Some procurement professionals have never made an effort to understand how financial statements work. Therefore, they have a difficult time reporting cost savings in a way that people using financial statements will consider legitimate. To define cost savings in a way that will be embraced by executive management, you need to communicate cost savings in a way that can be reconciled with data on the organization’s official financial statements using the “language of accounting.”

When it comes down to it, you can look at just two aspects of spend to determine whether a category is ripe for producing cost savings in a short time frame: effort and impact. You can create a quadrant representing the four combinations of these two factors. All categories of spend identified in your spend analysis should be assigned to one of these quadrants. The categories of spend with low effort and high impact should be the first ones considered if you had to produce cost savings in a short time frame.

There are a great number of remedies you can use to deal with a supplier’s failure to perform. The key is to know which remedy is appropriate for each situation and to contractually apply that remedy properly. For example, two available remedies are cover damages and contract termination. Cover damages involve you collecting from your contracted supplier any premium you had to pay to another supplier to enable you to require from the contracted supplier’s failure. Termination enables you to cancel a contract completely with a supplier. If there was one small failure in the middle of a massive and important five-year contract with a great supplier, would you want to completely terminate that contract? Probably not. In that case, cover damages would be a more appropriate remedy as your organization would be able to recover any financial loss without having the entire future of a project put at risk while you switch suppliers. Cover damages and termination are only two of the many remedies we teach in our online course, “Supply Management Contract Writing.”

Poorly written contracts either don’t address or don’t clearly address what happens in situations that can be described as the fruition of risk. Well-written contracts reduce risk by specifying exactly what will happen in the event that certain disruptive events occur. For example, a well-written delivery article with a liquidated damages clause can provide a supplier with sufficient incentive to completely avoid the possibility of a late delivery. A well-written indemnity clause can provide legal protection in a case where damage, injury or death occurs and the cause is related to a supplier’s performance. And a Force Majeure clause can help your organization avoid being penalized when its failure to perform was due to an “act of God” or other factors outside of its reasonable control.

One of the worst things a procurement department can do to drive enterprise-wide change is to communicate the changes as if they were procurement-driven. Many, if not most, stakeholders will not care much about supporting procurement initiatives, especially when it involves inconvenient change to their work. Instead, procurement must work closely with senior management to help brand the operational changes as a senior-management driven initiative that will be supported by procurement helping the various departments save the money stakeholders will be held accountable for saving. When approached in this manner, stakeholders will view the changes as mandatory and strategic and will view the procurement department as a helpful partner.

Difficult suppliers must be approached carefully during a negotiation. The circumstances should be considered when deciding on negotiation techniques. The more suppliers available as alternatives allows the procurement department to use more “hardball” style negotiation tactics. The fewer alternatives available will require the procurement department to use more “selling” style persuasion techniques.

A procurement professional should have a large arsenal of negotiation skills and tactics. Suppliers and circumstances can vary tremendously from negotiation to negotiation, so today’s procurement professional should be able to choose from a large array of negotiation skills and tactics to deploy based on the situation. Win-win negotiation skills and tactics are particularly important to have in this arsenal.

There are many options available for handling a request to make a purchase that exceeds an internal customer’s budget. Refusing to place the order is only one – and possibly the least professional – approach to take. One option that can be explored with the internal customer is leasing the equipment instead of buying it.

Whether or not records are kept of supplies depends on a number of factors such as the cost of supplies, use of supplies (for consumption versus for use in manufacturing or billable services), the cost of poor supply record keeping versus the cost of keeping records and so forth. However, for higher value, higher volume supplies that are considered direct costs, a computerized inventory management system should be used to track supplies. This is important for a number of reasons including accounting accuracy, replenishment efficiency, and others.

The first step of building a sourcing strategy is creating a Savings Strategy Outline. A Savings Strategy Outline will list all tasks that you plan to accomplish during a sourcing initiative. For each of those tasks, you will list target commencement dates, actual commencement dates, target completion dates, actual completion dates, target annual savings and actual annual savings. Obviously, at the beginning of your sourcing initiative, your Savings Strategy Outline will only contain target dates. But, as you progress through your sourcing initiative, you will add actual dates.

Interview Questions for Purchasing Specialists:
  • Can you describe the most difficult procurement issue you have faced? …
  • How do you go about sourcing new suppliers? …
  • How would you describe your negotiation skills? …
  • How do you build and maintain strong supplier relations? …
  • What do you do when a supplier fails to perform?

PROCUREMENT OFFICER Interview Questions And Answers!

What key procurement metrics do you track?

The interviewer may ask this question to get an idea of how you measure progress, make adjustments and implement solutions when challenges arise. Use your answer to highlight how you apply quantitative information to monitoring KPIs like pricing, transportation costs and other important procurement metrics.

Example: “Several key metrics I track regarding purchasing activities include cost savings, managed spend and ROI. Cost savings KPIs give me insight into which cost reduction strategies are working effectively, and managed spend rates allow me to adjust project outlines to maintain budget goals. ROI monitoring helps me understand the rate at which the company generates revenue compared to how much it spends obtaining manufacturing supplies. With this key data, I can help other departments implement solutions that further reduce costs, increase savings and manage new purchasing contracts.”

What makes you the right person for this job?

Interviewers ask this question, or some variation of it, to assess your understanding of the position. Your answer should demonstrate how your skills, experiences and other qualifications align with the jobs responsibilities and the employers expectations. You can describe the unique traits and strengths you bring that showcase your value. When preparing for interviews, you can draft your answer by reviewing the job description and identifying the employers candidate requirements or preferences. Incorporate those keywords into your response to show your alignment with the role.

Example: “I believe I am an excellent candidate for the purchasing agent role at your hospital. I have several years of healthcare experience performing this job, so I am already familiar with some of the industrys best vendors. I enjoy working in this field because I know that the work I do helps ensure the hospital runs smoothly and provides excellent care to its patients and their families.

Through my experience, I have demonstrated a proven record of strong communication and negotiation skills. These skills helped me lower vendor costs by 25% over the last two years in my most recent role. I also attribute this success to my relationship management skills, as I scheduled regular phone calls with our vendors and suppliers to keep everyone on track and build a strong rapport with them.”

Example procurement interview questions and answers

Use the following example procurement interview questions and answers to get ready in advance and make a great impression during your interview:

FAQ

How do I prepare for a procurement interview?

Interview Questions for Procurement Officers:
  1. What qualities do you look for in a supplier? …
  2. Can you describe a situation when you had to negotiate a contract? …
  3. How do you communicate to managers that their purchasing request was rejected? …
  4. What purchasing software are you familiar with?

What should I expect at a procurement interview?

The interviewer may ask questions that assess your ability to organize multiple shipments, manage multiple schedules and ensure deliveries meet important deadlines. Use your answer to demonstrate your organizational skills, time management skills and ability to oversee multiple activities in your schedule.

What makes a good procurement specialist?

The 7 Traits of Successful Procurement Specialists
  • People person. Being at the top of the collaborative work, procurement is very much about relationships and networking. …
  • Likes KPI and metrics. …
  • Negotiator by nature. …
  • Unconventional thinker. …
  • Generates process and procedures. …
  • Curious. …
  • Tactical.

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