Procurement Specialists In Today’s Business World

Last Updated April 15, 2021

Businesses in all industries, in both the private and public sectors, depend on the expertise of procurement specialists to obtain the products, materials, and services needed to conduct operations and do that at an acceptable cost.

Dr. Tobias Schoenherr, Hoagland-Metzler Endowed Professor in Purchasing and SCM at Michigan State University’s Eli Broad College of Business, shares this example: A manufacturing company may spend 70% of its revenue on purchases from outside suppliers, whereas a non-manufacturing company typically spends 40% of its revenue on outside suppliers. For a company the size of GE, that could amount to $100 billion, he stated in a lecture on supply base management.

As you can see, the importance of procurement management in the sourcing of goods and services can greatly impact cost and profit margins for an organization.

Here, we’ll look at some of the multiple roles a procurement specialist may fill, the knowledge and skills needed to perform in the role and the job and salary outlook for procurement specialists.

Procurement Specialist Job Description

The duties performed by procurement specialists can vary widely according to the nature and size of the business. While the primary duties of a procurement manager or specialist are linked to sourcing goods and services for the organization, they also can handle additional duties:

• Research: Procurement managers evaluate and compare products and services to determine which best meet the organization’s needs.
• Cost analysis: Obtaining goods at the right cost can determine whether the company achieves profitability. Cost is also a factor when setting prices for the company’s products or services which must be in line with what the market will support.
• Inventory control: Often, the procurement specialist oversees the inventory of raw materials or other goods and places orders when supplies run low.
• Negotiating contracts: Negotiation is a major share of the procurement specialist’s job. After securing the best pricing, terms and delivery options for each product or service, they settle the contract.
• Projecting future needs: Not only do procurement specialists manage current needs, they strategize with various departments and suppliers to ensure the organization’s future needs will be seamlessly met.

Knowledge and Education Required to Succeed in Procurement

Most procurement specialists hold at least a bachelor’s degree in business, finance or a related field, according to the U.S. Bureau of Labor Statistics (BLS). In addition, many seek advanced or specialized education to hone skills specific to sourcing and procurement. 

In specialized certificate programs, procurement courses cover such topics as:

• Strategies and tools for evaluating supplier performance
• How to develop quality relationships with suppliers
• Effective tactics for negotiating costs and contracts
• Managing inventory with quantity and quality merchandise control
• Establishing e-procurement in the organization
• How to promote ethical behavior in an organization
• Driving environmental sourcing and sustainability

This specialized education beyond the bachelor’s degree can be a path for supply chain professionals who wish to improve their skills and knowledge and seek to advance their career to become a procurement specialist or manager. It also is valuable for professionals from other fields looking to move into procurement or other areas of supply chain management.

How Procurement Specialist Roles Are Evolving

Some companies have increased their reliance on external procurement specialists to source everything from payroll software packages to marketing and legal services. These specialists have a deep understanding of specific industries and of the intricacies of negotiating contracts in their area of expertise.

In-house procurement managers are becoming more specialized, as well. New technology enables them to take on more complex and strategic roles in many organizations. They are becoming more empowered to analyze business operations, identify potential problems and recommend solutions.

Overall, the role of purchasing and attention given to procurement has changed, as explained by Dr. Schoenherr:

“If we go back 30 or 40 years, purchasing was primarily a clerical activity. The focus at that time was primarily on doing that work efficiently…Over time, attention turned to really the amount of money that we were spending with outside suppliers. The focus moved from clerical efficiency to make sure that we were getting the lowest prices for the products and services we were buying for the enterprise.”

Providing Value

Today, companies are looking at whether suppliers provide the best value to the company.

“In leading organizations, the focus in the purchasing function today is really on buying for the best value to the business,” Schoenherr said. And that is when purchasing turns into a competitive advantage.

They are also focusing more on developing good supplier relationships, improving internal communications and leveraging the power brought by emerging technological tools.

“Having the appropriate kinds of relationships with suppliers and managing those relationships effectively is critical to making sure we can execute this kind of best value purchase,” he said.

Companies are not buying just the product or services from a supplier. They are buying its capabilities and expertise, according to Schoenherr.

Reducing Risk

Reducing risk is another important role for procurement specialists.

There are four basic dimensions of risk to a supply chain, Schoenherr said:

• Disruption of the physical flow of the product through the supply chain
• Sudden and unexpected increases in costs or prices
• Security of the product or its condition as it moves along the supply chain
• Activities by suppliers that could reflect badly on the enterprise

By closely analyzing suppliers, they can identify those at risk of failure and prevent possible supply chain disruptions.

Procurement Specialist Job and Salary Outlook

While new technologies have the potential to help procurement specialists move into more strategic roles within an organization, they are also leading to more automation of purchasing and procurement tasks themselves.

This has led the U.S. Bureau of Labor Statistics to project a seven percent decline in the overall employment of procurement specialists and managers and purchasing managers, buyers and agents from 2019 to 2029, stating: “As procurement technology continues to improve, less complex procurement functions, such as finding suppliers or processing purchase orders, will likely be automated. In addition…organizations may outsource these functions in order to focus on more complex or strategic procurement tasks and to reduce costs.”*   

Even as outsourcing, digital transformation and automation impact procurement roles and job duties, salary levels remain strong. According to the BLS, the median annual salary for purchasing buyers and agents was $69,600 with purchasing managers earning $121,110, as of May 2019.

In their Annual Salary Survey for 2020, Logistics Management reported a median annual salary of $82,000 and average annual salary of $114,370 for purchasing and procurement managers/directors.

Higher levels of experience and education can result in higher salaries as a procurement specialist and in roles across the supply chain. The 2020 Supply Chain Salary and Career Survey Report by the Association for Supply Chain Management (ASCM) found that 84% of supply chain professionals hold a bachelor’s degree or higher and earn a median salary that is 24% higher than the national median salary. Those supply chain professionals with a graduate degree or higher earn $17,243 more in their median annual salary compared to their industry peers with only an undergraduate degree.

The challenging and ever-changing role of procurement in the supply chain provides solid potential as a career choice for people who are familiar with supply chain operations and wish to expand their knowledge and skills in this area.

See how an MSU Master Certificate focused on Procurement Management and Strategic Sourcing can help to strengthen your skills and grow your career.

*National long-term projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Information provided is not intended to represent a complete list of hiring companies or job titles, and degree program options do not guarantee career or salary outcomes. Students should conduct independent research on specific employment information.