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The purchasing manager plays a key role in logistics companies. Their decisions are of great importance, resulting in considerable investments for companies. If they make the right decisions, they can generate an increased return on investment. But if they make mistakes, they can cause considerable losses.
A purchasing manager is a person who defines the purchasing policy in companies within the logistics sector. This means that their duties revolve around the procurement of goods, equipment, and services for an organisation in order to ensure that it has everything it needs to carry out its operations.
Let's picture a purchasing manager involved in fleet management. They make decisions about the acquisition of new vehicles, which directly influences the return on investment that the company can obtain from the purchase of assets for the fleet.
The main role of a purchasing manager is to provide the company with the resources it needs, while making sure that this maximises the use of the company's budget. Importantly, the budget needs to be spent on purchasing the highest quality assets and materials, yet at a price that creates a favourable return.
Apart from cost considerations, the purchasing manager’s duty is also to align procurement with wider organisational goals and maintain an awareness of market conditions. In doing so, they thereby keep the company both coordinated and competitive.
The purchasing manager is responsible for the design of the purchasing department, as well as the different tasks that this entails like recruitment, training, and delegation within their team. They are also responsible for selecting the best supplier with the help of human resources and other related departments.
Many potential clients will contact the company, however most of them will not be adequately efficient or reliable. Selecting the best suppliers is not an easy task. Again, the need to value the price variable as a return on investment must be carefully considered.
Many suppliers will offer low prices that seem appealing, but it is necessary to thoroughly investigate every potential supplier, in order to fully understand their terms and what they are offering. The purchasing manager must therefore know about all of the current suppliers in depth, whilst proactively searching for new potential suppliers, who offer better conditions.
Along with punctual delivery and productivity improvement, stock control is a key aspect within logistics companies. Although the purchasing manager is not directly responsible for stock management, it is important that they have access to real-time information about the state of the company’s inventories. This will allow them to control order placement as well as the state of materials and products within the reverse logistics process.
Price analysis in real time allows the purchasing manager to examine the possible current and future profitability of all the different materials, products, and services that the company needs to make use of.
Reducing costs in the fleet is a clear example of this, where the appropriate price is determined according to the possible return on investment. It is the purchasing manager who analyses the different suppliers of fleet management solutions, in order to determine which one offers the best guarantees for improving efficiency and productivity.
Along with proactive supplier management and analysis, the purchasing manager must also negotiate favourable prices, terms, and delivery conditions with these suppliers. This requires negotiation skills that allow for a balanced and efficient relationship between the company and its suppliers.
Purchasing managers must make sure that all procurement activities comply with company policies, ESG standards, and legal requirements. At the same time, they are responsible for identifying potential risks within the supply chain, such as supplier insolvency or delivery delays, before developing strategies to minimise their impact.
Another responsibility of the purchasing manager is assessing the quality of the products received, following the parameters established by the quality department of the company. When the order received by the company does not meet the requirements previously negotiated with the supplier, the order will need to be returned.
The purchasing manager should know about all of the processes associated with the department, as well as managing the documents and administrative work associated with each purchase. They are not only involved in daily management, but also in the improvement of internal bureaucratic procedures that streamline the purchasing process and productivity of the department, such as the implementation of ERP systems.
The five main skills that a purchasing manager must have are:
Most purchasing managers begin with at least a bachelor’s degree in a relevant discipline, such as business, economics, finance, logistics, or supply chain management. For more senior positions, many employers look for candidates who have completed an MBA.
Professional certifications will also work in your favour. Options include:
According to data obtained by Reed, the average salary of a purchasing manager in the UK is between £47,785 and £49,816, depending on experience levels. However, other sources suggest an average base salary of around £44,696.
We hope that this article helped to answer your questions about this role in the supply chain, and its importance within logistics companies. In our resources centre, you can find more information about how companies in the logistics sector can improve the performance of their fleets. Also, feel free to contact our experts if you would like to learn more about our solutions, or request a demo.
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At MICHELIN Connected Fleet, we always start our journey with you by understanding and identifying your business challenges; this is key so that our recommended solutions and services can be tailored to your operations and business.
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