Written by Marijn Overvest | Reviewed by Sjoerd Goedhart
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Head of Procurement — Definition and Job Description

What is the head of procurement?

  • The head of procurement oversees all procurement activities within the organization.
  • The head of procurement is the one who holds the final approval before the procurement department proceeds to buy the essential goods and services for its daily operation.  
  • Heads of procurement earn competitive salaries with consistent annual growth. They receive extra pay, averaging between $18 and $30 per hour, adding more value to their total salary.

The head of procurement is a necessary role for every organization. Without it, the procurement department will fail to know even the smallest gaps that can ruin the procurement process. With that being said, many of us are confused about who holds the head of the procurement title.

For this article, we will discuss who the head of procurement is. We will also explore its responsibilities in the organization.

After reading this article, you will have a deeper understanding of the head of procurement. You will learn how they help the company to become successful. So let’s start unveiling everything you need to know about the head of procurement. 

    What is the Head of Procurement?

    The head of procurement in large organizations is the chief procurement officer. However, it is typical to have the same job responsibility with different titles. 

    In startups and small organizations, the chief procurement officer (CPO) has a different job title, such as procurement director, procurement contract officer, or deputy chief procurement officer. 

    The head of procurement controls all processes of the company’s purchasing operations. Commonly, it is the one who holds the final approval before the procurement department proceeds to buy the essential goods and services for its daily operation.  

    The head of procurement has the authority to affect the supply and the spending needed to get supplies or services for the company.

    Just like any person who holds a high position in every company, its ultimate goal is to make the business as profitable as possible. The head of procurement does this by employing best practices and operational efficiency.

    The head of procurement directly reports to the chief executive officer. However, some heads of procurement at other companies report to the chief operating officer or another executive position. 

    Head of Procurement Job Description Template

    Job Title: Head of Procurement

    Location: [Insert location]

    Reports to: [Insert name and title of supervisor]

    The head of procurement is the highest possible position when it comes to procurement. They report directly to the CEO of the organization and handle all aspects of procurement and supply chain management processes while leading and managing all other procurement professionals.

     

    Key Responsibilities: 

    • Cost reduction and cost management in procurement processes and procedures.
    • Create and implement strategic sourcing plans and strategies that align with the organization’s goals and objectives.
    • Identify procurement risks and mitigate them as needed.
    • Managing and maintaining strong relationships with suppliers.
    • Makes sure that the procurement process complies with legal and ethical standards by establishing and enforcing procurement policies and practices that prevent fraud, corruption, and unethical behavior.
    • Identify ways to streamline and optimize the procurement process.
    • Maintain a working knowledge of market trends and any changes in the supply chain landscape to make informed decisions.
    • Encourage and foster an environment of innovation in procurement processes and sourcing strategies.
    • Making sure that procurement activities align with the organization’s budget and balancing cost savings with meeting the organization’s operational needs.
    • Find ways to make the supply chain more resilient like investing in supplier diversity, creating backup plans, and addressing potential disruptions.
    • Find ways to be sustainable and socially responsible for company branding, supply chain sustainability, and ethical requirements.
    • CPOs are involved in the strategic planning of the organization. They contribute to the development of overall business strategies by procurement and supply chain management with organizational goals.

    KPIs for this role

    • Procurement ROI: Measures the return on investment for procurement initiatives which shows the reliability of procurement activities to deliver more profit than their cost.
    • Cost Savings: Amount of money saved by the procurement department due to strategic initiatives.
    • Payment Terms: Average time it takes to pay suppliers after receiving an invoice.
    • Supplier Performance: Quality of supplier goods and services and the constant management of these.
    • Inventory Turnover: Rate at which the inventory is sold and replaced and how this is efficiently managed.
    • Order Fill Rate: Customer orders that are fulfilled on time and in full.
    • Spend Under Management: Total spend which is actively managed and controlled by procurement.
    • Cost of Goods Sold (COGS): Direct costs of producing and delivering goods or services.

    Key Skills and Qualifications: 

    • Bachelor’s or Master’s Degree in a relevant field.
    • Certified Professional in Supply Management (CPSM) or Certified Procurement Professional (CPP) certification.
    • 8-10 years of relevant work experience in procurement.
    • Strong leadership skills that are capable of leading and training a procurement team.
    • Excellent financial acumen for effective management of the company’s annual procurement budget.
    • Strategic procurement skills while ensuring compliance with company objectives.
    • Proficiency in financial analysis for budgetary procurement decision-making.
    • Strong negotiation skills to secure advantageous terms from suppliers at the lowest possible cost.
    • Ability to manage and develop a procurement team.
    • Can draft and negotiate contracts well.
    • Excellent verbal and written communication skills.
    • Ability to identify and mitigate risks in the procurement process.
    • Capability to think creatively and innovatively to find procurement solutions.
    Head of Procurement Responsibilities & Tasks
    • Cost reduction and cost management in procurement processes and procedures.
    • Create and implement strategic sourcing plans and strategies that align with the organization’s goals and objectives.
    • Identify procurement risks and mitigate them as needed.
    • Managing and maintaining strong relationships with suppliers.
    • Makes sure that the procurement process complies with legal and ethical standards by establishing and enforcing procurement policies and practices that prevent fraud, corruption, and unethical behavior.
    • Identify ways to streamline and optimize the procurement process.
    • Maintain a working knowledge of market trends and any changes in the supply chain landscape to make informed decisions.
    • Encourage and foster an environment of innovation in procurement processes and sourcing strategies.
    • Making sure that procurement activities align with the organization’s budget and balancing cost savings with meeting the organization’s operational needs.
    • Find ways to make the supply chain more resilient, like investing in supplier diversity, creating backup plans, and addressing potential disruptions.
    • Find ways to be sustainable and socially responsible for company branding, supply chain sustainability, and ethical requirements.
    • The heads of procurement are involved in the strategic planning of the organization. They contribute to the development of overall business strategies by procurement and supply chain management with organizational goals.
    Head of Procurement Skills Description
    • Be able to anticipate: Quickly able to anticipate what can happen next in things like negotiation or market trends, among other things, and be able to take appropriate action in response.
    • Analytical capability: Ability to think critically and have all the necessary help and backup of technology to gain the needed insight for the betterment of the company.
    • Responsiveness: Taking action efficiently and effectively when action needs to be taken.-
    • Collaboration: Knowing how to coordinate with various persons and groups and knowing how to get them to coordinate with each other to work towards a common goal.
    • Transformational leadership skills: Continuous success in leadership while transforming functions within the organization to be more efficient due to procurement initiatives.
    • Technology: Well-informed in new technological advances when it come to procurement.
    • Financial Acumen: Excellent understanding of finances and budget management which ensures the cost-effectiveness of procurement activities.
    • Strategic Procurement Skills: Create and implement procurement strategies.
    • Negotiation: Ability to secure favorable terms in agreements in a cost-efficient manner.
    • People Management: Management and development of teams and persons.
    • Contracting Skills: Can draft, review, and negotiate contracts to legal and organizational requirements.
    • Communication: Excellent verbal and written communication skills.
    • Risk Management: Identify and mitigate risks in procurement processes and activities.
    Head of Procurement KPIs
    • Procurement ROI: Measures the return on investment for procurement initiatives which shows the reliability of procurement activities to deliver more profit than their cost.
    • Cost Savings: Amount of money saved by the procurement department due to strategic initiatives.
    • Payment Terms: Average time it takes to pay suppliers after receiving an invoice.
    • Supplier Performance: Quality of supplier goods and services and the constant management of these.
    • Inventory Turnover: Rate at which the inventory is sold and replaced and how this is efficiently managed.
    • Order Fill Rate: Customer orders that are fulfilled on time and in full.
    • Spend Under Management: Total spend which is actively managed and controlled by procurement.
    • Cost of Goods Sold (COGS): Direct costs of producing and delivering goods or services.

    The Significance of the Head of Procurement

    Every function within the procurement department is important to the smooth running of a company. This department is responsible for the acquisition of all vital materials and services that keep the flow of supply chains going.

    In this respect, sourcing becomes very important, as it is the lifeblood of operations, while the purchasing department is the heart of the supply chain, and the head of procurement becomes a key driving figure behind its success.

    The head of procurement develops the purchasing in tune with organizational needs and objectives. They oversee all supplier relationships, cost-saving initiatives, and strategic sourcing efforts, thereby making sure that the buying practices of the company meet demand with optimized costs. Bad leadership in this post means that the department loses out on inefficient purchases and fails to achieve opportunities of cost reduction, thus impacting profit margins.

    Besides, one of the very important visors of the head of procurement is risk management, especially when supplies are disrupted in turbulent markets. They implement proactive strategies that safeguard the organization from potential disruption in the supply chain, allowing for operational continuity.

    This position will require the right mix of strategic foresight, negotiation skills, and operational efficiencies that ensure procurement not only operates but also is prioritized to lead business success.

    Head of Procurement Job Description

    The head of procurement is responsible for overseeing the entire procurement function, ensuring the effective acquisition of goods and services necessary for business operations. This role includes developing and implementing procurement strategies that align with the organization’s objectives, focusing on cost-effectiveness, efficiency, and value creation.

    The head of procurement also leads supplier relationship management, ensuring strong partnerships, negotiating contracts, and maintaining communication with key suppliers to drive innovation, manage risks, and ensure consistent delivery.

    In this position, the head of procurement leads procurement projects and teams, ensuring staff are well-trained and that new hires are effectively integrated. The role requires ensuring compliance with regulations and standards, maintaining a deep understanding of procurement laws to protect the company’s reputation. Additionally, this position creates strategic procurement plans to reduce costs, improve supplier selection, and ensure timely delivery, even when primary suppliers face challenges.

    The head of procurement is key in managing supplier relationships, fostering long-term partnerships, and driving value through strategic sourcing, contract management, and supplier evaluations, ensuring procurement activities contribute to the organization’s long-term growth and success.

    Duties and Responsibilities of the Head of Procurement

    Being the head of procurement comes with great responsibilities and functions. Your task is not limited to only purchasing or managing a team of other procurement professionals. Here are the possible duties and responsibilities if you’re a CPO:

    1. Leads the procurement projects and teams

    The head of procurement is the one who leads the team when managing procurement projects. It must ensure that procurement staff are well and that their training is relevant to the project. 

    The head of procurement may also hire new talents. New talents can either be external or internal entities. The head of procurement must ensure that the performance and workflows of the newly hired entities are optimized. 

    2. Strictly follow regulations and compliance

    The head of procurement must have in-depth knowledge of regulations and compliance. Additionally, it must be an expert in the various laws and requirements that surround the procurement process. 

    The head of procurement must have a deeper understanding of these to ensure that the organization follows international standards. This secures the reputation of the company which will enable them to develop further.

    3. Align the plan with the goals of the company

    When the head of procurement makes a plan to streamline the procurement process, it must also ensure that it aligns with the goals of the company. 

    It must consider different factors for the success of the procurement process. Once it considers the different factors, it must know how to combine them to ensure that the goals of the company are met. 

    4. Ensures the delivery of products or services

    The head of procurement is in charge of guaranteeing diversity to the numerous suppliers of an organization. 

    It also makes sure that all supplies or services will be delivered promptly even if the first-choice provider is not able to do it.

    5. Create a strategic procurement plan 

    The organization expects the head of procurement to create a procurement plan to reduce costs. 

    The created plan will also help select the appropriate suppliers, ensure supplier performance, and make sure that the procurement policies and regulations meet the external and internal compliance required by the company.

    6. Manage supplier relationship

    The head of procurement needs to have great communication skills. It is needed to bring up any discrepancies with the acquired supplies or services.

    Additionally, the head of procurement needs to communicate with suppliers to build a long-term relationship with them. Having a good relationship with your suppliers will ensure that your supply chain is managed effectively.

    What Does it Take to be the Head of Procurement?

    For starters, the organization expects the head of procurement to have a bachelor’s degree in business or finance. However, many organizations require the head of procurement to have a master’s degree in finance, business, supply chain management, or procurement. 

    Commonly, the head of procurement has 20 years of experience in the field of procurement. This means that you need to have exceptional procurement and business knowledge to become the head of procurement. 

    Additionally, the head of procurement is expected to have working experience with the purchasing departments. Also, the head of procurement has to be skilled in strategic sourcing, project management, decision-making, negotiation, and price analysis. 

    The head of procurement is the leader in the field of procurement. However, they must have good collaboration skills to work effectively across various functional areas. 

    What type of Organization Has a Head of Procurement?

    As we said earlier, the position is common in large companies. The volume of purchases is a good reason to have an executive position and staff to manage the procurement process. Sometimes, the position has an alternate name, such as vice president of sourcing or vice president of procurement. 

    Startups and smaller companies may also employ a head of procurement. However, it has a different position title, such as contract manager or procurement director. 

    Salaryof the Head of Procurement

    According to Glassdoor, the average salary for a head of procurement is $116,028 per year in the United States. On the other hand, the estimated additional pay for a head of procurement is $18,430 per year. Adding these two, the total pay of a head of procurement will be $134,458.

    In Europe, the average salary of an advanced professional level like the head of procurement is $184,000. According to procurement salary statistics, procurement salaries overall in Europe increased up to 6%. 

    Conclusion

    Being the head of procurement is a huge responsibility, however, there are various heads of procurement. You can be a Chief Procurement Officer, a Procurement Director, a Procurement Contract Officer, or even a Deputy Chief Procurement Officer.

    Moreover, it’s important that the head of the procurement department knows his/her responsibilities so that he/she can fulfill his/her role and run the procurement smoothly. Other than the fact that it pays well, there are many reasons why it’s worth it to aim to become the head of procurement. Without the head of procurement, the department is prone to failing in reducing costs to produce higher profit margins.

    Frequentlyasked questions

    What is the head of procurement?

    The head of procurement oversees all procurement activities within the organization.

    What is the highest position in procurement?

    The highest position in procurement is the chief procurement officer as it is an executive-level position.

    Do small businesses have a chief procurement officer?

    Yes. However, it has a different title such as contract manager or director of procurement when it comes to small businesses.

    About the author

    My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

    Marijn Overvest Procurement Tactics