Written by Marijn Overvest | Reviewed by Sjoerd Goedhart
Fact Checked by Ruud Emonds | Our editorial policy

Purchasing Department — Everything You Should Know

What is the purchasing department?

  • The purchasing department is the department  responsible for acquiring the company’s goods to continue its production or processes.
  • Purchasing is more operational than procurement, which is more strategic.
  • The purchasing department has two main functions when it comes to business context which are manufacturing and retailing.

What is the Purchasing Department?

As we all know, the purchasing department is responsible for acquiring goods that the company needs to operate. It ensures that the supply, production, and equipment are available to make the process smooth from start to finish when manufacturing goods. 

Additionally, the purchasing department is more involved in the actual buying of the goods or services. When buying goods or services, the purchasing department usually considers the best possible price, terms, and conditions of goods or services to meet the organization’s immediate needs.

The purchasing department has to keep in mind if it has sufficient supply to meet the customer’s demand. This is due to the fact that having too many materials or goods will surely spoil it and that adds more cost. Having less supply of materials will also contribute to more expenses. 

The importance of the purchasing department is that it is the part of the company that identifies its crucial needs to secure its supply. The supply chain at its core ensures effective and efficient procurement of goods or services that the company needs.

After reading this article, you will know the role of a purchasing department, giving you an idea of how you can help its processes further to promote efficiency in the company.

I have created a free-to-download editable procurement process: 7 steps templateIt’s a PowerPoint file, together with an Excel filethat can help your purchasing department’s processes. I even created a video where I’ll explain how you can use this template.

Purchasing Department Key Roles

The purchasing department acquires goods and services required for operations. Each role in the department is connected, and missing one can disrupt purchasing processes. Here are the 9 key roles:

1. Junior Buyer

  • Maintains and enhances vendor relationships to secure exclusivity or priority for off-price opportunities
  • Keep abreast of competitor activities in both off-price and full-price segments
  • Maintains a high level of trend awareness for the relevant departments and the overall market

Salary range: $49,072-$74,863/year with an average of $61,490/year

Junior Buyer Job Description Template

Job Title: Junior Buyer

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A junior buyer mainly works on a company’s purchasing decisions and processes. They are in charge of product acquisition by assessing market trends, negotiating prices, and keeping track of inventory levels.

Key Responsibilities: 

 

  • Helps senior buyers in sourcing products and services.
  • Researching for suppliers and helping to identify the best options.
  • Helping to negotiate terms and prices with suppliers.
  • Creating and processing purchase orders.
  • Monitoring inventory and tracking orders to ensure on-time delivery.
  • Working together with other departments like sales, marketing, and finance.
  • Helping to develop procurement strategies.
  • Maintains accurate and up-to-date records of purchases and pricing.
  • Supports the procurement team in day-to-day activities and other projects.

KPIs for this role

  • Purchase Order Cycle Time: The average time for the purchase order process.
  • Supplier Relationship Management: The maintenance and management of good supplier relations from deals struck and supplier interactions.
  • Cost of Purchase Order: Tracking purchase order costs and identifying possible cost reductions and possible process improvements.
  • Purchases in Time and Budget: Purchases made within budget and on time as per the compliance of procurement goals.
  • Purchase Order Accuracy: Measuring purchase orders with errors to gauge accuracy.
  • Emergency Purchase Ratio: Monitor emergency purchases and how often they happen.
  • Cost Avoidance: Initiatives like looking for better suppliers, and equipment, or improving certain processes to cut costs without degrading in quality.
  • Cost Reduction: Savings achieved by price negotiations, discounts, and other cost-saving measures.
  • Procurement ROI: Overall profitability and performance of procurement investments.

Key Skills and Qualifications: 

  • Bachelor’s Degree in Supply Chain Management or a related field.
  • Has at least 2 years of experience in the field.
  • Has strong negotiation skills.
  • Has good written and verbal communication skills.
  • Can build and manage relationships effectively.
  • Advantageous to have in-depth knowledge of the industry.
  • Competent in Microsoft Office software, particularly Excel.
  • Have a good knowledge of Math and English.
Junior Buyer Detailed Responsibilities & Tasks
  • Helps senior buyers in sourcing products and services.
  • Researching for suppliers and helping to identify the best options.
  • Helping to negotiate terms and prices with suppliers.
  • Creating and processing purchase orders.
  • Monitoring inventory and tracking orders to ensure on-time delivery.
  • Working together with other departments like sales, marketing, and finance.
  • Helping to develop procurement strategies.
  • Maintains accurate and up-to-date records of purchases and pricing.
  • Supports the procurement team in day-to-day activities and other projects.
Junior Buyer Detailed Skills Description
  • Purchase Orders: Managing and tracking orders.
  • Supplier Performance: Evaluation of suppliers based on quality, delivery, and improvement relationship cost to manage supplier performance.
  • Logistics: Keeping track of goods and making sure they arrive on time and that they get there as efficiently as possible.
  • Procurement Process: Following the methods most efficient to acquire goods and services efficiently.
  • Cost Reduction: Reducing cost without sacrificing quality by using effective strategies.
  • Inventory Management: Makes sure that inventory is adequate at all times and is replenished whenever needed.
  • Strong Negotiation: Effectively reaching agreements with suppliers to secure the best prices and terms.
  • On-Time Delivery: Uses processes to ensure that deliveries arrive when they need to.
  • Price Analysis: Evaluation of product and service prices to determine fairness.

2. Procurement Assistant

  • Monitor inventory levels and identify procurement requirements
  • Investigate potential suppliers
  • Track orders and ensure timely delivery

Salary range: $30,500-$69,500/year with an average of $46,635/year

Procurement Assistant Job Description Template

Job Title: Procurement Assistant

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A procurement assistant supports the procurement department by being responsible for administrative tasks. They are also in charge of things like maintenance and organization of procurement documents.

Key Responsibilities: 

 

  • Research and identify potential suppliers/vendors.
  • Obtain price quotations and negotiate terms and conditions.
  • Maintain a comprehensive supplier database.
  • Help in creating and processing purchase orders, from reviewing, tracking, and monitoring order status for on-time delivery.
  • Coordinate with suppliers to resolve issues, communicate delivery schedules and expectations, and maintain positive supplier relationships.
  • Monitor and update inventory and conduct regular stock counts.
  • Maintain accurate and organized procurement records.
  • Prepare reports, notes, and summaries as needed.
  • Help in ensuring compliance with company procurement policies and legal policies.
  • Assist in supplier evaluation and qualification, and keep up to date with procurement regulations and practices.
  • Assist with cost analysis and cost-saving initiatives, and help identify opportunities for cost reduction while maintaining quality products and services.
  • Give administrative support to the procurement department.

KPIs for this role

  • Data Accuracy: Measure the accuracy of data presented in procurement documents, reports, tracking systems, etc.
  • Response Time: Timeliness and consistency in assigned tasks and projects. 
  • Purchase Order Cycle Time: The average time taken to create and process purchase orders.
  • Supplier Relationship Index: The status of supplier relationships based on communication, collaboration, and issue resolution.
  • Cost Savings Achieved: Cost savings that are achieved through negotiation, procurement strategies, process improvements, or supplier relations.
  • Compliance Rate: The compliance with company policies and legal regulations.
  • Inventory Turnover Rate: How quickly inventory is used within a specific period and the accuracy of this data.
  • Purchase Order Accuracy: The accuracy of purchase order throughout the whole process.
  • Procurement Process Efficiency: The efficiency of procurement processes and other tasks related to the process.

Key Skills and Qualifications: 

  • Associate’s or Bachelor’s degree in Business, Supply Chain Management, or a related field.
  • Proven experience in the field is advantageous.
  • Experience with procurement software and tools is advantageous.
  • Analytical and problem-solving abilities.
  • Good communication and negotiation skills. 
  • Has keen attention to detail and high work accuracy.
  • Can work on their own but also collaborate with others.
  • Excellent organizational and time-management abilities.
  • Proficiency in Microsoft Office software (Word, Excel, Outlook).
  • Preferably understands procurement regulations and best practices.
  • Open to learning and adapting to new procurement procedures.
Procurement Assistant Detailed Responsibilities & Tasks
  • Research and identify potential suppliers/vendors.
  • Obtain price quotations and negotiate terms and conditions.
  • Maintain a comprehensive supplier database.
  • Help in creating and processing purchase orders, from reviewing, tracking, and monitoring order status for on-time delivery.
  • Coordinate with suppliers to resolve issues, communicate delivery schedules and expectations, and maintain positive supplier relationships.
  • Monitor and update inventory and conduct regular stock counts.
  • Maintain accurate and organized procurement records.
  • Prepare reports, notes, and summaries as needed.
  • Help in ensuring compliance with company procurement policies and legal policies.
  • Assist in supplier evaluation and qualification, and keep up to date with procurement regulations and practices.
  • Assist with cost analysis and cost-saving initiatives, and help identify opportunities for cost reduction while maintaining quality products and services.
  • Give administrative support to the procurement department.
Procurement Assistant Detailed Skills Description
  • Detail-oriented: A procurement assistant has to be aware of accuracy to ensure procurement processes run as smoothly as possible.
  • Negotiation skills: Procurement assistants still negotiate or help in negotiating with suppliers to secure favorable terms and pricing.
  • Analytical skills: Important for procurement data analysis like price trends, supplier performance, and inventory levels.
  • Customer relationship management: Procurement assistants often help in supplier relationship maintenance.
  • Communication: A procurement assistant needs to be able to communicate effectively with suppliers, other staff, and other involved parties.
  • Time management: Ability to juggle different tasks and projects while still maintaining timeliness.
  • Risk management: Assisting in the mitigation of procurement risks.
  • Collaboration: A procurement assistant works with other procurement professionals and needs the skills to collaborate effectively with others.
  • Microsoft Office proficiency: Proficiency in using Microsoft Office software is an important skill for procurement professionals.

3. Inventory Specialist

  • Monitoring inventory maintenance
  • Regulating equipment and supply flow
  • Providing management reports and recommendations for process enhancement

Salary range: $32,500 – $106,500/year with an average of $67,937/year

Inventory Specialist Job Description Template

Job Title: Inventory Specialist

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

An inventory specialist ensures the faultless condition of the product throughout the logistics process. They count products, screen them for defects, and make necessary repairs or take the product out according to the damage.

Key Responsibilities: 

 

  • Assessing and overseeing stock rotation protocols.
  • Managing warehouse space for inventory storage in the store.
  • Educating store personnel on stocking techniques and product dating practices.
  • Strategizing the utilization of store warehouse space.
  • Initiating restock orders for inventory.
  • Updating store management on inventory matters.
  • Collaborating with management to address missing or damaged products in shipments.

KPIs for this role

  • Inventory Turnover Rate: This is the number of times a company sells and replaces its stock in a period, usually one year.
  • Days on Hand: Days on hand (DOH) represents the average number of days it takes for a company to sell its inventory. It is calculated by dividing the average inventory by the cost of goods sold per day.
  • Stock-to-Sales Ratio: The stock-to-sales ratio measures the relationship between the amount of inventory a company has on hand and its sales volume. It is calculated by dividing the average inventory by the average sales for a specific period.
  • Sell-through Rate: The sell-through rate is a metric used to evaluate how efficiently a company is selling its inventory. It is calculated by dividing the number of units sold by the beginning inventory, multiplied by 100 to get a percentage.
  • Backorder Rate: The backorder rate measures the percentage of customer orders that cannot be fulfilled immediately due to insufficient inventory. It is calculated by dividing the number of backorders by the total number of orders.
  • Accuracy of Forecasted Demand: The accuracy of forecasted demand measures how closely a company’s forecasted demand matches actual customer demand. It is calculated by dividing the absolute difference between forecasted and actual demand by the actual demand, multiplied by 100 to get a percentage.
  • Rate of Return: The rate of return (ROR) is a measure of the profitability of an investment. It is calculated by dividing the net profit of the investment by the initial investment, multiplied by 100 to get a percentage.
  • Product Sales: Product sales, also known as sales revenue, is the total amount of money generated from selling products during a specific period. It is calculated by multiplying the number of units sold by the selling price per unit.

Key Skills and Qualifications: 

  • Demonstrates employment background as an Inventory Specialist or in a comparable position.
  • At least 3 years of relevant experience.
  • Strong organizational and time-management abilities.
  • Proficiency in word processing, database, and spreadsheet software.
  • Willingness to work occasional weekends.
  • A high school diploma or equivalent is preferred.
Inventory Specialist Detailed Responsibilities & Tasks
  • Assessing and overseeing stock rotation protocols.
  • Managing warehouse space for inventory storage in the store.
  • Educating store personnel on stocking techniques and product dating practices.
  • Strategizing the utilization of store warehouse space.
  • Initiating restock orders for inventory.
  • Updating store management on inventory matters.
  • Collaborating with management to address missing or damaged products in shipments.
Inventory Specialist Detailed Skills Description
  • Customer Service: An inventory specialist needs to be approachable to suppliers, vendors, and customers and respond to their needs accordingly.
  • Inventory Management: As an inventory specialist is in charge of inventory they have to evaluate resource needs, determine appropriate order quantities to prevent overstocking, decide on storage locations, and establish stocking methods based on the resource’s characteristics.
  • Detail Oriented: An inventory specialist has to be meticulous about their inventory information to ensure accuracy in their decisions for inventory maintenance.
  • Accuracy: An inventory specialist has to be aware of when inventory needs to be restocked, how much, what specifically needs restocking, etc., or else they risk being irresponsible for company funds and goods
  • Communication Skills: Inventory specialists must communicate effectively with suppliers, vendors, and customers.
  • Cycle Counting: Cycle counting ensures an inventory specialist’s information is always accurate.
  • Vendor Management: Inventory specialists have to manage suppliers by choosing them wisely, negotiating contracts, controlling costs, reducing vendor-related risks, and ensuring service delivery.
  • Supply Chain Experience: Inventory specialists need to be familiar with the supply chain and its processes to effectively take on the responsibilities of an inventory specialist.
  • Compliance: An inventory specialist must ensure that all inventory management activities comply with relevant regulatory and safety requirements.

4. Direct Procurement Specialist

  • Evaluate and match products and services to determine which best meet the organization’s needs
  • Superintends the inventory of raw materials or other goods and places orders when supplies run low
  • Negotiation is a key aspect of the procurement specialist’s role. After securing the best pricing, terms, and delivery options for each product or service, they finalize the contract.

Salary range: $62,392-$108,362/year with an average of $76,960/year

Direct Procurement Specialist Job Description Template

Job Title: Direct Procurement Specialist

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A direct procurement specialist is responsible for procuring goods and services for the company that drives profit. They locate key suppliers, look for quality goods and services that meet company specifications, and negotiate a company’s purchasing agreements among others.

Key Responsibilities: 

 

  • Procures goods and services that meet the organization’s requirements.
  • Evaluates and negotiates supplier contracts.
  • Track inventory and restock goods whenever needed.
  • Stays up to date on industry trends, new products, supplier information, etc.
  • Compare available goods with market trends and determine the right pricing.
  • Conducting market research to find supplier options compatible with company needs while saving on costs.
  • Conducting cost analysis.
  • Coordinating and communicating with suppliers and internal stakeholders.
  • Managing and keeping track of shipment, delivery, and fulfillment.
  • Managing supplier relationships and acting as the agent between buyer and supplier.

KPIs for this role

  • Compliance Rate: When suppliers fulfill all their contractual requirements.
  • Number of Suppliers: Level of dependence on each supplier.
  • Purchase Order Cycle Time: The average time it takes for the purchase order process.
  • Supplier Quality Rating: Determine supplier quality and supplier benefits for future partnerships.
  • Supplier Defect Rate: Evaluate individual supplier quality based on defect rate.
  • Vendor Rejection Rate & Costs: Examine vendor management strategies.
  • Emergency Purchase Ratio: Rate of emergency purchases for company inventory.
  • Purchases In Time & Budget: Monitor time and budget costs and ensure that it falls within the organization’s budget.
  • Procurement Cost Reduction: Tangible cost savings from strategic procurement decisions.
  • Procurement Cost Avoidance: The avoidance of cost for future procurement processes and decisions because of strategic planning and data analysis.
  • Spend Under Management: Track and optimize procurement spend.
  • Procurement ROI: Determine the profitability of procurement investments.

Key Skills and Qualifications: 

  • Bachelor’s Degree in business administration, supply chain management, or related field.
  • At least 2 years of work experience as a Procurement Specialist or similar role.
  • Up-to-date knowledge of procurement strategies.
  • Excellent verbal and written communication.
  • Analytical thinking and negotiation skills.
  • Proficiency in Microsoft Office software and other procurement softwares and applications.
Direct Procurement Specialist Detailed Responsibilities & Tasks
  • Procures goods and services that meet the organization’s requirements.
  • Evaluates and negotiates supplier contracts.
  • Track inventory and restock goods whenever needed.
  • Stays up to date on industry trends, new products, supplier information, etc.
  • Compare available goods with market trends and determine the right pricing.
  • Conducting market research to find supplier options compatible with company needs while saving on costs.
  • Conducting cost analysis.
  • Coordinating and communicating with suppliers and internal stakeholders.
  • Managing and keeping track of shipment, delivery, and fulfillment.
  • Managing supplier relationships and acting as the agent between buyer and supplier.
Direct Procurement Specialist Detailed Skills Description
  • Communication and collaboration: Collaboration between other departments and communicate with them along with suppliers.
  • Financial skills: Knowledge in economics and the management of dinances.
  • Research skills: Gathering any and all up-to-date information relevant to the industry and procurement practices.
  • Negotiation Skills: Ability to negotiate with suppliers to have the best possible deals and contract advantages.
  • Risk Management: Identifying and mitigating risks in the company’s procurement processes.
  • Analytical Skills: Ability for data analysis to make informed procurement decisions.
  • Inventory Management: Managing stock inventory, ensuring stock availability, and keeping track of inventory data.
  • Project Management: Ability to manage procurement projects and efficiently see them through from start to finish.
  • Digital Aptitude: Proficiency in using digital tools and technologies in procurement.
  • Forecasting: Ability to forecast relevant market trends, industry changes, etc. from available data.

5. Contract Specialist

  • Engage in negotiations for contract agreements regarding products and services
  • Evaluate contractor performance to determine necessary amendments to current contracts
  • Draft and revise contracts between the company and prospective clients

Salary range: $86,050 – $108,768/year with an average of $96,511/year

Contract Specialist Job Description Template

Job Title: Contract Specialist

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A contract specialist is responsible for drafting and reviewing contracts between companies and suppliers of products or services. Their duties include drafting and editing contracts, communicating with vendors, and ensuring compliance with all regulatory requirements.

Key Responsibilities: 

 

  • Handle breaches of contracts promptly.
  • Act as the primary contact for external contracting representatives.
  • Create and execute efficient procurement proposals.
  • Research regulations to ensure contract compliance with laws.
  • Collaborate with clients to ensure contract terms are fulfilled per regulations.

KPIs for this role

  • Duration of contract management lifecycle: The length of time a contract management lifecycle lasts can indicate how effectively the contract was managed.
  • Close rates: This measures how many deals a contract specialist successfully closes and how many they don’t.
  • Contract value: Tracking the value of contracts is another important metric in contract management.
  • Contract risk: Contract management KPIs should include tracking contract risk and how effectively it is mitigated.
  • Approval times: It’s also important to track how long it takes for a contract to be approved.
  • Missed contract milestones: Contract milestones are a useful measure to assess the success of the contract management process.

Key Skills and Qualifications: 

  • Demonstrated experience in a Contracts Specialist role or similar position.
  • Exceptional verbal and written communication abilities.
  • Thorough understanding of procurement regulations, contract documents, and legal specifications.
  • Strong negotiation and interpersonal skills.
  • Capability to address client complaints and issues effectively.
  • Relevant training and certifications in Contracts Specialist functions.
  • Bachelor’s degree in business administration, marketing, accounting, finance, economics or a similar field
Contract Specialist Detailed Responsibilities & Tasks
  • Handle breaches of contracts promptly.
  • Act as the primary contact for external contracting representatives.
  • Create and execute efficient procurement proposals.
  • Research regulations to ensure contract compliance with laws.
  • Collaborate with clients to ensure contract terms are fulfilled per regulations.
Contract Specialist Detailed Skills Description
  • Interpersonal Skills: Contract specialists play a crucial role as representatives of their organization. Effective communication and relationship-building skills are essential for securing favorable, long-term contracts.
  • Writing Skills: Clarity, adherence to legal and industry standards, and compliance with regulations are vital in contract writing for contract specialists.
  • Financial Acumen: A strong understanding of business finance is necessary for contract specialists to assess whether a contract opportunity aligns with the organization’s financial goals.
  • Analytical Skills: Contract specialists should be adept at researching industry trends, regulatory changes, and alternative contract options to make informed decisions for their organization.
  • Negotiation Skills: Evaluating proposals, negotiating prices and terms, and handling contract negotiations are central to the role of contract specialists.

6. Vendor Management Specialist

  • Vendor managers oversee and maintain relationships between your organization and vendors/partners
  • They establish standards and source the best available vendors
  • Streamline the administration of vendor management procedures, tools, and systems

Salary range: $31,000-$133,000/year with an average of $65,332/year

Vendor Management Specialist Job Description Template

Job Title: Vendor Management Specialist

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A vendor management specialist is responsible for ensuring that supplier obligations are reflected in company activities. They also focus on day-to-day operations and work with suppliers to achieve company goals.

Key Responsibilities: 

 

  • Builds and maintains good relationships with vendors or suppliers.
  • Negotiates and influences vendors to get the best contract terms possible.
  • Checks vendor quality and capability and assists them if they run into any problems.
  • Coordinates with other staff to determine which vendors or suppliers are needed while ensuring that said vendors hold their end of the contract.
  • Scouts for new vendors or suppliers and assesses their capabilities and benefits.
  • Observes market trends and supplier capability to find cost-saving opportunities.
  • Manages the process of vendor selection and evaluates vendor proposals to determine the best one.
  • Maintains organized and accurate records of all supplier-related things.

KPIs for this role

  • Vendor Performance Scorecard: Measures vendor performance of chosen vendors to ensure their quality.
  • Cost Savings: Cost savings that are achieved through effective vendor management practices.
  • Vendor Compliance Rate: The percentage of vendors that comply with company policies and processes.
  • Vendor Relationship Health: Strength and effectiveness of vendor relationships based on the satisfaction of both parties.
  • Contract Compliance: The compliance of vendors with contract terms and legal policies.
  • Vendor Satisfaction: the satisfaction of vendors with the organization’s practices and processes. 

Key Skills and Qualifications: 

  • Bachelor’s Degree in business administration, supply chain management, or other related field.
  • Proven experience in vendor management, procurement, or a related field.
  • Strong negotiation skills.
  • Ability to build and maintain positive relationships with vendors.
  • Excellent cerebral and written communication skills.
  • Analytical and problem-solving skills.
  • Knowledge of contract management principles and practices.
  • Proficiency in Microsoft Office software as well as other procurement software.
Vendor Management Specialist Detailed Responsibilities & Tasks
  • Builds and maintains good relationships with vendors or suppliers.
  • Negotiates and influences vendors to get the best contract terms possible.
  • Checks vendor quality and capability and assists them if they run into any problems.
  • Coordinates with other staff to determine which vendors or suppliers are needed while ensuring that said vendors hold their end of the contract.
  • Scouts for new vendors or suppliers and assesses their capabilities and benefits.
  • Observes market trends and supplier capability to find cost-saving opportunities.
  • Manages the process of vendor selection and evaluates vendor proposals to determine the best one.
  • Maintains organized and accurate records of all supplier-related things.
Vendor Management Specialist Detailed Skills Description
  • Negotiation Skills: Ability to negotiate terms and conditions to gain favorable outcomes and cost-saving opportunities.
  • Relationship Management: Building and maintaining relationships with vendors to ensure effective and efficient collaboration and communication.
  • Communication Skills: Strong verbal and written communication skills with various parties involved.
  • Analytical Skills: Analysis of data and information to gain strategic advantage wherever possible in the vendor management process.
  • Problem-Solving Skills: Ability to solve vendor-related problems by identifying problems and their solutions.
  • Contract Management: The managing of supplier contacts from their drafting to their maintenance.
  • Market Research: Identifying potential vendors and assessing their capabilities to benefit the company.
  • Vendor Evaluation: Evaluation of vendor performance and maintaining vendor quality.

7. Inventory Manager

  • Supervises a team of inventory or warehouse staff
  • Manages an inventory tracking system to log deliveries, shipments, and stock levels
  • Assesses deliveries, shipments, and product levels to enhance inventory control processes

Salary range: $49,000-$79,000/year with an average of $62,000/year

Inventory Manager Job Description Template

Job Title: Inventory Manager

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

An inventory manager oversees the inventory levels of an organization. They lead a team to record and receive new stock and keep the inventory supply restocked and replenished among other things.

Key Responsibilities: 

 

  • Manages employee recruitment and training of new inventory employees.
  • In charge of employee schedules, deliveries, and shipments.
  • Addresses personnel issues and communicates with inventory employees to meet goals.
  • Optimize inventory control procedures and processes.
  • Inspect business supplies and raw materials to identify possible shortages and avoid them.
  • Ensure adequate product stock for every possible distribution channel to cover direct demand from customers. 
  • Keep accurate records of daily deliveries and shipments and replenish inventory when necessary.
  • Monitor inventory demand and inventory characteristics.
  • Place orders to keep track of and replenish stock when necessary to avoid a shortage of stock or surplus.
  • Analyze available data and market trends to anticipate future needs.
  • Evaluate suppliers to achieve the most cost-effective deals while maintaining product quality and trust in supplier relations.
  • Collaborate and coordinate with warehouse employees and other supply chain professionals to ensure that goals are met on time.
  • Report and keep upper management up-to-date on stock levels, issues, etc.

KPIs for this role

  • Inventory Turnover Rate: Number of times a company sells or replaces its stock in a certain time (usually one year)
  • Days on Hand: The rate of inventory turns in a period of one day.
  • Weeks on Hand: Average time that inventory sells per week.
  • Stock to Sales Ratio: Measure of inventory amount in storage vs, number of sales.
  • Accuracy of Forecast Demand: Percentage of accuracy in the forecast vs, how much stock is available.
  • Time to Receive: The efficiency of an organization’s stock-receiving process.
  • Put Away Time: Average amount of time for a company to store inventory.
  • Fill Rate: Measure of all portions of the supply chain with the inclusion of the order fill, line fill, and unit fill.

Key Skills and Qualifications: 

  • Bachelor’s Degree in business administration. logistics or other relevant fields.
  • Certified Professional in Supply Management (CPSM) certification is advantageous
  • Proven experience as an inventory manager or similar position with a minimum of 3 years.
  • Excellent working knowledge of data analysis and forecasting methods.
  • Working knowledge of inventory management software and willingness to learn other relevant supply chain software as needed.
  • Ability to accurately track inventory and create concise and well-organized reports.
  • Analytical thinking with mathematical skills.
  • Excellent organizational and planning skills.
  • Excellent written and verbal communication, and interpersonal abilities.
Inventory Manager Detailed Responsibilities & Tasks
  • Manages employee recruitment and training of new inventory employees.
  • In charge of employee schedules, deliveries, and shipments.
  • Addresses personnel issues and communicates with inventory employees to meet goals.
  • Optimize inventory control procedures and processes.
  • Inspect business supplies and raw materials to identify possible shortages and avoid them.
  • Ensure adequate product stock for every possible distribution channel to cover direct demand from customers. 
  • Keep accurate records of daily deliveries and shipments and replenish inventory when necessary.
  • Monitor inventory demand and inventory characteristics.
  • Place orders to keep track of and replenish stock when necessary to avoid a shortage of stock or surplus.
  • Analyze available data and market trends to anticipate future needs.
  • Evaluate suppliers to achieve the most cost-effective deals while maintaining product quality and trust in supplier relations.
  • Collaborate and coordinate with warehouse employees and other supply chain professionals to ensure that goals are met on time.
  • Report and keep upper management up-to-date on stock levels, issues, etc.
Inventory Manager Detailed Skills Description
  • Inventory tracking: Keeping track of inventory items, and stock levels, calculating available storage space, and identifying shortages or possible shortages.
  • Inventory control processes: Control processes used to manage stock, monitor perishable goods, and track raw material levels.
  • Inventory software or hardware systems: The use of software and hardware systems to monitor products leaving and entering facilities or stores.
  • Attention to detail: Accuracy of information and meticulous work practices to achieve goals efficiently and accurately.
  • Multitasking: Being able to manage multiple things at once, knowing how to prioritize each by importance and urgency, while maintaining timeliness overall.
  • Data analysis and reporting: Evaluating data and planning inventory strategies while keeping upper management in the loop.
  • Interpersonal skills: Ability to start and maintain positive relationships with suppliers, co-workers, employees, and other staff.

8. Sourcing Assistant

  • Supports the factory lab with daily tasks related to testing, including schedules and A-01 items
  • Assists in analyzing various lab test reports, both internal and external
  • Ensures products are developed and commercialized per headquarters’ design and specification requirements, prioritizing performance and integrity

Salary range: $44,000 – $64,000/year with an average of $53,000/year

Sourcing Assistant Job Description Template

Job Title: Sourcing Assistant

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A sourcing assistant supports the sourcing team through things like supplier research, price comparisons, and maintaining supplier relationships. They are also in charge of administrative tasks that are needed within the sourcing team.

Key Responsibilities: 

 

  • Assist other sourcing professionals in the development and implementation of sourcing strategies.
  • Conduct market research and be able to identify potential suppliers.
  • Help evaluate supplier proposals and contract negotiation.
  • Help monitor supplier performance and address issues that may arise.
  • Help maintain supplier relationships.
  • Help ensure compliance with contracts and company policies.
  • Prepare reports and analyze data to support sourcing decisions.
  • Collaborate with internal stakeholders and other sourcing professionals to help understand sourcing needs and requirements.

KPIs for this role

  • Time management: The efficient management of time in completing tasks and sourcing-related projects.
  • Administrative tasks: Being able to do administrative tasks efficiently in a neat and organized manner.
  • Risk Management: Being able to help identify a risk, assess it, and help in its prevention or minimization.
  • Process Efficiency: The improvement or maintenance of sourcing process efficiency.
  • Spend Under Management: The monitoring of spend within the company’s sourcing processes.
  • Supplier Database Maintenance: Ensures that the supplier database is up-to-date and accurate in its data.
  • Supplier Performance Evaluation: Helps other sourcing professionals in assessing supplier performance.
  • Savings Tracking: Monitoring the cost savings generated through sourcing activities.

Key Skills and Qualifications: 

  • Bachelor’s Degree in Business, Engineering, Education, MBA, Management, Supply Chain Management, Associates, Business/Management, Fashion, Project Management or other related fields.
  • Advantageous to have experience in sourcing or other related fields.
  • Coordinate meeting preparations which can be agendas, memos, and other correspondence.
  • Maintain and organize seasonal binders, finance books, budget books, meeting documents, etc.
  • Keep track of samples, products, documents, etc. to ensure a tidy office environment.
Sourcing Assistant Detailed Responsibilities & Tasks
  • Assist other sourcing professionals in the development and implementation of sourcing strategies.
  • Conduct market research and be able to identify potential suppliers.
  • Help evaluate supplier proposals and contract negotiation.
  • Help monitor supplier performance and address issues that may arise.
  • Help maintain supplier relationships.
  • Help ensure compliance with contracts and company policies.
  • Prepare reports and analyze data to support sourcing decisions.
  • Collaborate with internal stakeholders and other sourcing professionals to help understand sourcing needs and requirements.
Sourcing Assistant Detailed Skills Description
  • Communication skills: Strong written and verbal communication skills.
  • Computer skills: Capable of navigating software such as Microsoft Word, Excel, Product Life Management system (P.L.M.), and others if necessary.
  • Data Analysis: Analyzing and being able to assess available data on sourcing processes or sourcing concerns is a must.
  • Research Skills: Ability to research various things concerning sourcing.
  • Organizational Skills: Ability to organize tasks and documents, manage multiple projects at once, and be on time for deadlines.
  • Analytical Skills: Ability to analyze data for informed decision-making and help in supporting sourcing strategies. 
  • Attention to Detail: A keen eye for reviewing sourcing information.
  • Problem-Solving: Ability to find solutions for problems, especially within a high-pressure environment.

9. Project Purchaser

  • Identify suppliers who can meet company requirements, consider factors such as pricing, and maintain communication with internal clients
  • Collaborate closely with Sourcing experts
  • Analyze system data on actual purchases to identify value opportunities, develop tactical plans to seize these opportunities, align with partner strategies, and apply local/regional supply agreements

Salary range: $41,000-$97,000/year with an average of $66,567/year

Project Purchaser Job Description Template

Job Title: Project Purchaser

Location: [Insert location]

Reports to: [Insert name and title of supervisor]

A project purchaser is responsible for on-time purchase orders and materials delivery for a specific area or project. They work closely with the supply chain coordinator and the project team.

Key Responsibilities: 

 

  • Identifies suppliers that meet company requirements and maintains regular communication with internal clients.
  • Collaborate with sourcing professionals for the development and implementation of the assigned project.
  • Look for value opportunities and create plans to seize them.
  • Negotiate for favorable contract terms and cost-effective decisions.
  • Manage supplier relationships and maintain a positive relationship with said suppliers.
  • Manage multiple purchasing projects with efficiency and timeliness.
  • Identify and mitigate potential risks to procurement activities and processes.
  • Interpret data to make informed purchasing decisions.
  • Manage budget and analyze data to take cost-saving opportunities when possible.
  • Have the communication skills to convey information effectively to internal stakeholders and external suppliers.

KPIs for this role

  • Cost Savings: Measures cost savings achieved.
  • Supplier Performance: Evaluate supplier performance based on delivery times, quality of goods/services, and compliance with contracts.
  • Procurement Cycle Time: Measure the time taken to complete the procurement process from start to end.
  • Contract Compliance: Monitor contract compliance by all involved parties.
  • Spend Under Management: The percentage of total spend actively managed by the project.
  • Supplier Diversity: The diversity of suppliers in a contract with the company.
  • Procurement ROI: The return on investment for the project activities.
  • Risk Management: Effectiveness of risk management strategies used.

Key Skills and Qualifications: 

  • Bachelor’s degree in Business Administration, Supply Chain Management, Finance, or a related field.
  • Minimum of 2 years of experience in procurement or a related field.
  • Advantageous to have professional certifications like Certified Professional in Supply Management (CPSM) or similar.
  • Ability to negotiate favorable terms and contracts with suppliers.
  • Strong interpersonal skills to manage relationships with other staff and suppliers.
  • Excellent written and verbal communication skills,
  • Proficiency in project management principles.
  • Identification and mitigation of potential risks.
Project Purchaser Detailed Responsibilities & Tasks
  • Identifies suppliers that meet company requirements and maintains regular communication with internal clients.
  • Collaborate with sourcing professionals for the development and implementation of the assigned project.
  • Look for value opportunities and create plans to seize them.
  • Negotiate for favorable contract terms and cost-effective decisions.
  • Manage supplier relationships and maintain a positive relationship with said suppliers.
  • Manage multiple purchasing projects with efficiency and timeliness.
  • Identify and mitigate potential risks to procurement activities and processes.
  • Interpret data to make informed purchasing decisions.
  • Manage budget and analyze data to take cost-saving opportunities when possible.
  • Have the communication skills to convey information effectively to internal stakeholders and external suppliers.
Project Purchaser Detailed Skills Description
  • Negotiation Skills: Ability to negotiate terms and conditions with suppliers to secure favorable agreements.
  • Relationship Management: Skill in building and maintaining relationships with stakeholders and suppliers.
  • Communication Skills: Strong verbal and written communication skills to involved parties.
  • Project Management: Has excellent project management and is effective in all project management processes.
  • Risk Management: Can identify risks and prevent or minimize them.
  • Analytical Skills: Data analysis to make informed purchasing decisions.
  • Financial Acumen: Effective in budget management and being able to take cost-saving opportunities.
  • Time Management: Skill in task prioritization, time management, and meeting deadlines with efficiency.
  • Vendor Management: Ability to manage relationships with vendors, including selecting, evaluating, and negotiating with suppliers to ensure quality, cost-effective goods and services.
  • Forecasting: The forecasting of procurement needs based on available data.

The Two Core Functions of the Purchasing Department

As we mentioned earlier, the purchasing department primarily focuses on acquiring goods or services. It has two main functions or facets within a business context: manufacturing and retailing, which we will discuss further below.

1. Manufacturing

This facet of the purchasing department is involved in acquiring raw materials to process them into a finished product that they will sell in the market. 

For example, a purchasing manager for a food factory is tasked to source raw materials and components needed to create their signature bread. However, this is not where it ends. A purchasing manager must find the right suppliers and check the quality of the materials that will be used for their signature bread.

Once you have all the raw materials, the purchasing manager should have overall control of the production as manufacturing relies on a steady flow of materials. 

2. Retailing

This function of a purchasing department is more focused on acquiring finished goods to be sold again in the market. 

For this, the purchasing manager of a mobile phone store is more focused on ensuring that the inventory has the right stock levels. Of course, the purchasing manager will still search for wholesalers. However, they must be pro-negotiators to get the best deals while also building a strong relationship with their suppliers. 

What is Purchasing Management?

Purchasing management refers to administrating the processing of acquiring the materials necessary for the daily operation of a company. 

Having efficient purchasing management can help companies to lower their costs while maximizing their profits. This process usually involves evaluating the inventory, identifying the storage capacity, and handling distribution issues. 

In purchasing management, the purchasing manager usually works with suppliers and attempts to align the delivery of the necessary materials with production needs. Additionally, the purchasing manager may frequently solicit bids for services and goods to control costs. 

Importance of Purchasing Management

Purchasing management is important as it can help in various ways such as the following:

1. Maximizing Resources

Purchasing management can help the company to maximize its resources through efficient timing of the purchased materials. 

Knowing when to buy materials ensures that financial resources are used effectively rather than being tied up in excess inventory.

2. Maximizing production

Purchasing management enables the company to maximize production by ensuring all employees have the necessary materials for manufacturing. If a company orders too much material, it may end up in storage or worse, wasted.

3. Controlling costs

Purchasing management is involved in understanding the supply chain and market fluctuations. Thus, it finds the best possible price for raw materials which helps you control the costs in your company.

4. Increasing profits

Managing the company’s purchases can help lower the cost per unit of the materials and increase the product’s profit margin. Additionally, it can allow you to avoid wasting materials and having unnecessary storage costs.

5. Just-in-time production

Purchasing management plays a vital role in implementing just-in-time production as the arrival of raw materials for manufacturing is aligned with the delivery of products to consumers. 

Other Activities and Roles of the Purchasing Department

Here are some of the important functions and roles of the purchasing department that can streamline the company’s operations:

1. Assess the Company’s Needs

The purchasing department must know if the supplies in the company are enough to cover its operation before purchasing. It is also important to know the company’s needs can be met. 

The purchasing department can check the historical records of their purchases to track the company’s needs. This is to evaluate if there are changes in the company’s plans which can help them effectively manage the supplies. 

2. Check the Deliveries

The purchasing department negotiates with the supplier the schedule of the deliveries. They do this to make sure that all deliveries will arrive on time. 

It also checks the inventory to know if the materials will be enough to use in the company. Because if they run out of materials, they may incur losses as they cannot meet the customers’ demands. 

Coordinating the arrival of the deliveries guarantees fewer obstacles to the procurement process. 

3. Budgeting

The purchasing department must guarantee that the requested amount for the budget will be enough to cover the expenses. It must achieve the goal of lessening the cost while ensuring the quality of the company’s growth. 

Developing a budgeting plan will make the company’s resources efficient. As the purchasing department works together with the finance team, they can ensure that costs will be maximized. 

4. Compare Prices

When the purchasing department is given a budget, they must source out which supplier is better for the company. They must select the supplier with the best price without sacrificing the quality of goods or services. 

The purchasing department must find the best rates that will benefit the company and its supplier in the process.

They can use the traditional or smart procurement method to find the best rates for the company. 

5. Maintaining Supplier Relationships

Having a harmonious relationship will benefit one another. This can be the instance with the purchasing department. 

It must maintain a healthy relationship with the supplier because of its benefits. The supplier may give discounts or extra materials if you have a long-term relationship with them. 

The purchasing department can also build relationships with other suppliers it deems beneficial, especially if the contract with the primary supplier may end and may raise the prices of its goods or services. 

6. Complying with the Agreements

When a contract is made between the purchasing department and the supplier, they must abide by it. They must follow thoroughly what has been negotiated to avoid breach of contracts and other problems that may arise. 

They must also follow all the government regulations regarding the procurement process to carry out the project. 

7. Carry out Research

The purchasing department must develop research to achieve its long-term goals like every other company. Research helps strengthen the company’s plan for growth. It ensures a clearer view of what should be done to achieve growth. 

Moreover, carrying out research will ensure that your supplier can match the standards of your company. It will help you to find the best supplier for your company. 

8. Enhance Procurement Strategies

Enhancing procurement strategies will ensure the development of the company. The purchasing department may collaborate with other departments in planning to attain its growth. 

This can be done by ensuring that suppliers match your requirements and crafting new ways to improve the procurement process. 

9. Records all Transactions

The purchasing department must record all their transactions so that they can easily find them if the need arises.

Records of purchases, invoices, contracts, and documentation of refunds are important to know if both fulfill their obligations diligently. 

They can also monitor the records of their inventory to see if it is enough to complete their operations.

10. Enhance the Quality of Products

Purchasing departments can help the company improve its products by monitoring the availability of supplies and checking for ways to get better materials without raising costs. 

This helps the company to build customer loyalty, increase its profit margins, and thrive in the competition with other companies. 

What is the difference between Purchasing and Procurement?

I can imagine that only some know the difference between Purchasing and Procurement. It doesn’t help that the terms (sometimes wrongly) are used interchangeably. 

They are definitions that relate to each other within a broader context of Sourcing and Supply Chain management, yet they are quite distinct. Below you can find some differences:

Procurement
Procurement is more strategic.
Procurement is broader than purchasing and also encompasses supplier management, strategic sourcing, negotiation, and risk management.
Procurement often involves analyzing the organization's needs, selecting the right suppliers, and managing these suppliers.
It focuses on maximizing value for the organization through cost savings, quality improvement, and risk mitigation.
Purchasing
Purchasing is a component of procurement and is more about the transactional aspect of buying goods and services.
It involves the actual buying of goods or services at the best possible price and conditions.
Purchasing is more operational compared to procurement and focuses more on execution.
It includes activities such as placing orders, managing supplier relationships on a day-to-day basis, and ensuring that the right products are delivered at the right time.

Procurement Expert’s Insights on The Purchasing Department

For this article, we asked an experienced procurement expert to share her insights to help answer common questions about the purchasing department.

Nesrin Chabbah
Senior Lead Buyer

LinkedIn Profile: linkedin.com/in/nesrin-chabbeh

1. What do most people get wrong about the purchasing department?

“Some fail to recognize its strategic importance, often reducing it to transactions. The purchasing department has a profound impact on cost-effectiveness, profitability, and operational efficiency.

It encompasses both strategic and operational procurement, crucial for a company’s growth and financial well-being.

Efficient purchasing management involves timing optimization, cost control, production maximization, and facilitation of just-in-time production, all contributing to a company’s prosperity.

Understanding these facets is crucial for recognizing the pivotal functions and significance of the purchasing department in a company’s operations.”

2. For those planning to work with the purchasing department, what important information should they know?

“Starting in purchasing management? It’s not just buying goods. Learn the strategic and operational sides. Master efficient inventory, cost control, and just-in-time production. Efficient purchases can boost profits and streamline operations.”

3. From your experience, what is the most important thing you learned about the purchasing department?

“The core of purchasing management lies in striking a balance between acquiring necessary materials for operations and minimizing costs. Strategic procurement aligned with business goals is crucial.

Effective inventory management and supplier relations optimize outcomes, highlighting the significance of a well-structured approach in procurement management.”

4. Can you provide some tips for being effective in the purchasing department?

To excel in procurement, focus on strategic sourcing, optimize inventory through data, centralize documentation, maintain transparency, and refine negotiation skills with suppliers for mutual benefit.

5. Can you give us an example of how you managed your purchasing team or department?

“Emphasizing processes was crucial. Clear roles were defined, collaboration was encouraged, efficient procurement tools were utilized, regular training was provided, and a positive work environment was maintained.

Close performance monitoring was a priority. Effective communication was highlighted to ensure efficiency, prevent potential issues, and manage risks adeptly. Weekly meetings were held to facilitate coordination.”

Conclusion

In conclusion, the purchasing department plays a crucial role in businesses as it ensures the timely purchasing of products or services. 

Although it heavily focuses on buying goods and services, purchasing managers should also know how to manage their purchases to ensure that their inventory won’t exceed or go out of the needed items. 

Furthermore, understanding how the purchasing department operates can help the company identify more opportunities that will allow it to have smoother operations that will lead to greater success for the organization. 

Frequentlyasked questions

What is a purchasing department?

A purchasing department is the part of a company that is responsible for acquiring goods that the company needs to operate.

What is the importance of having a purchasing department?

It is important as it is the part of the company that identifies what it needs to continue its production or its daily process.

What are the two core functions of the purchasing department?

The two core functions are manufacturing, which involves sourcing raw materials to create finished products, and retailing, which focuses on acquiring finished goods to be sold in the market.

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