The Sourcing Manager plays a key role in maintaining the company’s supply chain by ensuring that the organization always has access to the resources it needs to deliver. Let’s differentiate between “sourcing” and “procurement.” Both sourcing and procurement are related and play key roles in a smoothly run supply chain. However, they are significantly different and should be employed in different ways to ensure success.
Procurement deals with obtaining supplies and services from sources that have already been established; it is the process of getting the materials and partner performance you need. Sourcing is finding and vetting the suppliers of those materials and services. Some companies have the sourcing function within the procurement organization.
A Sourcing Manager has the responsibility for handling a company’s end-to-end sourcing operations for a category or categories by carrying out research, creating and executing strategy, defining quality and quantity metrics, and choosing suppliers that meet these criteria.
Because the sourcing function may be under the procurement division of a company, you could find these similar job titles to a Sourcing Manager:
The Sourcing Manager interacts with stakeholders in many areas of a company, but may be an individual contributor. A large company may have a sourcing team in which case the sourcing manager will have members of the team as direct reports.
A Sourcing Manager has the overall responsibility for evaluating suppliers and negotiating price, quality, specification and scope of services based on a category sourcing strategy. The sourcing manager may have a team of individuals, depending on the size of the company, that segments the work into manageable categories. Data from procurement, showing how suppliers are performing over time, is used by the sourcing manager to manage supplier relationships and determine whether to continue or to terminate vendor relationships.
Though the scope of responsibility in this role can vary depending on the nature of the company, a typical sourcing manager will identify appropriate suppliers, negotiate contracts, establish fulfillment or material release processes, and collaborate to forecast future needs. Ultimately, the sourcing manager helps manage and alleviate supply chain risk through risk management and staying on top of supplier stability. Often, during the evaluation of suppliers, it is necessary to visit vendor facilities and participate in trade shows or industry groups. Many sourcing professionals also have management responsibilities in marketing, logistics, forecasting, and manufacturing processes.
Some of the primary duties of a Sourcing Manager are:
Developing procurement policies – Establishing, analyzing, and optimizing the procurement strategy to align with the business’s goals.
Leading collaboration with stakeholders and internal teams – Partnering with stakeholders, executive leaders, and department heads to understand business needs. As a result, the sourcing manager is able to establish requirements, scope, and criteria for procurement projects.
Managing vendor selection – Leveraging tools to facilitate strategic sourcing and managing the Request for Proposal process. Leading initial market research and vendor profiles to assist in vendor selection.
Building supplier relationships – Using Supplier Relationship Management (SRM) best practices throughout negotiation, contracting, onboarding, ongoing business, and renewal.
Analyzing procurement data – Collecting and interpreting procurement data including cost analysis reporting, benchmarking expenditures, and return on investment.
Optimizing procurement processes – Performing regular reviews of established procurement processes to ensure continual improvement, refining policies where needed.
The role of Sourcing Manager requires a wide range of skills including traditional, direct hard skills such as:
Required Education and Qualifications:
Desired Education and Qualifications:
A day in the life of a sourcing manager isn’t boring because this role wears many hats. Which hats may depend on the company you work for and your specific roles. You may work on purchasing deals, analyzing data, negotiating pricing, and forecasting future needs – all in a single day. Daily tasks could include carrying out market analysis, comparing prices from different suppliers, looking at market changes and how those changes affect prices. After analyzing data, you may make decisions on retaining or changing vendors.
The Sourcing Manager may meet with individuals in procurement on any given day to obtain data on delivery, costs, and inventories. Forecasting future needs entails communicating with sales, marketing, and other stakeholders for information. You could spend time preparing documentation and/or proposals for changes in strategy and policies each day.
Sourcing managers can be employed by a wide range of corporate and governmental entities and, therefore, have varied work environments. Traditional companies and organizations usually have relatively conventional office settings. Global companies may require international travel on a frequent basis searching for the best materials at the most competitive price.
Being automated is key for a company when sourcing goods from suppliers. Technology can be critical in managing suppliers, creating and tracking purchase orders, and more. There are many web-based solutions that have features for Requests for Information, RFPs, vendor management, and compliance tracking.
The average salary for a sourcing manager is $95,000 per year, with a range between $56,500 and $160,000, depending on skills, experience, employer, geographic location, and bonuses.
Benefits for a Sourcing Manager are a complete package including: