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.

Similar Job Titles

Because the sourcing function may be under the procurement division of a company, you could find these similar job titles to a Sourcing Manager:

  • General Merchandise Manager
  • Procurement Manager
  • Materials Manager
  • Strategic Sourcing Manager
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Typical Job Titles of Direct Reports

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.

Sourcing Manager Overview

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.

Some core responsibilities of the Sourcing Manager include:

  • Planning and managing a company’s overall sourcing (or specific category) strategy
  • Researching to understand a company’s operational needs and requirements
  • Building relationships with vendors and key suppliers
  • Negotiating pricing and controlling costs
  • Executing analyses and making suggestions for improvement in sourcing strategy
  • Developing an annual budget based on sourcing needs
  • Writing sourcing documentation
  • Building and leveraging internal business partner relationships to create value-focused strategies that align with goals
  • Reviewing contracts
  • Proactively, seeking business optimization and cost savings or new capability and developing data-driven business cases to support their initiatives
  • Staying current on industry and market trends and best practices

Hard Skills:

The role of Sourcing Manager requires a wide range of skills including traditional, direct hard skills such as:

  • Contracting and negotiation
  • Risk management
  • Business ethics and transparency
  • Forecasting and planning
  • Category management
  • Project management
  • Data analysis
  • Return on Investment evaluations
  • Advanced Excel/Database Management

Soft Skills:

  • Relationship and conflict management
  • Adaptability
  • Strategic thinking
  • Creative problem solving
  • Communication
  • Collaboration
  • Thought leadership
  • Detail-oriented
  • Time management

Required/Desired Education and Qualifications

Required Education and Qualifications:

  • Bachelor’s degree in a field such as Supply Chain, Business Administration, Finance, or Engineering
  • 5+ years of experience within procurement, operations, or relevant experience
  • Advanced Excel skills
  • Strong analytical and problem-solving skills
  • Negotiation skills
  • Strong presentation skills
  • Solid business judgment
  • Ability to understand and articulate the total value of a deal or negotiation

Desired Education and Qualifications:

  • MRP/ERP experience
  • Association for Supply Chain Management certification
  • WEB-based buying
  • Certified Professional in Supply Management (CPSM)
  • Working knowledge of Lean Manufacturing

A Day in the Life of a Sourcing Manager

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. 

Typical Working Conditions for a Sourcing Manager

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. 

Technology Enhancements

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. 

Sourcing Manager Salary Range and Benefits

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:

  • 401(k) 
  • 401(k) matching
  • Health insurance
  • Dental insurance
  • Disability insurance
  • AD&D insurance
  • Vision insurance

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