How to Be Principal Sourcing Manager - Job Description, Skills, and Interview Questions

Sep 17, 2021 / 5 Minutes Read / By Albert

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The Principal Sourcing Manager plays an important role in the success of an organization. By strategically overseeing the procurement of goods and services, they ensure that the products and services are of the highest quality and are obtained at the most competitive prices. This leads to cost savings for the company, which can be used to invest in new projects or initiatives and drive business growth.

In addition, the Principal Sourcing Manager is also responsible for managing supplier relationships and ensuring supplier performance is up to standard. This helps to ensure that deadlines and budgets are met, and that goods and services are delivered on time and within budget. As a result, customers receive a high quality product or service and their satisfaction with the company increases.

Steps How to Become

Earn a Bachelor's Degree. A bachelor's degree in business, management, economics, supply chain management, or a related field is typically required for a Principal Sourcing Manager role. Degrees in engineering, mathematics, or other related fields may also be accepted.
Gain Work Experience. Employers of Principal Sourcing Managers typically prefer to hire candidates with several years of experience in procurement, purchasing, or a related field. This experience can be gained through internships, entry-level positions, and working in other managerial roles.
Develop Knowledge of the Industry. A Principal Sourcing Manager should have an in-depth knowledge of their industry, including the various technologies, processes, and materials used in production and distribution.
Obtain Professional Certifications. Several certifications are available for sourcing and procurement professionals. Examples include the Certified Professional in Supply Management (CPSM) and Certified Purchasing Manager (CPM).
Be Familiar with Negotiation Processes. Principal Sourcing Managers should be proficient in negotiation processes and strategies. This includes understanding how to effectively negotiate terms and prices with vendors and suppliers.
Complete Additional Training. Completing additional training and continuing education courses can help to keep Principal Sourcing Managers up-to-date on industry trends and developments.

The success of any Principal Sourcing Manager depends on the ability to identify and secure the best possible sources of supply. This requires a comprehensive understanding of the market, careful cost analysis, and the ability to negotiate favorable terms. When successful, these efforts can result in increased profits, improved customer satisfaction, and a competitive edge.

However, if the sourcing process is not managed properly, it can result in higher costs, subpar quality and delivery, and an overall decrease in profits. Proper management of the sourcing process is thus essential for any Principal Sourcing Manager to achieve success.

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Job Description

Develop and execute sourcing strategies that are aligned with the organizations business objectives
Identify, assess and evaluate potential suppliers, leveraging best practices in supplier selection
Negotiate contracts and agreements with suppliers
Monitor and analyze supplier performance, ensuring compliance with contractual agreements
Develop and maintain positive relationships with current and potential suppliers
Monitor industry trends and provide insights to the organization on risks and opportunities
Lead the implementation of new sourcing initiatives and strategic sourcing projects
Analyze available data to identify opportunities for cost savings and improved efficiencies
Prepare reports and presentations for management regarding sourcing activities
Ensure compliance with all applicable laws, regulations, and company policies

Skills and Competencies to Have

Strategic Sourcing & Procurement Knowledge
Contract Negotiations & Management
Risk Management & Compliance
Strategic Thinking & Planning
Supplier Relationship Management
Market Intelligence & Research
Cost Analysis & Budgeting
Project Management
Business Acumen & Financial Acumen
Process Improvement & Automation
Leadership & Coaching
Communication & Interpersonal Skills
Problem-Solving & Decision-Making
Organizational & Time Management Skills
Data Analysis & Reporting

As a Principal Sourcing Manager, one of the most important skills to have is the ability to negotiate and effectively manage relationships with suppliers. Negotiating effectively with suppliers is essential for ensuring that a company is obtaining the best prices and terms for their goods and services. In addition, effective relationship management is crucial for developing long-term partnerships with suppliers.

Building and maintaining relationships with suppliers can help to ensure that companies are able to access the resources they need in a timely manner, as well as benefit from loyalty discounts and other incentives. having strong negotiation and relationship management skills can help to reduce costs, improve supplier performance, and ensure that a companys procurement processes are running smoothly.

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Frequent Interview Questions

What experience do you have with global sourcing and vendor management?
How do you manage complex sourcing negotiations?
What strategies have you used to reduce costs while maintaining quality in the supply chain?
Describe a successful global sourcing project you have implemented.
How do you ensure successful supplier performance?
What systems and processes do you use to keep track of sourcing activities?
How do you handle supplier disputes?
What do you consider to be the most important elements of a successful sourcing process?
What strategies do you use to build relationships with suppliers?
What challenges have you faced in managing global sourcing projects, and how did you overcome them?

Common Tools in Industry

Procurement Software. A tool to help automate and streamline the procurement process. (e. g. Coupa, SAP Ariba)
Supplier Relationship Management (SRM) Software. A tool to track and manage relationships with suppliers. (e. g. Ivalua, GEP SMART)
e-Auctions Software. A tool to facilitate online auctions for the purpose of purchasing goods or services. (e. g. Trade Extensions, Perfect Commerce)
Contract Management Software. A tool to create, store, and manage contracts electronically. (e. g. Contract Logix, EconoTrust)
Spend Analysis Software. A tool to analyze corporate spending data and identify opportunities for savings. (e. g. Rosslyn Analytics, SAP Ariba Spend Analysis)
Category Management Software. A tool to help manage the categories of goods or services a company purchases. (e. g. Ivalua Category Management, GEP SMART Category Management)
Request for Proposal (RFP) Software. A tool to help create and send requests for proposals to suppliers. (e. g. Procurify, BuyerQuest)
Strategic Sourcing Software. A tool to help with strategic sourcing of goods or services. (e. g. BravoSolution, GEP SMART)

Professional Organizations to Know

National Association of Professional Procurement and Sourcing Professionals (NAPPSP)
National Institute of Governmental Purchasing (NIGP)
International Public Procurement Association (IPPA)
Institute for Supply Management (ISM)
Association for Supply Chain Management (ASCM)
Chartered Institute of Procurement and Supply (CIPS)
Strategic Sourceror
American Purchasing Society (APS)
International Federation of Purchasing and Supply Management (IFPSM)
Global Purchasing Professionals Alliance (GPPA)

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Common Important Terms

Supply Chain Management (SCM). The management of the flow of goods and services, as well as the storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
Strategic Sourcing. A procurement process that involves assessing an organizations current and future needs and sourcing the most cost-effective and suitable suppliers to meet those needs.
Supplier Relationship Management (SRM). The practice of managing relationships with suppliers to ensure that their performance meets the organizations requirements and expectations.
Negotiation. The process of attempting to reach a mutually beneficial agreement between two or more parties by exchanging ideas, resources, and information.
Procurement. The process of obtaining goods or services from an outside source.
Contract Management. The management of all aspects of a contract, from negotiation and signing to monitoring performance and managing changes.

Frequently Asked Questions

Q1: What is the role of a Principal Sourcing Manager? A1: A Principal Sourcing Manager is responsible for developing and executing procurement strategies to ensure the timely and cost-effective procurement of goods and services. They oversee the supplier selection process, negotiate contracts, manage supplier relationships, and ensure compliance with applicable regulations and guidelines. Q2: What qualifications are required for a Principal Sourcing Manager? A2: To be qualified for a Principal Sourcing Manager position, individuals typically need a bachelor's degree in business or a related field, along with several years' experience in procurement, supply chain management, or a related field. Additionally, knowledge of relevant laws and regulations, as well as excellent communication, negotiation, and organizational skills are necessary. Q3: What types of goods and services does a Principal Sourcing Manager procure? A3: Principal Sourcing Managers typically procure a variety of goods and services, including raw materials, finished goods, equipment, tools, construction materials, production services, and office services. Q4: What is the scope of responsibility for a Principal Sourcing Manager? A4: The scope of responsibility for a Principal Sourcing Manager typically includes developing and executing long-term procurement strategies, analyzing market conditions, negotiating contracts and terms with suppliers, monitoring supplier performance, and ensuring compliance with internal policies and external regulations. Q5: What is the average salary for a Principal Sourcing Manager? A5: According to PayScale.com, the average salary for a Principal Sourcing Manager is $101,895 per year. However, salaries may vary depending on location, experience, and qualifications.

Web Resources

Procurement / Sourcing Manager - NC State Continuing and mckimmoncenter.ncsu.edu
SOURCING MANAGER - Duke University careers.duke.edu
Procurement / Sourcing Manager | NC State Online and Distance online-distance.ncsu.edu