Career paths in supply chain management are on the rise. The position of chief procurement officer is becoming more popular as logistics strategy has expanded and requires dedicated supply chain executives to lead impactful teams. Supply chain managers can also contribute in helping companies move toward a more sustainable supply chain. As you're planning your supply chain management career, it's important to ensure you are equipped with the necessary training, education, and skills to be successful in your role.
Here, we further explore the position of a chief procurement officer: how you can become one, the necessary education and logistics skills required to do the job, and the important role it plays in the supply chain.
What does a chief procurement officer do?
In supply chain management, the procurement team maintains oversight of purchasing and logistics. Supply chain management professionals work together to provide excellent quality control, organization, use, and disposal of the raw materials needed for a company to provide goods and services. This role is slightly more specialized than that of a supply chain manager, which is typically responsible for end-to-end supply chain functions, or an operations manager. While procurement leaders are responsible for strategic sourcing and oversight of actual materials, the procurement function goes hand-in-hand with strategic logistics. Purchasing managers and logistics managers in the supply chain work closely together to ensure materials are delivered accurately, on schedule, and undamaged.
You can start out in a variety of procurement, logistics and supply chain roles before you are promoted to an executive role in supply chain management. The role you choose may depend on a number of factors, salaries do vary between the two supply management areas of procurement and logistics. While a logistician's salary averages around $74,600 per year, a procurement manager has an average salary of $81,173 per year.
However, before a supply chain professional plans a career path toward the executive level, it's important to ask—what does a chief procurement officer do? A chief procurement officer is responsible for maintaining complete oversight of the procurement process. With the influence of AI and machine learning on the supply chain, chief procurement officers play a key role in minimizing the level of resources used on procurement functions. Chief procurement officers must have excellent organizational and communication skills in order to run a lean, automated procurement shop that is focused on meeting the operational and financial goals of an enterprise.
Steps to becoming a chief procurement officer
The procurement strategy in supply chain management is critical for the overall success of a company's supply chain. Depending on the size of the corporation, a chief procurement officer is needed to maintain oversight of each procurement function, including purchasing and monitoring various procurement agents both within and outside of the company. Chief procurement officers must believe in the power of procurement, and the ability to transform through transactions. The procurement industry has the ability to influence the environment in a significant way, thereby making the role of a chief procurement officer appealing to those who are interested in making a difference.
The steps to becoming a chief procurement officer may take years, depending on your level of education and experience. In order to become a chief procurement officer, you must ensure you are equipped with the necessary experience and education to fulfill the duties of the role. If you're lacking in supply chain education, there are a variety of educational facilities that offer rigorous training.
Because a chief procurement officer is an executive level position, procurement professionals should first seek guidance with respect to planning a career path. This step includes familiarizing yourself with chief procurement officers across a number of industries to ensure you have a full understanding of the position's role and responsibilities. Reviewing the following chief procurement officer appointments will allow you to gain an understanding of the fields that are hiring for this role and the goals they aim to accomplish:
- Honeywell: In February 2018, Honeywell appointed Robert Vislosky as their new chief procurement officer. According to Markets Insider, Vislosky will be responsible for the "execution of the Company's global procurement and sourcing strategy."
- American International Group (AIG): In June 2019, AIG announced its new chief procurement officer Michael O’Malley. According to Market Screener, O’Malley will be "responsible for the strategy and performance of all sourcing and procurement services across AIG… [and] collaborate with senior leaders across the company to further align procurement systems with business goals."
- Avon: In January 2019, David Hernandez became the new chief procurement officer for Avon. According to Supply Chain Digital, Hernandez will "be responsible for designing and implementing a procurement function to support value chain transformation."
- CNA: In April 2018, CNA appointed Doug Kortfelt as their new senior vice president and chief procurement officer. According to PR Newswire, Kortfelt will be "responsible for leading CNA's Enterprise Vendor Management and Procurement teams."
- Duke Energy: In November 2018, Duke Energy appointed Melody Birmingham-Byrd as vice president and chief procurement officer. According to Oil & Gas 360, Birmingham-Byrd will be "responsible for Duke Energy's sourcing and supply chain functions for both the company's regulated and commercial operations."
Whether you are looking for entry-level positions or other career opportunities in manufacturing or inventory, procurement and logistics management roles are a great way to prepare yourself for an executive procurement role. Chief procurement officers earn a median salary of $177,103 per year. The role usually carries an annual bonus on top of a base salary, which PayScale estimates to be approximately $40,000 per year, on average. The following supply chain roles are a great way to start your career path toward a chief procurement officer:
- A warehouse manager earns an average salary of $52,516 per year, with an average of $5,000 per year in bonuses and $10,000 per year in commissions.
- An inventory manager earns an average salary of $52,624 per year, with an average of $3,000 per year in bonuses and $5,000 per year in commissions.
- A supply chain analyst earns an average salary of $59,297 per year, with an average of $3,000 per year in bonuses and $17,500 per year in commissions.
- A logistics manager earns an average salary of $65,149 per year, with an average of $3,000 per year in bonuses and $17,500 per year in commissions.
- A purchasing manager earns an average salary of $65,927 per year, with an average of $5,000 per year in bonuses and $6,500 per year in commissions.
- A supply chain consultant earns an average salary of $84,044 per year, with an average of $6,000 per year in bonuses and $26,000 per year in commissions.
Education needed to become a chief procurement officer
Many executive jobs require higher education, and a chief procurement officer position is no different. While the specific desired qualifications will vary depending on the company, most companies require that your highest level of education be a master's degree in order to ensure you've honed your leadership and supply chain management skills. A master's degree is also a great option for those who have completed a bachelor's degree that doesn't apply to the supply chain field. The education needed to become a chief procurement officer must carry a foundation in the field of supply chain management, with supportive and expert faculty that can guide you through the process of learning the trade of the industry. Many procurement leaders and purchasing managers in supply chain management possess the industry knowledge to lead effective procurement and purchasing functions but lack the leadership and oversight skills to inspire change and lead people involved in the supply chain.
As a chief procurement officer, you must be able to handle complex purchasing issues, such as a split supply chain. When Gap and Old Navy announced their split in February 2019, their supply chains had to go back to the drawing board and figure out how they would each lead operations separately. Furthermore, with the growing trend of AI in logistics, chief procurement officers must face the growing demand from chief executive officers and other corporate leaders to improve performance and remove inefficiencies. Not only does AI create a more efficient logistics operation, it also allows companies to enhance the customer experience by using AI assistants to track shipments and provide a clear image to customers on the status of their shipped goods.
Best programs for becoming a chief procurement officer
The best programs for becoming a chief procurement officer are available from highly regarded institutions, such as the online MS in Supply Chain Management (MSSCM) from the UT Haslam College of Business. A lot of changes are emerging for purchasing managers, such as the use of the blockchain in logistics. Completing a graduate program, such as Haslam's top-ranked online MSSCM will allow you to achieve the following:
- Get ahead in your organization: If you already work in the supply chain industry, and want to stay ahead in this ever-changing field, an online MSSCM will give you the skills to do just that.
- Broaden your skills and career path: Degrees in related fields like engineering or finance apply directly to supply management and can be supplemented and enhanced through a supply chain degree, which will allow you to grow your career.
The procurement process in supply chain management is complex. With big companies like Amazon making promises to increase transparency and reduce its carbon footprint, other companies will start aiming for similar goals. This means key stakeholders, such as the chief procurement officer, must be equipped to implement strategic sourcing that will result in the goals of the organization. Chief procurement officers should be constantly looking for ways to improve, streamline, and refine operational functions. An efficient procurement process will allow other parts of the supply chain to achieve their goals as well. If purchasing is optimized, an enterprise will witness increased revenue, improvements in consumer satisfaction and safety, better global relations, and sustainability.
Start your supply chain career at the UT Haslam College of Business
If you're interested in becoming a chief procurement officer, Haslam offers an excellent MS in Supply Chain Management. The program—taught entirely online—is led by expert faculty that is recognized around the world. Being able to complete the program online allows you to grow your knowledge and skills while refraining from putting your life or career on hold.
For those looking to make an impact on their current organization immediately and want to expand their role, Haslam also offers an Executive MBA program for global supply chain, that can be completed in less than a year. Minimal time away from work and immediate application of the concepts help organizations manage workstreams while expanding their supply chain discipline.
Finally, Haslam offers a wide variety of resources for online MSSCM graduate candidates, such as the Global Supply Chain Institute (GSCI). Learn more about the GSCI and Haslam's online MSSCM today.