If you perform a search for “Procurement analyst” (PA), what is the result? One example is: 

“A procurement analyst, also called a purchasing manager or purchasing analyst, is a professional who evaluates and selects suppliers for a company. When an organization requires external items, materials or services, a procurement analyst can help find the right supplier. They conduct research and evaluate the suppliers in terms of cost, shipping speed and quality.” (Source).

Explaining the Procurement analyst role

Learn How to Source ((LHTS) build the knowledge base around roles and using above description do not fit since there is a mix of roles and activities. EFFSO’s description (translated from Swedish) of the role has a better fit with LHTS’s view of the procurement knowledge area: 

This role is pivotal in supporting the operative, tactical, and strategic layers of procurement by providing data-driven insights that enable informed decision-making. Let’s delve into the responsibilities, skills, and knowledge areas that define the Procurement Analyst’s position.

Core Responsibilities

A PA’s primary responsibility is to serve as the backbone of data for the procurement department. This involves collecting, analyzing, and managing data to provide actionable insights that support the procurement process. By doing so, a strong analyst enhances the credibility of the procurement function, ensuring that decisions are not based on intuition alone but are backed by solid facts.

Understanding of Key Procurement Processes

A profound understanding of the key procurement processes, such as Category Management and the Sourcing Process, is essential for a Procurement Analyst. This knowledge enables the analyst to identify critical data points and metrics that are vital for evaluating the effectiveness of procurement strategies and operations. By understanding these processes, the analyst can tailor their data analysis to provide relevant insights that aid in optimizing these functions.

Technical Knowledge of Goods or Services

The effectiveness of a PA is greatly enhanced by a working technical knowledge of the goods or services being procured. This expertise is crucial for accurately assessing market prices, understanding cost breakdowns, and applying value and cost-based pricing principles. Such knowledge not only aids in negotiating better terms with suppliers but also in identifying opportunities for cost savings and efficiency improvements.

Market Understanding

Preferably, a Procurement Analyst should have a solid grasp of the market and the driving forces that impact the company. This includes knowledge of supplier landscapes, technological advancements, regulatory changes, and economic factors that could influence procurement strategies. A deep understanding of these elements enables the analyst to forecast trends, anticipate market shifts, and advise on risk management strategies.

Communication and Presentation Skills

One of the most valuable skills a Procurement Analyst can possess is the ability to convert complex data into clear, insightful, and actionable information. Excellent communication and presentation skills are essential for articulating findings, making recommendations, and influencing decision-making processes. The analyst must be adept at presenting data in a way that is accessible and compelling to stakeholders, ensuring that insights lead to actionable decisions.

Job titles and competence requirement

Procurement analyst, Purchasing controller, Procurement Engineer, CVE (Cost-Value Engineer), there are many titles which would fit the job described by EFFSO. 

When it comes to competence requirement there is a 20-week course specialist course in Sweden, developed by the company One Academy (in Swedish), which describe the competence requirement in a good way. Among other things, the 20-week course include:

• Sourcing and category management.
• Market analyses methods including environmental monitoring and understanding of how political, economic, social, technical, environmental and legal factors can affect the business and the purchasing function.
• Finance and business systems (and Excel, Power BI and Power Pivot) and Master data management.
• Business Intelligence and digitization including Block-chain, RPA and AI.
• Project- and change management.
• Communication and presentation skills.

Adding should-cost and cost break-down to the list from One Academy and we have a good description of competence requirements.

Key processes for the Procurement analyst role

The key processes, where the procurement analyst can make a difference, are Category Management and Sourcing process.

During development of the Baseline and when generating pipeline of opportunities, the Analyst have an important role.

Sourcing process:

In step 2 Current status, the procurement analyst support with an as-is analyses for the product/service in question. In stage 4 and stages 5/6 the analyst can support with market understanding and cost breakdowns.

Tools available:

As defined by One Academy there are a range of tools required to convert data to decision-support. One example of an advanced and interesting tool comes from the company shouldcosting GmbH. They have several applications:

Advanced Engineering with Predictive Costing. 

More than 80% of Manufacturing Costs are determined in Product Development. Engineers and Project Managers therefore, need plausible and reliable Calculations of Manufacturing Costs for Components and Assemblies – directly in the CAD System. The CostChecker calculates Manufacturing Costs of Components and Assemblies with high Precision and within Seconds. With AEPC – automated enterprise product costing even fully automated. Whether milled parts, turned parts, sheet metal parts, castings, cables …

Validate Prices and costs of Suppliers

“Prices for raw Materials are volatile. Price markups from Suppliers must be validated. DMA – Dynamic Materialcost Adjustment helps our Customers, to maintain an Overview at all times. With a direct link to raw Material Databases, they know the Material Costs of their Components at the push of a Button.” Quote from Shouldcosting.

If you would come in contact with Shouldcosting please contact Jens Byland.

If you want to learn more

An introduction to the role is available at LHTS in the course “Procurement analyst role“. The course present following: 

• A PA’s responsibility within a company is to support the operative, tactical and management roles with data and enable fact-based decisions. A strong analyst provide a high level of credibility to the procurement function.
• The role must have a good understanding of  the key procurement processes, as Category management and Sourcing process, are essential.
• Having a working technical knowledge of the goods or services being purchased is important for procurement analysts in order to facilitate the access to (for example) correct market price and connected cost break down ( including value and cost based pricing principles).
• Preferable the Procurement analyst understands the market and connected driving forces which the company meet.
• Communication and presentation skills assure conversion of data to insights and decision support.

The role of a Procurement Analyst is multifaceted and integral to the strategic functioning of the procurement department. Through a combination of deep process knowledge, technical expertise, market understanding, and strong communication abilities, the Procurement Analyst plays a crucial role in enabling the procurement function to make informed, data-driven decisions. As such, the value of a skilled Procurement Analyst cannot be overstated, serving as a cornerstone of strategic procurement and a driver of organizational success.

About Learn How to Source

Learn How to Source (LHTS) is an online platform based in Sweden, offering a range of procurement courses accessible globally. It serves as a community where procurement experts share their knowledge through online courses, designed for various experience levels from introductory to expert. Courses are concise, about 30 minutes each, and cover different aspects of procurement, tailored for different buyer roles. The courses focus on practical knowledge, presented by seasoned professionals, and includes quizzes and certificates. They can be accessed from any device, emphasizing micro learning for flexibility and efficiency. Hope you have enjoyed the blogpost Conflict minerals in the supply chain influence procurement.

Note: Illustration to the blogpost “Procurement analyst role – what does it mean? – Case” is a cut from Shouldcosting on July 25, 2022.