After receiving numerous requests for procurement interview questions, I created a guide with 15 of the most commonly asked procurement interview questions and answers for both experienced professionals and newcomers.
Interviewing for a procurement job requires more than just technical know-how and experience. You must be prepared to answer interview questions that showcase your knowledge of the field, as well as your organizational, communicative, and problem-solving skills.
As a hiring manager, you can also use these questions to recruit buyers and commodity managers. Read further to understand the concepts behind each question and avoid common mistakes.
Get ready for your procurement job interview by reviewing this comprehensive guide of potential interview questions and answers. Let’s prepare for your procurement interview together!
In case you want to access the full list of 25 Procurement Interview Questions and Answers PDF including the 15 covered below, click on the button below:
[Read More: Top 27 Supply Chain Interview Questions and Answers]
The Significance of Procurement Interview Questions for Successful Hiring
As an employer, it is essential to ask the right procurement interview questions to identify the ideal candidate for the procurement position. Proper procurement interview questions can help you understand the candidate’s qualifications, skills, and suitability for the role.
The Different Types of Procurement Interview Questions
There are various types of procurement interview questions, including situational questions, behavioral questions, and technical questions. Each type assesses different aspects of the candidate’s procurement expertise, communication skills, and ability to solve problems.
Technical Procurement Interview Questions
Technical procurement interview questions focus on the candidate’s knowledge of procurement processes, regulations, and industry standards. These questions assess the candidate’s technical abilities and understanding of the procurement field.
Behavioral Procurement Interview Questions
Behavioral procurement interview questions aim to understand how the candidate has dealt with situations in the past. These questions assess the candidate’s communication, problem-solving, and decision-making skills.
Situational Procurement Interview Questions
Situational procurement interview questions present hypothetical scenarios that the candidate may face in the role. These questions assess the candidate’s ability to think on their feet, handle pressure, and make sound decisions.
The Top 15 Interview Questions for Procurement
Q1: As a professional in Procurement, what would you say is the difference between Strategic Sourcing and Purchasing?
Strategic sourcing is a procurement process that extends beyond traditional purchasing. It focuses on building and maintaining relationships between buyers and suppliers in order to leverage their capabilities and achieve cost efficiencies for the customer. On the other hand, purchasing is a transactional process of acquiring goods or services.
If you want a more detailed answer, check out our frequently read and quoted blog post on “Strategic Sourcing vs. Purchasing – 7 Key Differences“. We also have a comparison between “Purchasing vs. Procurement – Key Differences” that can further substantiate the above answer.
In addition, we recommend reading about the 7 step strategic sourcing process, which has been proven and practiced in the industry. And, if you’re interested in learning more about the sourcing process, we suggest taking Maryna’s awesome course on the topic.
Being prepared with these types of answers will help you ace your procurement interview and show that you have a deep understanding of the industry.
Q2: How would you define incoterms using some leading examples?
Incoterms are standard trade definitions used in international trade to define the responsibilities of buyers and sellers. They were first introduced by the International Chamber of Commerce (ICC) in 1936 and have since been updated to reflect changes in the global trade landscape.
Some leading examples of incoterms include:
- FOB (Free on Board): This means that the seller is responsible for loading the goods onto a vessel at the port of shipment. The buyer takes ownership and responsibility for the goods once they are on board the vessel.
- CIF (Cost, Insurance, and Freight): This means that the seller is responsible for arranging and paying for the cost of transportation and insurance of the goods to the port of destination. The buyer takes ownership and responsibility for the goods once they have arrived at the port of destination.
- EXW (Ex Works): This means that the seller is responsible for making the goods available at their premises. The buyer takes ownership and responsibility for the goods once they have been collected from the seller’s premises.
Understanding incoterms is crucial for professionals in procurement and foreign trade management. It ensures that there is clarity and agreement between the parties involved in an international trade transaction. Amongst the procurement interview questions, nailing the definition of incoterms is essential. For more information on foreign trade management, check out the blog post “Lifetime Basics of Foreign Trade Management – 3 Things You Need To Know“. It covers everything you need to know about trade management.
Q3: What approach and definition do you apply to purchasing?
When it comes to purchasing, it does well to apply a structured approach that involves defining clear specifications, identifying potential suppliers, comparing and evaluating them, negotiating contracts, and managing supplier relationships. This approach ensures that the goods or services acquired meet the needs of the business at the best possible value.
As part of this approach, you should compare and evaluate suppliers based on factors such as quality, price, delivery time, and reliability. I also involve internal customers in the process to ensure that their needs and requirements are taken into account.
In addition, I believe that supplier negotiations are an important part of the purchasing process. This allows for open communication and the potential for mutually beneficial outcomes.
It’s important to note that purchasing is just one aspect of the broader procurement process. As a procurement professional, it’s essential to understand the difference between procurement and purchasing, as well as the nuances between them. With the provided response in this Procurement Interview Questions, you can learn the difference between procurement and purchasing, including how suppliers are compared and awarded, specifications, which internal customers are involved, and whether internal stakeholder negotiations are allowed.
To further enhance your understanding of procurement and purchasing, I recommend taking Maryna’s awesome course on “Introduction to Procurement” available at SCMDOJO. This course will provide a great starting point for gaining a deeper understanding of procurement processes and strategies.
Q4: Which procurement problem are you currently facing and what solution have you applied?
There is a variety of problems currently facing the procurement division. The mark of excellence here is how well thought out the response is. You can maintain going deeper and more profound until you get satisfied. In this question, the interviewer wants to know how broad your experience is in solving procurement problems. Make sure you think hard and find the best problem you (not your team members) have solved, what was the scenario, what approach you have taken and what was the outcome.
One procurement problem I faced in the past was a supplier who consistently delivered defective products, causing delays and additional costs. To address this issue, I first thoroughly analyzed the supplier’s production process and identified several areas for improvement. I then had a candid conversation with the supplier, explaining the issues we had been experiencing and providing specific examples. We developed an action plan together that included process improvements, additional quality control measures, and regular performance reviews.
After implementing these solutions, we saw a significant decrease in defective products and an improvement in delivery times. Our partnership with the supplier also grew stronger, as we worked together to improve the quality of their products. This experience taught me the importance of proactive communication and collaboration with suppliers to address issues and achieve better outcomes for both parties involved.
If you want to learn more about how to handle procurement problems and challenges, we recommend checking out our blog post on “Top 17 Challenges Faced in Procurement Management and their Solutions“.
Q5: What was your best/favorite negotiation; and why was it your best?
The responses you get will tell you more about the candidate’s definition of value. With this Procurement Interview Question, you get a better view of his/her interpretation of values, style and interpersonal skills.
One of my favorite negotiations was with a supplier who was initially hesitant to agree to the terms of our contract. Instead of resorting to aggressive tactics, I took a collaborative approach by first understanding their concerns and goals. I then presented alternative solutions that addressed their concerns while still meeting our needs.
By taking the time to understand their perspective and priorities, we were able to negotiate a mutually beneficial agreement that exceeded our initial expectations. This approach not only resulted in a successful negotiation but also established a stronger partnership with the supplier.
For me, the best negotiations are those that result in win-win outcomes, where both parties feel that their interests and needs have been met. It’s about building trust and cultivating long-term relationships that are based on mutual respect and collaboration.
If you want to learn more about effective negotiation strategies in procurement, we recommend checking out the resources available on CIPS or reading this Forbes article on “Six Surprising Negotiation Tactics That Get You The Best Deal“.
Q6: Have you managed Indirect Procurement spend and how is it different from Direct Procurement?
When it comes to procurement, it’s essential to understand the differences between direct and indirect procurement. As highlighted in our blog post “Purchasing vs. Procurement – Key Differences,” the evolution of purchasing to procurement has been significant. The strategic importance of procurement has increased, and it’s often a source of competitive advantage. Direct procurement deals with the acquisition of goods and services that are directly related to the manufacturing process. In contrast, indirect procurement deals with goods and services that are not directly related to production, such as office supplies, travel, and utilities.
If you’re interviewing a procurement professional, it’s essential to ask if they’ve managed indirect procurement spend and how it differs from direct procurement. This Procurement Interview Question will give you insights into their experience and understanding of the procurement process.
In my opinion, indirect procurement is a diverse and crucial component of procurement that has been largely ignored in procurement content. It represents only a small portion of manufacturing firms’ expenditures, but it has significant potential for cost savings and process improvements. To learn more about indirect procurement, I recommend reading the blog post “What is Indirect Procurement? – All You Need To Know” and exploring the resources available on CIPS.
By asking this Procurement Interview Question and understanding the differences between direct and indirect procurement, you can better assess a candidate’s suitability for your organization and the role you’re hiring for.
Q7: What is supplier performance measurement? And how have you improved supplier performance?
Supplier performance measurement is a crucial part of procurement, as it involves evaluating, measuring, and monitoring supplier performance and their business processes and practices. The process of supplier performance management aims to reduce costs, mitigate risks, and drive continuous improvement. It is a proactive approach that helps companies focus their resources on value-added activities rather than addressing the problems caused by poor supplier performance, such as defects, rush, excessive inventory, delayed delivery to customers, shutdowns, and reduced market competitiveness.
To measure supplier performance, Key Performance Indicators (KPIs) are used to focus on critical success factors such as cost reduction and quality improvement. Performance management helps reduce conflict arising from causes such as goal confusion and unclear expectations. It facilitates cross-functional and cross-organizational teamwork and relationships, clearly defines shared goals, and enables direct comparison of year-on-year performance to identify improvement or deterioration trends.
Improving supplier performance is an ongoing process that requires collaboration, communication, and monitoring. In my experience, one effective way to improve supplier performance is to establish a Supplier Relationship Management (SRM) program that enables companies to build strong and long-lasting relationships with their suppliers. This approach involves working closely with suppliers, identifying their strengths and weaknesses, and setting mutual goals and objectives to improve performance. The SRM program includes regular communication, feedback, and recognition of supplier achievements, which can motivate suppliers to achieve better performance levels.
To summarize, managing supplier performance is essential for reducing costs, mitigating risks, and driving continuous improvement. Using KPIs to measure supplier performance can help companies focus on critical success factors, reduce conflict, and improve communication. Establishing an SRM program can help companies build strong and long-lasting relationships with their suppliers and improve their overall performance.
Q8: How would you manage your supplier development strategy and activities if you have only one in a country?
To manage supplier development strategy and activities with only one supplier in a country, it is important to take a strategic approach. As a procurement professional, you need to work closely with your supplier to identify areas of improvement and implement initiatives to enhance their performance. This can be done through a supplier development program, which involves a set of well-planned and structured activities aimed at improving supplier quality, delivery, and cost.
If you’re not sure where to start, there are a wealth of resources available to help you develop and implement a supplier development program. For example, you can refer to the articles written by experts on supplier development, such as:
- “Are You More Like a Reactive or Strategic Supplier Development Professional?“
- “Supplier Development Programme in Lean Six Sigma and SME Context“
- “20 Well Researched & Proven Supplier Development Activities You can Apply“
- “Brief Guide to Supplier Quality & Supplier Development“
- “5 Supplier Development Initiatives to Create Improvement Projects“
- “What is Direct and Indirect Supplier Development Process?“
By leveraging these resources and working closely with your supplier, you can create a robust supplier development strategy that not only improves their performance but also strengthens your relationship with them. This will help you to achieve cost efficiencies and build a competitive advantage in the market and also answer this Procurement interview question with ease.
Q9: What are your targets and goals if you are hired?
When asked about your targets and goals if hired as a procurement professional, it can be challenging to articulate your ambitions succinctly. However, to guide your thought process and help you answer this question effectively, I have produced a vlog that offers valuable insights. It will assist you in aligning your objectives with the organization’s mission and vision, and communicate your aspirations in a clear and concise manner.
Q10: What is your procurement risk management strategy against unreliable suppliers?
As a procurement professional, it’s essential to have a robust procurement risk management strategy in place to mitigate the impact of unreliable suppliers. This includes identifying potential risks and taking proactive measures to minimize their impact on the supply chain. In this Procurement Interview Question, the interviewer wants to assess your understanding of supply chain risk management and how you would handle unreliable suppliers.
To answer this question, it’s crucial to be familiar with supply chain risk management principles and techniques. To assist you, I recommend reading my blog posts on 10 Supply Chain Risks You Need to be Mindful of to Avoid Disruption and 7 Supply Chain Risk Villains You Might Need to Fight Against. These resources will give you a good understanding of the key risks and challenges that procurement professionals face when dealing with suppliers.
To address the issue of unreliable suppliers, I would implement a risk management plan that includes regular supplier assessments, performance monitoring, and contingency planning. This would involve setting clear performance metrics and thresholds, regularly monitoring supplier performance against these metrics, and taking appropriate action when necessary. Additionally, I would establish a contingency plan that outlines alternative sourcing options and backup suppliers to minimize the impact of supplier disruptions.
By demonstrating your knowledge of supply chain risk management principles and techniques, and your ability to develop and implement effective risk management strategies, you can prove your value as a procurement professional and enhance your chances of success in the interview.
Q11: What are your biggest Procure to Pay challenges?
Procure to Pay is a critical process within procurement and can present many challenges. One of the biggest challenges is ensuring that the process is as streamlined as possible, from requisition to payment. This involves managing various tasks, such as purchase orders, approvals, invoice processing, and payments. Other challenges can include issues with supplier management, contract compliance, and data accuracy. To prepare for this question, it is essential to reflect on your own experiences and identify the most significant Procure to Pay challenges you have faced. Additionally, you can check out our blog post on the “6 Procure-to-pay (P2P) Mistakes That Are Crippling Your Procurement Resources” to gain more insights on this topic. With this knowledge, you can demonstrate your ability to analyze and improve procurement processes and show how you can add value to the organization.
Q12: How do you manage your relationship with your supplier?
Managing relationships with suppliers is a critical aspect of the procurement function. As a procurement professional, it is important to build and maintain strong relationships with suppliers in order to achieve cost efficiencies and maximize value for the customer. When asked about how you manage your supplier relationships in an interview, it is essential to demonstrate your technical knowledge and understanding of the importance of this area.
To help you prepare, we recommend reading the article “10 Must Have Customer Supplier Relationship Areas – How Many You Have?” which provides a theoretical framework for managing supplier relationships. Additionally, “Supplier Partnership Vs Traditional View of Supplier Management” is another useful resource to understand the different approaches to managing supplier relationships.
Remember, being well-prepared for this question will show the interviewer that you are serious about the procurement profession and have the necessary knowledge and skills to excel in this field. So, make sure to study up on supplier relationship management as it is one of the most frequently asked procurement interview questions.
Q13: Give an example where you had to lead a cost reduction programme.
Cost reduction is a crucial aspect of procurement, and it requires effective leadership to successfully implement such programs. As a procurement professional, I have led several cost reduction programs in my career, and one that particularly stands out is when I was responsible for sourcing raw materials for a manufacturing company.
The company was facing challenges with their existing supplier who was unable to deliver materials on time, resulting in production delays and increased costs. I analyzed the market and identified new suppliers who could provide quality raw materials at a lower cost. I worked closely with the suppliers to negotiate pricing and delivery terms to ensure timely delivery of materials to the manufacturing plant.
I also implemented several cost-saving measures, such as consolidating orders to take advantage of bulk discounts and reducing the number of deliveries to cut transportation costs. Additionally, I collaborated with the production team to ensure that inventory levels were optimized, which further reduced costs.
My leadership and initiative led to a significant reduction in the cost of raw materials by 20%, and production lead times were reduced by 30%, resulting in improved efficiency and customer satisfaction. This experience is a testament to my ability to lead cost reduction programs successfully.
As a procurement professional, it is essential to strike a balance between cost reduction and other supply chain KPIs, such as inventory levels, on-time delivery, and lead time reduction. To that end, I have written an informative blog post on “27 Uplifting Cost Reduction Strategies You Should Try” which I believe will be helpful to other procurement professionals looking to lead cost reduction programs while also optimizing other key supply chain metrics.
Q14: What are the key procurement KPIs and how you have used them to drive improvements?
As a procurement professional, it’s important to understand and utilize key procurement KPIs to drive improvements in your organization. Procurement KPIs, or Key Performance Indicators, can vary depending on the business, but they are essentially metrics used to measure the performance of the procurement team and process.
Some common procurement KPIs include savings achieved, supplier performance, on-time delivery, contract compliance, and inventory levels. By tracking and analyzing these metrics, procurement leaders can identify areas for improvement and take action to drive better performance.
For example, I have used savings achieved and supplier performance KPIs to drive improvements in my organization. By setting clear targets and tracking progress regularly, we were able to negotiate better deals with suppliers and reduce costs while maintaining quality.
It’s important to note that procurement KPIs can vary depending on the organization’s goals and objectives. To prepare for comprehensive answers on this topic, I recommend reading “Top 16 Procurement KPIs – The Ultimate Guide” to gain a deeper understanding of common procurement KPIs and how they can be used to drive improvements in your organization. By being well-prepared and knowledgeable about procurement KPIs, you can demonstrate your expertise and value to potential employers during procurement interviews.
Q15: What have been the most significant achievements in your procurement career?
When asked about your achievements in your procurement career, it’s important to have a clear and concise response that showcases your expertise in the field. As mentioned in our previous answer, the processes and steps taken in procurement are fundamental to measuring success on the job.
One way to demonstrate your knowledge and experience is by discussing specific examples of successful procurement projects or initiatives that you have led or contributed to. This can include cost savings achieved, improved supplier relationships, streamlined processes, and innovative solutions implemented.
It’s also important to highlight how you measured the success of these achievements using procurement KPIs (Key Performance Indicators) and metrics. These metrics help to quantify the impact of your efforts and provide valuable insights for future procurement projects.
Remember, being prepared with specific examples of your achievements will help you stand out in your procurement interview and showcase your expertise in the field.
If you feel like you need to improve your knowledge and skills in commodity/category strategy, we recommend taking SCMDOJO Maryna’s Introduction to Category Management course. This course is a great resource for anyone looking to expand their understanding of category management and develop their procurement expertise.
The Key to a Successful Procurement Career
In conclusion, being prepared for a procurement interview is key to landing your dream job. With these 15 essential procurement interview questions and their answers, you’ll have a good foundation to showcase your knowledge and expertise in the procurement industry. Remember to focus on the differences between strategic sourcing and purchasing, as well as the importance of procurement KPIs and metrics in measuring the performance of the procurement process. Additionally, sharing your most significant achievements in your procurement career and demonstrating your understanding of commodity/category strategy can make a significant impact in your interview. With these tips and resources, you’ll be on your way to acing your procurement interview and advancing your career in the field.
Ph.D. Thesis – Enhanced Supplier Development Framework: a systematic approach to improve supplier performance
About the Author- Dr Muddassir Ahmed
Dr MuddassirAhmed is the Founder & CEO of SCMDOJO. He is a global speaker, vlogger and supply chain industry expert with 17 years of experience in the Manufacturing Industry in the UK, Europe, the Middle East and South East Asia in various Supply Chain leadership roles. Dr. Muddassir has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and founded the leading supply chain platform SCMDOJO to enable supply chain professionals and teams to thrive by providing best-in-class knowledge content, tools and access to experts.