What is Procurement Engineering?

If you search the web for “Procurement Engineering” you will find different job descriptions on websites like Stepstone or Monster but no further information about that function in procurement or engineering organizations around the globe. This is somehow surprising has the need for systematic involvement of procurement and supply chain management in the early phase of product development is emerging and gets more and more relevance. There is hardly no procurement conference where this topic is not on the agenda.  

I guess the reason is that in many cases the early involvement of procurement functions in R&D projects are done by chance and in most companies, there are no defined processes or methods how procurement is involved. The experience shows that managing the interface between R&D and procurement in an unsystematic way and hoping for the best does leave a lot of potential on the ground regarding cost-out, lead time, and quality.  

So, what is Procurement Engineering?  In a nutshell Procurement Engineering Management means the professional management of the interface between the R&D and the Procurement Organization. Normally PE is a part of Supply Chain Management and the members of the that function have a strong background in Procurement, but do have a very good understanding of R&D needs, process and mentality.  The major responsibilities of Procurement Engineering can be summarized as follows: 

  • Key Contact for Engineering and Product Management into the Procurement Organization 
  • Drives and Coordinates Early Supplier Involvement / Supply Chain Planning / Cost-Out Lever Roadmap / Ramp-up planning 
  • Executes with procurement team the procurement strategy within assigned project.  
  • Coordinates and Drives Procurement Activities to reach Target costs, Target lead time, and Capacity Requirements 
  • Ensures Reporting of Project Progress to Procurement Staff 

The Blog www.procurement-engineering.com will deal in detail with all these responsibilities of a professional PE organization and share the experience from decades of procurement and R&D collaboration.

Key Take away:  Procurement Engineering works as the key interface between Procurement and the R&D organization to ensure that new developed products are delivered for prototypes and serial production at the right time, right quality and lowest possible costs.

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