These questions have been extensively used in various interviews and helped us to identify whether the candidate was or is the right one. Beside the focus on Procurement Engineering I would always recommend preparing a list of questions you want to ask as a kind of checklist to ensure that you ask the different candidates the same. Make notes during the interview. So more details you have so better. At the end of the interview make a summary. After you had all the interviews, sit down and review all interviews with your written notes. This prevents that you automatically select one of the last candidates as they are more present in your memory. I added to every question some background information why you should ask exactly this question and what is the expectation.
What experience do you have in product development specifically as it relates to supplier involvement? What are the typical challenges and obstacles?
Procurement Engineers act as the interface between Engineering and Procurement in development projects. It is necessary to know whether the candidate has already some experience here. With feedback on challenges and obstacles you are able to judge how broad the experience is.
What are the most effective levers to reduce cost? Which ones have you personally used?
Procurement is regarded as one of the most effective organizations within the company to drive cost-out. It is better to avoid cost in the beginning rather then work hard later to get costs-down again. A proper candidate should know the available tools to drive cost-out in the early stages of a development.
What experience do you have in the development of products based on cost targets (i.e. product target cost development)?
This question is more about the moderating and communication skills of the candidate. Experience shows that cost targets are pretty often not equally treated as i.e. performance or schedule targets L. The role of a PE is pretty often to convince / motivate everybody in the team to accept the cost target as real and hard target.
What do you know about the product development process? Have you ever participated in product reviews before?
Is the candidate aware how a product is developed? Does he know when the right time is to bring in the procurement view. Does he know which the critical topics Procurement are should look at in design reviews. Is he able to develop a checklist for design reviews from procurement point of view.
What experience do you have leading teams? Technical vs. non-technical topics? Domestic vs. International?
Procurement Engineers rely on the expertise of commercial and technical procurement colleagues. He/she has to orchestrate the information flow and pull the right information. Which experience is available in leading and motivating such a team without have the disciplinary responsibility.
Project management experience – how much, give examples, certified? etc.
Obvious. Procurement Engineers are project managers.
Strategic procurement experience – how much, give examples, etc.
The perfect candidate has commercial and technical background. If the candidate states, there is commercial background. Where did she/he gain that experience. Did she/he work in operative or strategic procurement?
Experience harmonizing and implementing technological strategies with procurement strategies
Puuuuuuh … unfortunately … and this seems to be a law of nature … there is always a conflict between the technology roadmap and the interest of procurement. The candidate needs the right skill set to develop here a strategy which ensures the right balance between the technology needs and procurement interests.
Please rank the step “cost analysis of a procured component” compared to other steps in the “Early Supplier Involvement Process”
Learn and understand from the candidate how she/he structures the “Early Supplier Involvement Process”. Does she/he have a structure at all? Is she/he aware of all necessary steps?
How does a perfect team look like for you?
It is cross-functional. As a leader you also must ensure the you have the right mix between experience and young people which are there also to learn ….
What is the most complicated excel formula you know?
Does she/he tends to delegate all of the grunt work or get he/she things done on her/his own?
50% of the costs for a forged component are due the raw material. The raw material consists of 96.5 % of iron and 3.5 % of nickel. The costs for Nickel are 100 times higher than for Iron. How much does a nickel reduction from 3.5 to 3 % reduce the costs for a forged component?
A right answer to that questions demonstrates that she/he is able to judge whether price/cost increases due to design changes can be real or driven by other things. Test yourself …
Why shall we select you?
Thanks a lot for the compilation of interview questions! Really helped me to get started in structuring my upcoming interviews.
Especially the last one I used in various interviews for cost engineers. It does take up some time in the interview, but provides a good insight into candidates thinking and approach as well as attitude towards a task which might not be solved right at first.
Below my approach for solving it:
1. Use variables and a piece of paper. I use:
C – Cost of the forged component before material change
Cnew – Cost of the forged component after material change
i – unit cost for iron
2. Understand cost structure before material change:
– Raw material weight is 96,5% Iron and 3,5% Nickel.
– Nickel unit cost can be stated as multiple of Iron unit cost – 100*i.
– Other costs: 50% is raw material => other cost are same value as raw material cost
Forging cost as multiple of iron unit cost
0,965*i (Iron cost)
+ 0,035*(100*i) (Nickel cost)
+ 4,465*i (Other cost = Iron cost + Nickel cost)
3. Calculate material change impact to cost structure:
Forging cost after material change
0,97*i (Iron cost – increased to 97% of weight)
+ 0,03*(100*i) (Nickel cost – decreased to 3% of weight)
+ 4,465*i (Other cost – assumed constant)
Cost impact of material change
Cnew / C – 1= -5,5%
4. Formulate the result in order to do sanity checks, e.g. with subject experts:
“Reducing Nickel content in a forging by 0,5% reduces forging cost by ~6%” – the order of magnitude sounds reasonable 🙂