WHAT DOES A COMMODITY MANAGER DO?
Updated: Dec 26, 2024 - The Commodity Manager develops and executes a global supply chain strategy to optimize supplier on-time delivery, reduce inventory, and improve supplier quality and lead times. This role involves driving supplier management initiatives by rationalizing the supply base, enhancing supplier relationships, and implementing strategic sourcing from low-cost countries. The manager also promotes continuous improvement through performance metrics, cost-saving programs, and participation in new product implementation and value engineering teams.
A Review of Professional Skills and Functions for Commodity Manager
1. Commodity Manager Tasks
- Contract Compliance: Manage supplier and internal compliance with contract terms and conditions.
- Continuous Improvement: Drive continuous improvement efforts and cost reduction.
- Contract Management: Prepare, review, and execute contract documents.
- Contract Maintenance: Maintain contracts by milestone schedules, expiration schedules, and/or market or competitive events that activate renegotiations.
- Relationship Building: Build and maintain supplier and internal customer relationships.
- Customer Support: Committed to supporting manufacturing and/or internal customer needs on projects.
- Commodity Leadership: Lead and develop given commodities to obtain a competitive position for the best cost, quality, and lead time.
- Supplier Development: Take a leadership role in selecting and developing suppliers within their commodities to achieve corporate and department goals.
- Technology Exploration: Explore technologies within assigned commodities to develop and implement effective strategies.
- Negotiation: Lead negotiations with suppliers.
- Policy Development: Participate in the development and management of departmental policies and goals.
- Continuous Improvement Implementation: Work with the CES team to implement and support continuous improvement changes.
- Team Collaboration: Build solid working relationships with team members at all levels of the company.
2. Commodity Manager Overview
- Business Partnerships: Develop and improve business partnerships with current and new suppliers, emphasizing sourcing stability and driving total cost savings.
- Cost Monitoring: Monitor material cost savings, reductions in working capital costs, risk mitigation, as well as sustainability.
- Procurement Strategies: Develop and implement short and long-term Procurement Strategies for assigned categories.
- Negotiation: Prepare and execute negotiations.
- Accuracy Assurance: Work to ensure the accuracy of business information (purchase price variance, payment terms, sourcing master data, etc.) related to the purchasing function.
- Efficiency Improvement: Continually work to drive efficiencies and ensure that established procedures are followed.
- Procedure Development: Serve as the lead in developing new procedures for the North America Procurement Team.
- Resource Support: Serve as a resource to other departments when new sourcing is needed.
- SAP Expertise: Serve as subject matter expert on SAP purchasing, providing support to Plant Purchasing teams.
- Supplier Performance: Evaluate supplier performance to drive improvements with suppliers.
- Database Updates: Update SAP, order files, and other Purchasing databases.
- Industry Knowledge: Gain knowledge of supply industries and seek opportunities that support the business strategy.
- Audit Support: Provide any needed support for audits (Purchasing, Quality, etc.).
- Global Sourcing: Support and participate in global sourcing activities.
3. Commodity Manager Functions
- Portfolio Management: Manage over $50M spend portfolio for all wire assemblies, achieving continuous goals for cost, quality, and delivery requirements.
- Supply Chain Insight: Thoroughly understand the manufacturing of wire assembly supply chain and ongoing challenges.
- Supply Constraints: Provide insight on options to minimize supply constraints throughout the supply chain (raw material, wire extrusion, wire and cable manufacturing).
- Product Lifecycle: Manage the wire assembly product group throughout the product lifecycle (NPI through End-of-Service-Life).
- Inventory Management: Manage inventory levels to meet product velocity and order fill rate requirements.
- Strategy Development: Drive closure of gaps within the commodity and NPI strategies.
- Supplier Qualification: Ensure reliable and qualified suppliers are available for development or production.
- Engineering Collaboration: Work upstream with NPI design and manufacturing engineering.
- Feedback Provision: Provide quick feedback on SKU trade-offs, contract manufacturer selection, manufacturability, cost, and lead times.
- BOM Management: Work closely with engineering groups on complex and changing BOMs.
- Cost Tracking: Maintain purchasing format for tracking cost savings and increases.
- Quotation Analysis: Analyze and compare supplier quotations to select the best fit.
- Team Participation: Participate in VE/VA, RIE, and APQP teams.
- Regulatory Support: Execute purchase orders and support legal and regulatory requirements.
4. Commodity Manager Job Summary
- Sourcing Plan: Be responsible for assigned commodity sourcing plan for electro-mechanical commodities and drive supplier excellence on quality, cost, agility, and time-to-market.
- Strategic Partnerships: Understand Juniper’s industry needs and drive strategic partnerships for aligned investments.
- Technology Alignment: Align suppliers and Juniper technology roadmaps by understanding market trends, future requirements, and suppliers’ technology value propositions.
- Commodity Strategy: Play a critical role in aligning with Juniper Commodity strategy to identify technology and business issues.
- Global Strategy Support: Collaborate with Juniper Commodity experts to support the creation and execution of global sourcing strategies.
- Supplier Selection: Define supplier selection criteria, select the supply base, and manage a targeted preferred supplier list and AVL.
- Contract Negotiation: Actively engage in negotiating and executing NDAs, Master Purchase Agreements, SoWs, and/or Joint Development Agreements.
- Supplier Performance: Scorecard suppliers and lead business reviews with Juniper and supplier executives.
- Cost Reduction: Participate in executive negotiations to achieve cost reductions, identify sourcing opportunities, and negotiate world-class pricing and terms.
- Productivity Gains: Drive productivity gains and value engineering activities with suppliers and cross-functional teams.
- Market Dynamics: Understand current market pricing and competitive landscape dynamics.
- Innovation Support: Support the development of innovative products/solutions with suppliers to meet Juniper Project needs.
5. Commodity Manager Details
- Supply Chain Strategy: Develop and lead the execution of a global supply chain strategy that supports objectives for Supplier OTD, Inventory Reduction, Supplier Quality, Supplier Lead Times, and Material Cost Reduction.
- Supplier Management: Actions to rationalize the supply base, improve supplier relationships, implement Supplier Agreements, drive increased sourcing from low-cost countries, and leverage materials spending appropriately.
- Performance Reporting: Prepare, distribute, and follow up on supplier performance reports, and promote the Barksdale Supplier Certification program.
- New Product Implementation: Participate as a key member of the New Product Implementation and Value Engineering teams.
- Pricing and Sourcing: Contribute to team meetings, obtain and review pricing quotes from approved sources, ensure the best suppliers are used, and consolidate the supplier base.
- Inventory Management: Drive increasing inventory turns by developing, implementing, and managing innovative material replenishment processes, including Kanban, vendor-managed inventory, and supplier consignment.
- Budget Planning: Participate in the annual profit planning process as it relates to supplier spending budgets.
- Cost-Saving Programs: Develop programs to support annual cost-saving objectives.
- Market Awareness: Maintain awareness of world markets and emerging material-related issues in the industry and position the supply chain to flexibly respond accordingly.
- Strategic Sourcing: Lead/Facilitate strategic sourcing teams to leverage supplier capabilities in product design, cost reduction, lead time reduction, and customer satisfaction.
- Continuous Improvement: Consistent with Crane’s Operational Excellence focus, participate in Kaizen events that will eliminate waste and result in significant benefits (Safety, Quality, Delivery, Cost) throughout the Supply Chain.
- Performance Improvement: Drive continuous improvement in the supply base by communicating objective performance metrics, focused on lead time reduction, on-time delivery improvement, quality improvement, and cost reduction.