22. “What Is TEU?”
Scenario: TEU stands for Twenty-foot Equivalent Units. It is a method of calculating vessel load or capacity, in units of containers that are twenty feet long. An important sourcing question that can be asked during interviews.
How to Answer: Remember to answer briefly but concisely.
23. “What is Cross-Docking?”
Scenario: Cross-docking is the process of unloading materials from an incoming semi-truck and loading them directly into out-bounds trucks or trailers. This is an important sourcing question that is sometimes asked during interviews.
How to Answer: Remember to answer briefly but concisely.
24. “What is Deadweight Tonnage?”
Scenario: Deadweight tonnage is the difference between the laden and unladen weight of the ship. In other words, it is the weight of everything that ship carries except the ship itself.
How to Answer: Remember to answer briefly but concisely.
25. “What Is LTL?”
Scenario: LTL (Less than Truckload) shipment is a contract between the shipper and the transport owner. According to the contract, instead of the entire truck, the shipment is priced according to the weight of the freight and mileage within designated lanes.
How to Answer: Remember to answer briefly but concisely.
26. “What Is ASN?”
Scenario: ASN means Advanced Shipping Notice. It is a notice that is sent to the customer about the detailed shipment information in advance of delivery.
How to Answer: Remember to answer briefly but concisely.
27. “What Are Documents Against Acceptance?”
Scenario: Documents against acceptance are an arrangement or provision, where the exporter instructs a bank to hand over shipping and title documents to the importer only if the importer agrees on the accompanying bill of materials exchange or draft by signing it. This question is commonly asked to measure your knowledge of important sourcing terms.
How to Answer: Give your best explanation in the briefest form possible.
28. “What Is The Difference Between Procurement And Sourcing?”
Scenario: For this question, the hiring manager wants to learn if you know what these two terms mean. Both procurement and sourcing are terms that may sound alike, but they are also different from one another. We even have a dedicated article for that here.
Being able to answer this question means you know exactly what position you are trying to apply to and will give the hiring manager confidence in picking you for the position.
How to Answer: Give a simple but concise answer. Procurement is the process of purchasing supplies for the company’s growth and/or operations. Sourcing is the procurement process of looking for the best suppliers to get the supplies or services from.
29: “Tell Me About a Time When You Successfully Negotiated a Favorable Contract.”
Scenario: The hiring manager wants to assess your negotiation skills and your ability to secure beneficial contracts for the organization. It showcases your communication abilities, strategic thinking, and value-creation mindset.
How to Answer: Describe a specific situation where you negotiated a favorable contract, highlighting the desired outcomes and the steps you took to achieve them.
Discuss your approach to understanding the other party’s needs, preparing for negotiations, leveraging strengths, and reaching mutually beneficial agreements. Emphasize the value or cost savings you were able to secure for the organization.
30: “How Do You Manage Procurement Risks, Such As Supply Chain Disruptions Or Supplier Bankruptcies?”
Scenario: The hiring manager wants to know how you manage procurement risks, such as supply chain disruptions or supplier bankruptcies.
How to Answer: Give a detailed answer that highlights your experience with managing procurement risks. You can mention some of the key risks that procurement faces, such as supply chain disruptions, supplier bankruptcies, quality issues, and delivery delays.
You can also mention some of the risk management strategies that you use, such as risk assessment, risk mitigation, risk transfer, and risk avoidance.It is important to emphasize your ability to anticipate and mitigate risks before they occur, as well as your ability to respond quickly and effectively to any procurement crisis.
You can also mention any specific tools or software that you have used to manage procurement risks, such as risk management software or supply chain mapping tools.
31: “What Is A ZOPA?”
Scenario: ZOPA is the acronym for Zone of Possible Agreement. It is an area where two negotiating parties can agree. The ZOPA is that one slim chance for two parties who are dead set against each other to come to a common ground and accept a compromise for everyone’s sake.
However, you also need to realize that every result may differ. Every negotiation consists of two parties that are both trying to gain the upper hand against the other. A ZOPA will appear if both parties have deal objectives that are still within the ZOPA.
Any more than that and you have a negative bargaining zone. Simply put, there is no bargaining for you or the other party. When dealing, the ZOPA principle can be represented as shown.
If the highest price the buyer is willing to pay is greater than the lowest price the seller can accept then the agreement is possible. The range in the middle between these two breakpoint prices is referred to as ZOPA (Zone of Possible Agreement).
The problem with ZOPA is that both parties usually have an imprecise breakpoint price and make no formal attempt to assess probabilistic information about the other’s reservation price.
In my time as a procurement manager, I invested as much effort as possible to make sure I got as much information as possible on the seller’s reservation price. The earlier you know this, the easier you will achieve your desired result. Opening extreme can help in determining your opponent’s breakpoint.
How to answer: Explain what you know about the topic. Keep your answer short.
32: “What Are The Main Principles Of Persuasion That Guide Decision-Making In Negotiations?”
Scenario: For decades, researchers in a wide range of academic disciplines have studied the factors that drive us to agree to the requests of others. Common sense suggests that when someone must make an important decision, they carefully consider all available information to create an informed decision.
However, research conducted by social psychologist Robert Cialdini indicates that our decision-making is not guided by logical examination of the facts, but by certain universal shortcuts.
Understanding these shortcuts and properly implementing them in your negotiations increases your chances of successfully persuading a negotiating partner, and having them agree to your request.
This leads to a better outcome for your negotiation result. Cialdini found six main principles of persuasion that guide decision-making. These principles of persuasion are extremely powerful and should be used frequently throughout your upcoming negotiations.
The first is liking. The principle of liking states that people prefer to accept the requests of others they like. The science of persuasion indicates that we like people for one of three reasons: they are similar to us, they pay us compliments, or they cooperate with us in the pursuit of common goals.
But how does this translate to negotiation? Research shows that likability is one of the most important factors in reaching a beneficial outcome during negotiations, so take time to discover areas of similarity with your negotiating partner before you start proposing any terms.
In my time as a procurement manager, I am sure I closed better deals with people with whom I had a good relationship. The opposite is also true.
The second is scarcity. People tend to want more from resources when they are limited. Effective negotiation requires you to not only inform the other party of the benefits they enjoy if they select your product but also demonstrate the value of the product and its limited availability.
You must explain why your proposal is unique and convince the other party of what they may lose by neglecting this proposal.
The third is authority. In any type of negotiation, people will follow knowledgeable, credible experts they can trust for honest information. It is vital to signal your authority to the other party before you attempt to influence their decision.
Convincing potential clients cannot be done simply by telling them how beneficial your proposal is, but must involve support from outside sources that the other party finds reliable. When meeting new clients, ask someone to make the initial introduction who can be trusted to offer persuasive information about you.
The fourth is consensus. When people are uncertain about how to behave, they analyze others to make decisions. While negotiating, you should not rely solely on your ability to influence others directly but also call attention to what other people are doing in the same situation, especially when these people are similar to them.
The fifth is reciprocity. When someone receives a gift or service from another person, they feel obligated and motivated to give something back of equal or greater value. Similar to other social contexts, negotiations benefit from reciprocity because a negotiating partner is more likely to say yes to terms put forth by the other person when they feel indebted to them in some way.
Utilize the principle of reciprocity by being the party that gives the initial gift and making sure this gift is unexpected, personalized, and valuable.
The sixth is consistency. Even if their previous decisions resulted in a less-than-desirable outcome, people tend to act consistently with past statements they shared and actions they performed.
Research from several studies supports the conclusion that when a person agrees to a small commitment, this leads to a higher likelihood of agreement when approached with a larger commitment consistent with the initial one. Take advantage of this information in your negotiations by requesting a small initial commitment.
One important variable that the team of Procurement Tactics would like to point out, is that it is very important to manage yourself. The key to any successful negotiation is emotional intelligence, or the ability to recognize and manage your own emotions, as well as the emotions of the people around you.
Popularized by psychologist Daniel Goleman, emotional intelligence includes four key elements: self-awareness, self-management, social awareness, and relationship management. To become an emotionally intelligent negotiator, you must spend time honing all of these valuable skills.
Self-awareness is the ability to understand someone’s emotions, identify how they affect others, and determine their role in making decisions. Self-awareness provides the framework for self-management, or the capacity to control one’s emotions and adapt behavior to changing circ*mstances.
How to answer: Point out the six main principles of persuasion and give examples of how you used this technique to your advantage in your negotiations.
33: “Did You Experience A Deadlock Situation In A Deal Once? How Did You Move Forward?”
Scenario: There are many advantages to trying to shift a deadlock deal situation to a win/win.
You will always come into negotiation situations where the other person either doesn’t wish to reach a “win-win” or doesn’t realize it is in his or her best interest to achieve a deal. In these situations, it is necessary for you to open lines of communication and try to increase trust and cooperativeness.
Sometimes conflicts escalate, the negotiation atmosphere becomes charged with anger & frustration, and all energy floats toward criticizing and blaming the other. In this type of situation, many negotiators forget about their initial goals. Don’t let this be you! It is not easy to shift this situation to a deal, but the following techniques might help you.
The first is to reduce tension through humor, let the other “vent,” acknowledge the other’s views, listen actively, make a small concession as a signal of good faith. The second is to change your communication style: rephrase the other’s comments to make sure you hear them; mirror the other’s views, listen better.
Search for ways to slice the large issue into smaller pieces and depersonalize the conflict– separate the issues from the people. You could also focus less on your position and more on a clear understanding of the other’s needs and figure out ways to move toward them. Last but not least is to make a “yes-able” proposal; refine their demand; reformulate; repackage; sweeten the offer; emphasize the positives.
Since we’ve finished discussing how to turn around a non-negotiable variable into a negotiable one, it’s time to think about what you can do if you’re really dealing with a non-negotiable variable or deal and no movement from the other party is expected.
Despite your efforts, there will always be deals that you can’t turn around. The other party decided to not negotiate anymore. In this case, the only way you can do is to leave the negotiation table. There is no shame in admitting defeat. Take some time to reflect on what you could have done that may potentially have turned things around.
How to answer: point out that you are aware of possible techniques to turn impossible deals into possible and add some personal experiences of how you did this yourself in the past.
34. “How Do You Evaluate and Select Suppliers?”
Scenario: This question evaluates your approach to supplier evaluation and selection. It highlights your ability to assess supplier capabilities, reliability, and fit with the organization’s needs.
How to Answer: Describe your supplier evaluation process, including criteria you consider, such as quality, price, delivery capabilities, financial stability, and ethical practices. Discuss how you gather supplier information, conduct site visits or audits, and assess supplier performance through metrics and scorecards.
35. “What Is Your Own Negotiation Style? And How Do You Counter Others?”
Scenario: The negotiation style of your opponent should have a big impact on your strategy. Negotiation situations can often be tense. In these circ*mstances, most people have a tendency to fall back to their habits of dealing with conflict and negotiation. If you’re in a negotiation, it’s important to be able to identify the negotiation style of your opponent.
But maybe even more important, you should be aware of your own negotiation style.
People are constantly negotiating and smoothing out conflicts throughout their professional and personal life. With the current trend of organizations becoming less hierarchical, personal conflicts will occur more frequently. Being able to navigate through these situations will have a positive impact on your career and on your negotiation outcome.
Studies have shown that negotiation has a direct impact on your ability to make a good deal. But hey, you already knew that! In order to categorize the negotiation style of your opponent quickly, we’ll use an effective framework to help you understand anyone’s negotiation style.
How to identify your own negotiation style? Let’s start with an example and identify your own negotiation style. Think of a situation where you had to negotiate. Now answer these 2 questions:
1: Is it important to satisfy your own needs?
2: Is it important to satisfy the needs of your opponent?
How to answer: make sure you are aware of the 5 main negotiation styles and convince the interviewer that you are able to switch styles in different situations. This means you are an excellent negotiator.
36. “What Do You Know About Batna And How Will You Use It To Your Advantage?”
Scenario: It’s an abbreviation for “Best Alternative to a Negotiated Agreement”. It’s your backup plan if your negotiation doesn’t lead to a deal. By determining a BATNA you’ll have more confidence because you have a backup plan if the negotiation doesn’t work out. Because of this, you won’t feel forced to make a bad deal.
Going into any negotiation, it’s important to have a clear understanding of your BATNA. If you’re negotiating with a supplier, be sure about the pricing of alternative suppliers. One of the greatest dangers in a negotiation is being too committed to coming to an agreement. Your negotiation partner will immediately sense this and will get the upper hand in the negotiation.
Before you begin a negotiation, know your options. Are you able to walk away? What are the pros and cons of each alternative? However, don’t stop here.
How to answer: Give your best explanation in the briefest form possible and make sure to tell how to use BATNA to your advantage
37. “What Is Your Experience With Managing Procurement Budgets?”
Scenario: The hiring manager wants to know if you have experience with managing procurement budgets.
How to Answer: Give a detailed answer that highlights your experience with managing procurement budgets. You can mention some of the key tasks involved in managing procurement budgets, such as forecasting, tracking expenses, and identifying cost-saving opportunities.
You can also mention some of the procurement metrics that you use to measure the effectiveness of your budget management, such as savings, cost avoidance, and return on investment.
It is important to emphasize your ability to work within budget constraints while still achieving the organization’s procurement goals. You can also mention any specific tools or software that you have used to manage procurement budgets, such as Excel, SAP, or Oracle.
38. “How Do You Ensure Compliance With Regulatory And Legal Requirements In Procurement?”
Scenario: This question evaluates your understanding of procurement regulations and your ability to ensure compliance within the procurement process. It demonstrates your attention to detail and commitment to ethical practices.
How to Answer: Explain how you stay updated on procurement regulations and legal requirements relevant to your industry. Discuss your approach to incorporating compliance checks and documentation within the procurement process.
Highlight any experience you have had in addressing compliance issues or implementing measures to prevent non-compliance.
39. “Describe a Challenging Vendor Relationship You Managed Successfully.”
Scenario: This question assesses your ability to manage difficult vendor relationships and find effective resolutions. It demonstrates your conflict management skills, negotiation abilities, and resilience in dealing with challenging situations.
How to Answer: Share a specific example of a challenging vendor relationship you successfully managed. Discuss the nature of the challenge, the steps you took to address it, and the outcomes you achieved. Highlight your ability to communicate effectively, find common ground, and establish mutually beneficial partnerships with vendors.
40. “How Can You Ensure That Procurement Activities Are Aligned With The Organization’s Sustainability Goals and Objectives?”
Scenario: The hiring manager wants to know how you ensure that procurement activities are aligned with the organization’s sustainability goals and objectives.
How to Answer: Give a detailed answer that highlights your experience with implementing sustainable procurement practices. You can mention some of the key sustainability issues that procurement faces, such as environmental impact, social responsibility, and ethical sourcing.
Then, describe the specific sustainability goals and objectives of the organization and how you ensure that procurement activities are aligned with them. This may include implementing supplier diversity programs, using eco-friendly products, or ensuring fair labor practices.
It is important to emphasize your ability to balance sustainability goals with cost savings and value creation, as well as your ability to communicate the benefits of sustainable procurement to stakeholders.
You can also mention any specific tools or software that you have used to manage sustainable procurement, such as sustainability scorecards or carbon footprint calculators.
Procurement Interview Questions – Are They All the Same?
The rule of thumb when it comes to expecting procurement analyst questions is that most companies will never use the same questions twice or thrice.
The hiring manager will always look to cycle these questions from time to time, depending on the level of experience of the applicant that they’re talking to. Most applicants who are new in the procurement scene, expect basic procurement specialist questions. But for the professional procurement managers, the questions are going to be more on the advanced or expert level side.
Again, always expect that companies will be employing difficult but fair questions to assess if you can do the job.
A helpful tip would be to get yourself familiarized with the STAR method. If you’re not familiar with the STAR method, it’s the acronym that stands for the following:
Situation: Setting the scene and then give the details of your example
Task: Describing what you need to do during that situation
Action: This means your explanation on what were the steps you took to address the problem.
Result: Share what the outcome was for the actions you achieved
The STAR method is often employed by hiring managers and interviewers to gauge how the applicant can answer critical situations to the best of their abilities. The ticket to answering these questions effectively would be to know the scope of the position that you’re applying for and to give each answer as simple and concise as you can.
Procurement Expert’s Advice on Procurement Interview Questions
For this article, we asked a seasoned procurement professional to share his insights regarding interview questions in procurement.
Sjoerd Goedhart
Owner, Goedhart Interim Management & Consultancy
LinkedIn Profile: https://www.linkedin.com/in/sjoerdgoedhart/
1. Can you share a personal example of the interview questions in procurement? What can readers learn from this?
“Prepare yourself not only for purchasing questions but also for questions that an interviewer asks to get a good idea of you as a person. As an interviewer with many applicants, in my opinion, this is the most important part of the first interview with an applicant. The knowledge and skills are often evident from the CV, if you continue to a 2nd and 3rd round, you will delve deeper into the content.”
Follow-up Question: If the person successfully moves to the second round, what does he/she need to prepare?
“In the second round, it’s crucial to prepare examples from your past experiences – whether from practice or real-life jobs – where you can demonstrate your actions in specific situations. This stage focuses on practical examples, showcasing your skills and capabilities in procurement.”
2. What should readers know about procurement interview questions?
“The same applies to procurement interviews as to procurement conversations. Preparation is 80% of the result. Make sure you know everything about the company, the products/services they offer, and the challenges they face. Make sure you also know everything about the person sitting opposite you. Check your network if you have common connections to tell you more about the interviewers.”
Follow-up Question: If preparation is 80% of the results, what is the remaining 20% to have a successful interview?
“I believe that while showcasing skills and knowledge is important, confidence plays a significant role in performance. Preparation contributes to about 80% of success, but the remaining 20% lies in how you present yourself and perform as an individual. Whether it’s applying for a job or negotiating, being well-prepared boosts confidence, which ultimately contributes to success. Additionally, using the STAR method – Situation, Task, Action, Result – before answering any question helps to structure responses effectively. It ensures clarity and highlights your ability to tackle challenges and achieve results. Moving forward to the next question, feel free to choose the ones you find valuable, as this interview aims to align with your goals and interests.”
3. What should people know about procurement interviews, from the applicant side?
“In most companies, it’s for the interviewer as much as important that the applicant has a fit with the company and/or his/her new team members. So skills and experience are important, but company fit is even more important. So be yourself, be authentic, and don’t play a role. Be transparent as you think that there is no personal match with the company. This will avoid having to conclude that there is a mismatch.”
4. What should people know about procurement interviews, from the company side?
“As mentioned in question 1, it’s even important to know more about the person/herself and to see if there is a possible fit with the team and company, so be not only about your professional experience and possible questions but also about your personality and contribution to the team.”
Follow-up Question: How can applicants navigate situations when there might be a mismatch in skillset or in company values?
“When facing a situation where there’s a mismatch in skill set or company values, it’s important to acknowledge that such mismatches may surface at some point, either during the job or in the hiring process. While it’s impossible to completely avoid mismatches, it’s crucial to address them openly and transparently. In response to the third question, it’s worth noting that finding a candidate who perfectly fits 100% of the required skills is rare. Sometimes, a candidate may lack certain skills but possess other relevant competencies. The purpose of the interview is to gauge not only technical skills but also cultural fit and other soft skills. Hence, while a candidate may excel in skills, a cultural mismatch could still occur. Moving forward, it’s beneficial for both parties to be prepared to discuss examples using the STAR method, ensuring clarity and alignment in communication.”
5. Can you provide insights into how candidates can best demonstrate their understanding of procurement principles during an interview?
“Show confidence and prepare some examples (3-4) from your former jobs that you can use during the interview. These examples should be prepared very well so you can share them with confidence. Make them concrete, use the STAR method, and make it personal to add what you’ve learned. You can also share a big mistake, but show what your professional and personal learnings are.”
6. Can you give tips on how newcomers in the field of procurement should answer interview questions?
“Be prepared, but don’t be too shy to say that you don’t know the answer to a question. That’s why you apply to the field of procurement to learn. For an interviewer, it’s important to see if someone has the capabilities to learn, and has intrinsic motivation and to hear what the broader plan/ambition of the candidate is and how a procurement role fits in this ambition.”
Follow-up Question: How can procurement professionals showcase some of their skills even if they’re not directly related to procurement?
“This question is indeed valuable for professionals across various industries, not just procurement. It’s important to consider how individuals can showcase their skills, even if they’re not directly related to procurement. One approach could involve incorporating role-playing scenarios into the interview process. Candidates could be asked to prepare a business case or participate in a negotiation simulation, allowing them to demonstrate their performance and preparation skills. Additionally, for those lacking direct procurement experience, highlighting transferable skills and relevant experiences from other industries can be beneficial. Overall, the key is to provide opportunities for candidates to showcase their abilities in practical scenarios, regardless of their specific industry background.”
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Conclusion
In conclusion, mastering the art of answering procurement interview questions requires a comprehensive understanding of the industry’s dynamics, coupled with effective communication and problem-solving skills.
Aspiring candidates should familiarize themselves with both fundamental and advanced topics, employing the STAR method to articulate their experiences clearly. The varied nature of procurement roles demands adaptability, as demonstrated by addressing challenges, negotiating favorable contracts, and ensuring compliance with regulations.
Furthermore, integrating sustainability into procurement practices showcases a commitment to broader organizational objectives.
By preparing thoughtfully for each question and showcasing a balance between technical expertise and interpersonal skills, candidates can navigate procurement interviews successfully and position themselves as valuable assets to prospective employers.
