When businesses seek to procure finished goods, raw materials or supplies, they often depend on commodity managers to make it happen. Whether a firm is involved in creating, producing or selling goods and services, commodity management is an important link in the supply chain.
With this career guide, you can learn more about the commodity manager position, which may also be known as purchasing manager, including job duties, required education and training, potential job opportunities and earnings.
What is Commodity Management?
All types of companies need key supplies, or commodities, to run their operations. For a clothing manufacturer, the commodities required to operate efficiently might include cotton, buttons, zippers and thread. Commodity management is the approach to maintaining sufficient levels of these items throughout the usage cycle. Commodity managers help companies reach their goals by procuring supplies and ensuring their continuous flow through the supply chain.
Why Commodity Management Matters
Commodity management is important to running a profitable, stable business. It minimizes risk by ensuring a solid supply chain, and has the potential to maximize earnings through favorable prices and terms on purchases. Commodity managers use their in-depth knowledge of markets, suppliers and company requirements to maintain availability of cost-effective supplies of needed materials. They are usually responsible for establishing secure and dependable relationships with suppliers. They also arrange logistics and facilitate balanced inventory levels to meet requirements without wasting valuable warehouse space or resources.
Commodity managers monitor market conditions and make purchases when prices are favorable. They study trends to identify and solve potential supply chain problems, and they continually seek new opportunities for innovation. Other typical duties for this position include preparing contracts and purchase orders, resolving vendor disputes, and writing reports for management and other stakeholders.
Where Can I Find Jobs in Commodity Management?
A wide range of industries depend on skilled commodity managers to optimize performance and profits. Some possible areas of opportunity include global retailers, manufacturing and distribution companies, information technology firms, medical device manufacturers, and aerospace and defense firms.
Education Preparation for Commodity Manager Jobs
The qualifications for a commodity manager job will vary according to the type and size of a company, but a college degree and work experience are common requirements.
- Associate’s Degree: Some entry-level jobs in the commodities field may be obtained with a two-year associate’s degree and related work experience. Continuing education is typically required for advancing to management positions.
- Bachelor’s Degree: Many employers hiring commodity managers will require at least a four-year bachelor’s degree in an industry-related discipline such as engineering, information technology, business or mathematics. Senior- and executive-level positions typically require an advanced degree and additional work experience.
- Master’s Degree: Certain commodity manager positions may require advanced degrees, such as a Master of Science in Supply Chain Management or a Master of Business Administration (MBA). These graduate degrees typically take an additional one to two years beyond the bachelor’s level, and may expand your career opportunities.
Training, Other Qualifications and Advancement
Additional qualifications for landing a commodity manager job may include training or experience in sourcing or buying. Employers will also look for position-related attributes, including strong presentation, verbal and written communication skills, and creative problem-solving abilities. You may distinguish yourself among job candidates by developing the following in-demand attributes:
- The ability to work independently and take on responsibilities
- Awareness of trends
- Negotiation and conflict-resolution skills
- The ability to multitask in a fast-paced environment
- Decision-making and analytical skills
- Proficiency with required software and technology
Advancing in a commodity manager career typically requires additional work experience, an advanced degree or professional certifications. Some organizations may offer tuition assistance or reimbursement programs to employees seeking to advance their education.
Potential Salary for Commodity Manager Jobs
Salary potential varies depending on factors including location, education and experience, and prospective students are encouraged to conduct independent research to determine actual earning potential.
Earnings are also determined by the specific industry, company and job title. For example, purchasing managers nationwide had an average annual wage of $117,720 as of May 2016, according to the U.S. Bureau of Labor Statistics.
Are You Interested in Pursuing a Career as a Commodity Manager?
Whether you’re interested in working for a global manufacturing company or a regional retailer, the right education and skill set can help you launch a rewarding career as a commodity manager. Start by using this career guide to plan your path and consider earning your Master’s in Supply Chain Management.