What’s Category Management?
Many organizations believe they’re employing category management while in fact they’ve already place in a company design which means buyers are broadly accountable for spend and suppliers inside a category but they are still actually ‘buying’ – that’s managing a procurement brought process where they’re essentially carrying out a traditional sourcing approach (RFx. eAuction) after possibly some elementary spend and offer market investigations.
Category Management is a lot more than this. First of all it’s not a procurement brought process, it’s a business process. It is almost always facilitated by Procurement – almost as much ast HR facilitate the processes around annual salary & development reviews but crucially the company views it their process and it is broadly regarded as the just one way of working over the enterprise with regards to buying products or services.
One other popular misconception is the fact that Category Management in some way refers back to the sourcing side of Procurement activity alone. Again, this really is seriously undervaluing what Category Management really is. Category Management is, actually, a proper finish to finish process for achieving value from purchasing products or services with respect to the company. The procedure seeks to align business goals and customer needs using the capacity from the supply sell to reduce cost, reduce risk, improve service and improve revenue.
Organisations contributing in procurement capacity possess a Category Management procedure that has, actually, 3 critical elements. They are Category Planning – the annual planning of both sourcing and supplier management activities, Proper Sourcing – the creation and implementation of category strategies and Supplier Management the control over supplier performance and cost improvement.
One factor that maybe true about Category Management is the fact that real Category Management is really a highly complex tactic to execute robustly and needs a professional skillset in hard skills of procurement but additionally a higher EQ around behavioural skills. Category Management is really a true mix functional approach where team dealing with business stakeholders is needed to understand it’s you are attempting to achieve and explore the different cost motorists, data sets, possibilities together to construct a method that’s truly representative and appropriate towards the business context. Learn how to use individuals to facilitate & influence the procedure perfectly into a common goal isn’t any mean task.
To some degree hard skillset (the Procurement tools) could be codified making explicit and frequently follow key steps to create they, Analyse data sets, Create strategy, Create & manage the implementation plan and lastly, review progress whether from the sourcing or supplier management perspective. Category Planning will appear slightly different however the most thorough planning processes consume a step process – reviewing the advantages from last years’ plans, Engaging the company for his or her targets and issues and lastly allowing the new plan for the following year according to prioritising all of the possibilities over the whole category. Leaders within this space equip facilitators from the Category Management process with detailed “how you can” guides & templates ideally through some type of online collaboration tool to make sure all groups are run with consistency which will help they are driving efficiency of operations. Probably the most competent practitioners understand how to modulate their method of suit their conditions – although organisations that ensure to follow a rigid gate review process can challenge in due time that any ‘skipping of steps’ is performed for seem commercial rationale and not simply since it is difficult or otherwise enjoyable to complete.
The softer skills needed to complete great Category Management – that is essentially a task based activity – tend to be harder to codify although there are lots of great maps and tools which help stakeholder engagement & influencing and the development of communication planning. Most likely of finest importance within this, may be the knowledge of self first as a person to make sure you play for your own strengths. As, put simple, recognition of your preferences can help you find out the preferences of others and adapt your look to match.
What’s obvious is the fact that leading this type of complex process is tough enough to handle a lot of people perfectly into a common goal just around the behavioural aspects alone – so individuals organisations that don’t detail the ‘hard skills’ inside a consistent, structured and simple to follow manner are merely adding additional complexity that may be prevented.