A Guide to Category Management

PROCUREMENT FREELANCERS

A GUIDE TO CATEGORY MANAGEMENT

Discussion Outline Topics to be Covered Introduction Role of a Category Manager Category Management Process Objectives Contact Us

Category Management

An Introduction Category management has become very popular in most supply chains in the recent past.

- A STRATEGIC APPROACH TO PROCUREMENT

What is category management ?

In category management, the organization bundles (segments) spending on similar goods and services into one and applies procurement methodologies to ensure that the firm maximizes savings.

If an organization does not have a strategic approach to its procurement, spending can get out of control and result in losses.

A few categories on which organizations typically spend Office management Human resources Professional services Security IT Transport Travel and entertainment Medical Industrial products/services

Role of a Category Manager Category managers are assigned to handle specific categories of goods & services. They are also responsible for handling supply chain relationships for their own category. It is important that the category manager should have a background in the category they are handling for an efficient decision making.

Category Management Process

Opportunity development

Opportunity identification

Shape and negotiate proposals

Screen suppliers

Finalize startegy

Conduct auctions and RFPs

Implement and manage suppliers

OBJECTIVES OF CATEGORY MANAGEMENT

IMPROVED SUPPLY CHAIN EFFICIENCY The concept enables the category managers to gain better visibility into the category spend and identify any potential savings opportunities.

IMPROVED VENDOR RELATIONSHIPS Category management aims at improving supplier relationships through a number of ways; for instance, it aims at improving information sharing.

DEMAND MANAGEMENT

CONSOLIDATED SPENDS

Category management significantly simplifies demand management since each category manager will be dealing with his portfolio separately rather than treating the entire organization’s demand as a block item.

Managing by category aims at enabling category managers to easily identify consolidation opportunities to significantly reduce operational costs.

Centralizing spend data also improves the tracking & reporting of procurement activities.

CUSTOMER SATISFACTION

INCREASED COMPETITION

Category management endeavors to achieve maximum levels of customer satisfaction which ultimately leads to unmatched customer loyalty. Customer satisfaction and loyalty are a result of shorter cycle time for fulfilling customer orders.

Once you undertake category management, you are guaranteed of a larger market share, which is as a result of customer satisfaction, better pricing strategies, and reduced operational costs. This results in improves competitiveness.

THANK YOU

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