Benefits of Category Management Category management is one of the most important parts of the procurement in the company. It is also nothing new. Actually retailers uses it since many years. It brings a lot of benefits for the enterprise. This article shortly describes all the benefits for the company from a proper category management. According to businessman, benefits coming from category management can be put into five, simple categories that is: savings, P2P, technology, vendor risk management and consolidation of spend. How it can be understand? a) Consolidation of Spend – Thanks to the proper strategic category sourcing it is much easier to find various consolidation opportunities. Thus, the control of spending is not as hard as before and they are easily visible. b) Vendor Risk Management – Category management provides people responsible for the enterprise with better understanding of all commercial and operational risk connected with various campaigns, products etc. c) Technology – A good category specification, make it easier to find a solution to business cases connected with e-procurement. d) P2P – From all of the benefits connected with the category sourcing, this one is probably the most important. In modern world people know what P2P (Purchase to Pay) is. However, it is not a typical knowledge, that P2P is reliant to the category sourcing All the processes connected with P2P are connected with the category. e) Savings – According to the information provided by various business researchers. Proper strategic sourcing and category management can rise savings in the target company. These are not all benefits connected with the category management program. However, they might be considered as the most important ones. Another advantages which might be worth of consideration are: reduce of a supply chain risk, reduce of the purchase price of the products, reduce of total cost of the ownership, mitigating price increases in a rising market, a better view into spend data et cetera. At the end of the article it might be important to notice one point. According to researchers conducted by Procurement Strategy Council, procurement organizations use usually basic techniques in their work. Category management on the other hand is used by mature procurement organizations which in comparison to the first ones, use more complicated techniques in their work. All in all category management have a lot of benefits. That speaks for itself. If you want to have a company, then category management is worth of the consideration.
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