The cycle can help you to define a Category Management process. This process is not set in stone and not all stages will always be relevant to all category managers and all organisations but what this does do is provide a starting point and guidance to help devise an efficient Category Management process for procurement. A category manager specialises in the handling of good or services for a specific category e. It is a very specialised procurement role which requires individual to have a background in the category being handled.
As procurement further evolves technology will become a driving force within most areas. Combined with SRM, the use of soft skills and EI, the development of technology, evaluating the market, identifying and managing stakeholders, ensuring ethical conduct, constantly pushing towards sustainable procurement, Category Management is an excellent method to increase productivity, reduce spend and add value to the supply chain function.
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Category Management. What is Category Management? What are the benefits of Category Management? Module purpose On completion of this module, learners will be able to evaluate approaches that can be adopted to develop category management of both direct and indirect organisational expenditure and plan for the associated strategic processes. Module aim s Category management involves applying the end-to-end procurement process to a specific range of goods or services. This involves pre-award processes such as category analysis and demand management, sourcing and contract negotiation, and the post-award processes such as performance management.
It is essential that those involved in managing procurement and supply activity can evaluate approaches to develop category management and are able to create process plans which ensure category management success.
This module is designed for those who have responsibility for category management as it focuses on the differing approaches for category management using the tools and techniques which are available to assist with the creation of the associated processes for direct or indirect expenditure.
A category manager needs a broad range of skills to be successful: Hard analytical skills, such as the ability to analyze large swaths of data to identify trends and gaps in the market, the ability to implement a strategic plan aligned with the goals of the business, as well as soft skills to communicate and negotiate with internal and external stakeholders.
The benefits of implementing a category management program include better outcomes, improved quality, greater savings, efficient use of resources, a better understanding of the market and an increased focus on collaboration and innovation. Category management can also alleviate tedious tasks, such as each business unit sourcing their own pens, by bundling and streamlining providers and contracts. Unlike strategic sourcing, category management takes a proactive instead of a reactive approach to sourcing, which provides more insight into factors that may impact the price of a service or good.
The category manager is positioned to elevate procurement as a trusted and respected business partner due to a deep understanding of spend categories and the ability to tackle waste, duplication, maverick and out-of-control spending.
It also allows for greater ability to prioritize and strategize, which creates leverage to attain lower pricing and quality of services from providers. A category manager acting as a catalyst will confront friction when trying to implement a category management program across the organization. Individual business units can be skeptical that the priority will be on cost control over quality, they can be resistant to change in general or they are worried about the impacts the changes may have on their current suppliers by rocking the boat.
To change the tide from skeptics to adopters, the organization must use methods that address concerns from business units and stakeholders. The category manager can alleviate concerns through open communication, creating a clearly defined value proposition and connecting with and listening to stakeholders across the organization. Adopting a category management approach to sourcing will have improved contract outcomes as the process is managed end-to-end.
Analytical tools that provide greater clarity and visibility into spend categories will need to be acquired, as will the talent to utilize the analytics tools.
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