Only one in 20 global firms have 'fully optimised' category management – survey

Will Green is news editor of Supply Management
16 July 2015

Just 5 per cent of organisations describe their category management approach as "fully optimised”, according to a survey.

Research carried out by Future Purchasing showed companies could increase savings by between half or more than double, depending on maturity, through measures such as aligning category management with wider business goals.

The survey, of more than 350 organisations across the globe and covering 15 sectors, found category management was a priority for 75 per cent of respondents but just a quarter had “embedded or optimised” the stratety and just 5 per cent described their approach as “fully optimised”.

Future Purchasing said optimised category management could produce a savings rate of around 12 per cent.

The current savings rate of just under 6 per cent for “followers” could more than double (by 111 per cent), while the savings rate for “leaders”, currently around 8 per cent, could increase by 49 per cent, if they “develop and implement creative category strategies that have rigorously explored a wide range of value levers to consistently release value and rebalance power from suppliers”.

Future Purchasing's report recommended: “Extend the coverage of category management so that more than 75 per cent of spend has an excellent strategy and plan.”

The report said followers “identify less than half of available category value” and “struggle to recruit supportive category sponsors”, while leaders make category management “their one way of working” and have “clear roles and responsibilities for category managers and stakeholders”. And where leaders “strive to embed category management skills”, “less than a quarter of followers rate their training as excellent”.

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