Category Management (L5M6)

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.

Next steps
Joining a CIPS qualification programme means you will join the largest Institute in the world for those working in procurement and supply. You can join as a member online today. Once you've become a CIPS member you can book your examinations online.

    Learning outcomes

    1.0  Understand approaches that can be used to develop category management strategies

    1.1  Critically compare strategic and conventional sourcing processes and their role in category management

    • Defining strategic sourcing and category management
    • The stages of a conventional sourcing process
    • Transactional and strategic sourcing activities
    • Differentiating account management and category management

    1.2  Critically compare models for the adoption of category management

    • Models of strategic sourcing such as AT Kearney’s 7 step model
    • Models of category management such as the CIPS Purchasing and Supply Model and CIPS Category Management Model
    • Analysis of similarities and differences between models for strategic procurement, strategic sourcing and category management

    1.3  Identify the technical and behavioural skills required to implement category management

    • Technical skills such as financial management and cost analysis, supply chain analysis, supply base research, sourcing processes, risk management, legal aspects and negotiation
    • Behavioural skills such as communication, influencing, working with teams, cross functional working and change agents

    2.0  Understand the concepts, tools and techniques associated with managing expenditure

    2.1  Contrast the types of expenditure that can be analysed for category management processes

    • Expenditures that are related to direct costs
    • Expenditures that are related to indirect costs
    • Applying Pareto analysis to expenditures and key suppliers

    2.2  Compare and contrast the tools and techniques that can be applied to map categories of direct and indirect expenditure

    • Matrices
    • Supply chain mapping
    • Porter’s 5 forces model
    • Market share/market growth
    • Technology route maps

    3.0  Understand the strategic impact of a category management process

    3.1  Analyse the data required for the development of a category management process

    • Historical and forecasted data on categories of spend
    • Demand patterns for category groups
    • Current contracts with suppliers and terms that are being applied
    • Reviews of existing relationships and performance
    • Market trends

    3.2  Examine the requirements for initiating and preparing the introduction of a category management process

    • Producing category hierarchies for both direct and indirect expenditures
    • Applying portfolio tools to map the categories of expenditures
    • Creating total cost models for category management
    • Conducting stakeholder needs analysis
    • Forming cross functional teams and preparing responsible, accountable, consultative and informing roles within the team
    • Reviewing the implications of existing legislative requirements and standards

    3.3  Analyse supply market factors that impact on the development of a category management process

    • Analysing industry dynamics, competitiveness and pricing behaviour
    • Analysing financial data on potential suppliers
    • Using requests for information (RFIs) to assess market factors
    • Conducting impact assessments of CSR/sustainability factors
    • Conducting supply chain and value chain analysis
    • Analysing supplier perceptions

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    Choose three ELECTIVE module to make up the final 18 required credits.

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