29 April 2014 | Mark Webb
Category management is the core process and way of working used by most procurement teams in both private and public sectors. It has an incredible potential to deliver value way beyond traditional sourcing approaches.
In recent years there have been a number of people promoting the view that category management is past its sell-by date and has been superseded.
However, the reality is that most organisations we encounter (including some of the world’s biggest procurement functions with 300 plus team members) openly admit they have never fully implemented category management. Teams are more focused on traditional sourcing activities such as RFPs, negotiation and contracting than the key features of category management such as:
• Active and visible business sponsorship and support for the process
• Cross-functional team working
• Consistent yet flexible application of standard tools
• Early engagement with business stakeholders before decisions are made
• Creation of one- to three-year documented category strategies
• External supply market engagement to help create the strategies
• Addressing all potential sources of value creation, not just volume consolidation and competitive tension
Our 2012-13 survey identified that only 27 per cent of organisations considered themselves to be category management leaders. However they generated 46 per cent more value than the followers (73 per cent of organisations).
We are re-running the survey to see how much progress has been made and to identify the specific practices used by the best performing global leaders in category management. This time we have made the survey even quicker to complete (15 minutes) and more focused and insightful for practitioners with the objective of helping them to drive category management improvement.
Whether you consider your organisation to be a leader or follower I would really value your contribution to this year’s survey - click on the link here to participate. We are determined to make the 2014 report even more insightful and will release the findings to participants in June – in advance of general publication. In the shorter term participants can choose to receive a free report on category management as a strategic process when they complete the survey. Following the release of the findings there will be an opportunity for a personal/leadership team briefing on the findings and potentially an organisational benchmark. If you can find the time to participate, I’d really appreciate it.
☛ Mark Webb is managing director at Future Purchasing. To participate in the 2014 Category Management Survey, please click here.