Making Category Management Successful

Dave HenshallCategory ManagementLeave a Comment

Making Category Management Successful

Making Category Management Successful is a priority for successful companies worldwide. They work relentlessly to integrate category management business-wide to achieve and sustain success.

Here we offer six requirements for making category management successful:

Making Category Management Successful

1. Flexibility

Recognizing it is not a ‘one size fits all’ approach is one key to making category management successful. So it must flex by sector, category and business need to be relevant.

Robust processes and frameworks are fundamental to a high performing function. Frameworks empower the procurement team and ensure a smooth consistency of execution, especially when supported by influencing skills.

2. The ‘one way we buy.’

All businesses must buy, add value, and sell to stay in business, and all ‘buy activities’ are a part of Category Management in one form or another. There is not ‘Category Management’ or ‘Business as Usual.’ Competitive advantage comes from how well you execute. Whether it is a five-year category strategy, a one-off negotiation, or resolving a supplier problem. How well you execute makes the difference between success and failure.

3. Focus on the Business Priorities

If you can’t demonstrate your contribution to the business priorities, you are an onlooker.

Today’s CEO wants procurement’s golden triangle – comprising; cost leadership, revenue enhancement, and sustainability. The CPO, therefore,  must focus on their organization’s competitive priorities. For example, speed of sourcing, supplier innovation, and supply chain flexibility to deliver on the business strategy.

4. Build a team of aspiring Brave CPO’s to drive the process

Having a team committed to Category Management and ready to market and sell its benefits to stakeholders is critical.  Utilize skills gap analysis assessments, training to develop existing staff, and build stakeholder engagement skills.

5. Category management as an entrepreneurial creator of value

The best, Category Managers are entrepreneurs with a growth mindset, ready and able to spot and capture opportunities to create value from supply markets. There are many ways to create value and drive savings beyond the apparent opportunities, using volume consolidation and competitive leverage, cost modeling, specification optimization, and supplier integration, etc.

6. Communicate in the business language

Develop a communication strategy, using business, not procurement, language. Communicating with stakeholders in their language will enable them to understand the benefits that procurement can deliver.

Making Category Management Successful:

CPP ‘make change happen’ through:

Change Management:

Supporting your initiatives through preparing for category management, process design and build, embedding the governance and operating model, training, program coordination, and measuring outcomes.

Process Rigor:

Embedding defined processes and world-class materials in category management, strategic sourcing, and supplier relationship management.

Capability Development:

Building high-performance teams through a skills assessment, e-learning, virtual classrooms and face to face training for all who interface with suppliers.

Implementation:

Supporting your program management, team facilitation, performance measurement, benefits tracking and securing financial results.

Nuff said …

If you would like to learn more about how we can support your Category Management program contact us for a conversation