Planning - the missing component from most organisations’ Category Management approach

Posted 23/01/2014

As part of our survey, we asked over 300 global organisations: “What activities does your Category Management process cover?”  Only about 10% of organisations included Category Planning as part of their category management process.

Nevertheless, our survey identifies the risk that if you don’t include robust Category Planning in your process, your organisation is likely to miss many substantial opportunities.  Category Planning is most often the missing piece of the  jigsaw, but many organisations neglect or overlook category planning because there is often short-term pressure to deliver rapid tactical cost savings. Yet robust planning and an integrated category management approach allow companies to increase savings by much more than simple short term gains – in fact by between 25% and 85%, and additionally planning allows procurement to create a clear link between activities and delivery of the business strategy.

How planning fits into Category Management
Future Purchasing recognises that Category Management is a broad concept that incorporates Category Planning, Strategic Sourcing and Supplier Management

 

  • Category Planning:  annual planning of sourcing & supplier management activities by Category Directors. Joint creation with stakeholders of a pipeline of projects based on their priorities and plans.
  • Strategic Sourcing:  creating & implementing sub-category strategies to deliver cost savings and other value.
  • Supplier Management:  proactive post contract management of supplier performance to deliver value improvement from suppliers.


To talk to us more about your organisations category planning get in touch here


Tagged by topic: Category Group Planning , Category Management , Category Management Survey , SRM

  by Allison Ford-Langstaff

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