The short answer, is, unsurprisingly, very important . In a recent global survey by FP ‘Developing the Category Management skills’ of the Procurement team and business stakeholders is given much more focus by Leaders.
However, we also found that truly embedding these skills is not straightforward and that only 53% of Leaders feel they have achieved what they set out to do. These leaders confirmed that the main reason for failure is a lack of a really strong learning strategy in favour of provision of a bundle of training events.
In particular, companies who had a clear competency assessment framework to baseline
existing skills and track improvement reported that their Category Management performance
was and enormous 169% greater than those who didn’t.
An organisation that seeks to improve its Category Management performance should understand the type and level of each skill required to deliver the improvement – and define these in a competency framework. Online tools speed up this process and the key steps in designing and using a framework are:
I like to use the graphic below to explain the Category Management Process. Category Management training should address all the 13 steps of the process.
Step 3: Define Internal Stakeholders' Business Needs
Step 11: Assess Change Management Requirements
Step 12: Communicate Change
2. Another area where the topic is not covered in enough depth is in gathering intelligence and facts about the supply market. Often teams assume they know who the suppliers are without any formal review or rigorous research.
In conclusion, more emphasis in training programs should be given to stakeholder management and related “soft skills” , and also techniques on how-to effectively conduct supply market analyses.
It’ll be well researched - we want to hear about best practice and how we could
use it; it’ll be interactive - no one wants to do training these days where the presenter
talks to you for hours; and it’ll be custom built - we want training which is relevant
to public procurement, our categories and also the size and type of organisation
is Vice President
International Institute for Advanced Purchasing & Supply
The International Institute for Advanced Purchasing & Supply believes that best practice in category management training is not simple, and that what and how it should be done is contested. To understand why it is contested requires an awareness of the difference between two contending ways of thinking about category management competence development within an organisation.
The first, and currently dominant, way of thinking about category management competence development in the profession is called Tactical Spend Management. The second way of thinking focuses on Strategic Value Flow Management . Each of these approaches can be differentiated in relation to three issues:
1. What is meant by category management and strategic sourcing as a process and methodology;
2. Who should be involved in the process ; and,
3. How does an individual or organisation develop and then demonstrate competence
In our experience most organisations adopt the former (‘tactical cost-down’) approach to competence development, rather than the latter (‘strategic value for money’) approach. The International Institute, and all of its own qualifications and competence development support work, is firmly based on the belief that best practice in category management requires the rejection of the Tactical Spend Management approach and the adoption of the Strategic Value Flow Management approach.
Our view is that few managers understand this distinction. This raises important questions about the current competence of those making decisions about what constitutes ‘best practice’ in category management process and competence development, and how it should be implemented in their organisation.
Further reading on this important topic can be found at:
Cox, Andrew, Sourcing Portfolio Analysis: Power Positioning Tools for Category Management & Strategic Sourcing (Earlsgate Press, 2014)
Developing Competence in Procurement & Supply Management – The Two Options (IIAPS White Paper 2015/1)
Andrew Cox & Paul Ireland, Value Sourcing (Earlsgate Press, 2015).
Founder of blogging website Procurement Insights and Blog Talk Radio host
When it comes to category management training, we would be wise to heed the words of Eric Hoffer by Jon Hansen
"Category Management is a strategic approach which organizes procurement resources to focus on specific areas of spends. This enables category managers to focus their time and conduct in depth market analysis to fully leverage their procurement decisions on behalf of the whole organisation. The results can be significantly greater than traditional transactional based purchasing methods." - CIPS
By the time I was halfway through the above description from a CIPS course on category management I was already beginning to dose off.
If this was the association's attempt to generate interest in category management they failed, and failed miserably. Can anyone say Bueller, Bueller?
Or to put it another way, in asking the question "What does best in class category management training look like?" this is certainly not it.
So what should category management training look like?
I am inclined to agree with Kurt Salmon's position that "traditional category management is an old concept in a brave new world," and as a result, must "encompass a broader set of capabilities than in the past."
While the Salmon perspective focused on the retail industry - which included an end-to-end view from category creation and development, through to end market impact - the same expanded view should apply across the board regardless of industry and sector.
In other words, procurement professionals no longer operate in the vacuum of our traditionally defined functional roles. We have to become more strategic in both our thinking and understanding of what we do and why we do it.
Herein of course lies the greatest challenge in terms of training.
With CIPS for example, the reference to the Kraljic Matrix confines category management to the traditional "maximise buying power while minimising supply risks" mindset. This does little to take into account the aforementioned brave new world, and elevate both the professional and the practice to where it needs to be in terms of relevance and impact.
For those who are advocates of the Kraljic model, this may seem harsh. But consider the points raised in a February 9th, 2010 Supply Chain Digest article titled " Another New Take on Supplier Positioning. "
Citing CPM Training founder Andy Williams, the article highlights what it considers to be the "two important issues" with the Kraljic model, which are:
1. This model it does not take into account the supplier’s perception of the buyer, clearly an issue of some importance. The buyer's view of how important the relationship is, based on the buyer's view of spend alone, often would be seen differently through the supplier's eyes.
2. Thinking only in terms of supply risk is too limiting. The better question, says Williams, is: Could this supplier contribute to a real improvement in the way the buying organization works and competes? He terms this "supplier strategic potential."
Whatever other challenges or issues one might find with the Kraljic model - which was first introduced in 1983 - the above two points carry a great deal of importance in that they reflect the overall attitude of the old buyer mindset. Specifically, an adversarial versus collaborative or relational approach, the latter of which is critical to success in the new global marketplace.
In this context, the question of what category management training should look like is in reality a microcosm of the much larger procurement world question . . . what should procurement training look like?
Until the procurement profession as a whole begins to view itself as part of a brave new world, we are likely to continue to be both defined and confined to the traditional functional silos of the past. This includes our training programs.
Perhaps in the end, the following words of Eric Hoffer provide the best answer in
terms of training and education;
"In times of change learners inherit the earth; while th
e learned find themselves beautifully
to deal with a
world that no longer exists
by Anna Del Mar