The Savings Delivery Rates from Category Management Projects

Posted 27/07/2015

This month we look at the savings delivery rates from Category Management projects and the additional savings available by optimising Category Management.

The survey demonstrates that all respondents believe that optimising Category Management will deliver substantial value for their organisation – boosting current value delivery levels by 49% for leading organisations and up to 111% for the majority of respondents.

Click to discover the savings percentages achieved by Category Management Leaders and Followers in the DELIVER section of the 2014-15 Category Management report we are sharing today

The survey confirms that Category Management is the core process for most Procurement teams, yet there is perhaps still an unwillingness to fully embrace it in the procurement community, as well as stakeholders.

“Lean” communicates the benefit of the activity in one motivating word. In comparison, Category Management sounds relatively mundane, uninspiring and concerned with maintaining the status quo - consistent with the definition of management by Harvard University’s John Kotter: “Management is a set of processes that keep an organisation functioning. They make it work today…”

In the survey, Category Management as implemented by leading teams is more aligned with Kotter’s definition of leadership: “It is about aligning people to the vision, that means buy-in and communication, motivation and inspiration”. It is about transforming the way the category is driven in the future.

In our view, the label “Category Leadership” more accurately communicates the power that optimised Category Management delivers at the category level.

Today we are sharing two topics from the DELIVER Section from our 2014-15 Category Management Survey

The overall report is structured around the five Category Management Building Blocks we have identified. The DELIVER Building Block is the end results produced by the Category Management activities and programme. It is assessed through a range of metrics such as level of spend penetration, cost reduction and cost avoidance, supplier performance, reduced level of risk, better service and occasionally increased sales. The findings we are sharing today cover:

  • What overall savings rates were achieved by respondents from Category Management?
  • What additional savings delivery could respondents achieve by optimising Category Management?
  • How can savings delivery from Category Management be increased?
  • How can organisations optimise their approach to Category Management?

 

Read the DELIVER section of the 2014-15 Category Management Survey

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Tagged by topic: Category Management , Category Management Survey , Procurement Transformation

  by Mark Webb

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