We’ve carried out a lot of research on what the returns are from being great at Category Management ( http://www.futurepurchasing.com/catman-leadership-executive-summary-report-2017 ) and the answer is compelling. Category Management is a critical lever to deliver improved procurement – and business performance.
If you’re great at category management, you will contribute 15% to your business performance.
The numbers come from analysis carried out by our partners at Henley Management College, who show a strong correlation between improved business performance and businesses who describe themselves as leaders in category management.
In part, this comes from the ability of those leaders to deliver greater benefits thorough great application of category management, and to apply the approach in more areas. This increase in return and scope allows for a far higher level of contribution than follower businesses.
To get to this higher level of penetration and delivery, the leaders are great at the top 19 Category Management practices. Our survey identifies 40 areas of Category Management skills and expertise, and from the leaders answers, we can see which are the areas that have the most effect.
In part, and contributing to the overall business performance gains, is the ability to activate and take advantage of high performing cross functional teams who exhibit great internal collaboration. Being able to work across the organisation, developing more holistic approaches, and being able to identify and address a wider range of business issues to incorporate into category strategies all add to the effectiveness of the leaders.
In turn, this collaborative approach allows category teams to access more and different areas of value, getting well beyond the price experienced by the business, into areas such as innovation contribution, market expansion, fundamental cost structures and underlying customer value add.
Taken together, the spread of value delivered allows leaders to provide increased revenues, reduced risks in a broad range of areas as well as the expected reduced costs.
We’re experts in helping businesses become leaders in Category Management and we
can help you on the journey to deliver 15% contribution to your business.
Infographic: The Impact Of Being Great At Category Management
by Mark Hubbard