Category Group Planning for Procurement Professionals
Working on the right category and supplier projects with the best return on investment
(ROI) is crucial for procurement success. This requires collaborating with your internal
business stakeholders and fully understanding their strategies, plans and budgets.
This is the foundation for building a joint pipeline of category and supplier projects
for each category group that is fully supported by the business. Creating a category
group plan is a clear differentiator between leaders and followers in Procurement.
How do you create excellent category group plans with realistic savings
The 4th top practice in our recent Category Management Leadership Report was the
creation of an annual plan of category & supplier projects that is agreed collaboratively
between procurement and stakeholders. Category Group Planning key features are:
Collaboration with business stakeholders
Spend profile of category group at level 1 e.g. Marketing, FM etc
Segmentation of suppliers
High level assessment of supply market conditions
Strategic analysis of category group
Pipeline of agreed category and supplier projects
Prioritised project plan with agreed resources
Why is category group planning difficult to do?
Identifying suitable projects is often either a ‘black box’ activity with little
input from stakeholders or an unplanned process where procurement responds to last-minute
stakeholder requests. The misalignment between procurement and business stakeholders
results in the following:
significant effort wasted on 'selling' projects to stakeholders
lack of or late procurement involvement in key category projects
limited resource provision by stakeholders and
reduced benefit delivery
Our recent survey results indicate that category group planning is not embedded
in many organisations with only 6% of leaders claiming that their approach is excellent.
Five ways to improve your category group planning performance
FP recommends formalising a joint prioritisation approach with stakeholders that
is aligned with the business planning cycle. This category group planning approach
helps to build an agreed pipeline of category & supplier projects for the next
12 month with your stakeholder teams. Specific areas of focus should include:
Build a cycle of review meetings with stakeholders to discuss business strategies,
objectives, plans and priorities. Use these meetings also to build trust, gain commitment
and contribute alternative ideas to the process.
Create a specific analysis tool for prioritisation activities including business
strategy summary, spend analysis and supply market analysis. Include a prioritisation
grid to capture key project details e.g. value, geographic scope, leader etc.
Run similar sessions for each category group with a broad cross-section of relevant
staff as this helps to build consensus and develop an integrated and consistent category
Ensure that all projects are fully discussed and all relevant information shared
and challenged. Use an opportunity matrix to plot categories against two criteria
- level of business impact and ease of implementation to drive consensus on the priorities.
Time and Resource Plan:
Use a GANTT chart to schedule the projects with agreed start and end dates. Discuss
timings, business priorities and resource needs and adjust timings as required. Secure
senior stakeholder commitment to provide cross-functional resources.
How I learnt to plan my category project activity more effectively
“The practical nature of the methodology and the well-equipped toolkit with built-in
flexibility worked really well for me.”
“Defining the work a Category Director should be doing versus a Category Manager
“Having a uniform way of creating the category group strategies will be helpful
in driving forward the need for stakeholder mapping, supply market segmentation and
gathering stakeholder requirements. Feel fired up and ready to do it. Cannot wait
to get some meetings set up with team and get cracking.”
Category Directors, Hotel Group
Let us walk you through the steps you need to take to transform your category group
plans and create a credible pipeline of value delivery projects.
Request a free of charge consultation >
Or call Simon Brown on 07961 110529
Compare Your Category Management Performance
Category Management: 5 Step Process
Category Group Planning
Track8 Procurement Software
FP Category Management Survey 2016 - 2017