Future Purchasing Advent Calendar Window Seventeen

Posted 17/12/2016

“66% of Leaders agree their category management approach is their one 'way of working' for all procurement activity”             

Our analysis places this as the 14 th most important driver for category management performance and success. Leaders have clearly made significant progress in this area, with 66% agreeing to some extent that it is their ‘one way of working’. Only 42% of followers share the same positive perspective, with 33% of followers disagreeing with the statement.

The 2014-15 survey identified very consistent results for followers. However, there has been a significant reduction in the leaders results – down from 87% reporting category management as the "one way of working" for all procurement activity. This itself is a reduction from the 92% reported in the 2012-13 survey.

Category management is the core way of working for most procurement teams. It provides the foundation for all procurement activity by defining key tasks and how they should be undertaken. It provides a common language and ensures that a consistent approach is deployed to deliver value to from supplier spend.

Followers have always struggled to establish it as a fundamental business process, recognised and used consistently across the business. 

This years’ results might suggest that there is a reduction in the success that leading teams are having with this objective, but it is more likely than having developed a clear category management process to deliver value from categories, they have perhaps developed alternative routes for accessing value via supplier innovation, supplier relationship management or other as well.  Experience would suggest that the one way of working was the necessary initial building block, which is backed up by this research.

New Year’s Resolution no. 17:   Leaders make category management their ‘one way of working’ by driving all activity through a single category management structure and process.  If you don’t have a single category management process, with guides, templates and tools, get one: this is Category Management 101. Either buy it in, or create it yourself but remember if you create it yourself this will take a lot of time, when your time might be more valuably applied creating value for the business rather than process. Ideally have this housed on-line – manual category management processes are now quite clunky and out-of-date in this digital age, and slows teams down.

Remember to consider the wider aspects of making this process work.  This isn’t just the domain of the procurement function, but requires a wider business readiness for a focussed category management approach.  Establishing the maturity of procurement capability across key areas such as Business Alignment, Structure and Governance, Leadership, People & Team Strength, Process Excellence & Technology and Category & Supplier Management processes are a key five of 10 I would recommend.  Conduct a gap analysis of where you are now, and where you need to be to realise the strategic objectives of the business and plan realistically how you will close the gaps.  

Remember: getting a category management process ‘scribed’ is relatively easy, working out how to make it ‘stick’ as the one way of working isn’t. That’s why the Leaders are as few as 28% of us. But it is possible, with focus, and with returns of 3 X followers or more, why wouldn’t you?

You can click below to download our 2016-17 Global Category Management Leadership Report Executive Summary.

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

  by Allison Ford-Langstaff

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