Category Management Improvement Planning 2023

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Category management improvement planning for 2023

By Mark Hubbard |

Within the Global category management study, we have identified a series of critical activities which help organisations maximise their outcomes.

A core part of that is ensuring that there is a category management improvement plan in place, as this is the driver for ongoing changes in behaviour and outcomes which many businesses need.

Implicit within this is the need for not only a plan, but also a budget to deliver the key activities within the plan. As the plans usually contain a range of initiatives, including communications, training, support and the provision of adequate resource to deliver the plan, having a costed version for 2023 is a critical step in making sure you can deliver your objectives.

This also suggests that you need to have scoped some of the key activities for 2023: how many categories will you be focussing on? How much support will they need, both internally and externally? How much research and market data will be needed? How will the competencies of your team need to be improved, through training and coaching?

This all assumes that you already have the base information on where you stand, and where improvements are most needed to maximise outcomes. Our knowledge and research tells us that strategic alignment (ensuring the main activities of procurement are aligned with the organisational strategy) is crucial, along with high levels of good quality stakeholder engagement.

We believe that assessing where you are today, and building a plan from that, can ensure that your focus is in the right areas to grow your value contribution, even in the challenging economic times many are facing.

At this time of year, thoughts often turn to the next planning cycle, and ensuring that you have the right approach to delivering improvements in your category management approach, and the value you can deliver should be at the heart of that planning.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

Category Management Will Fail - Hands Image

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Category management will fail if procurement and business stakeholders do not collaborate to agree a pipeline of projects

By Simon Brown |

Developing a pipeline of category projects should be a collaborative and creative process

Too often Procurement works in isolation when deciding what category projects to work on. We all know that without the right level of stakeholder support many of these projects simply will not be implemented. This potential misalignment between the procurement team and its internal customers can often result in significant effort being wasted securing stakeholder support for projects, inadequate business sponsorship, lack of procurement involvement in key projects, limited team resource provided by stakeholders and reduced benefit delivery.

Hence, Procurement need to promote the value and benefits of planning and agreeing which projects are going to be worked on over the next 12-month period with their respective business stakeholders.

The importance of strategic alignment

In our recently published FP Category Management Leadership Report 2021-22, 51% of respondents agreed an annual plan of category management projects with their relevant business stakeholders, compared to 39% in 2019-20. Procurement teams clearly appreciate why strategic alignment planning activity is such an important activity. It has similarities with category diagnostics and opportunity analyses which are undertaken to identify the scale of savings available. The real value is spending some quality time with your stakeholders to discuss potential categories to focus on and identify resources required to make the cross-functional working more effective.

Strategic alignment is best completed by senior members of the procurement team along with senior stakeholders. By jointly planning and agreeing the pipeline of activity on an annual basis, procurement is more likely to be made aware of future business plans and be involved at an early stage. Also, business approval of the pipeline makes it more likely that technical resources are made available for category teams. Formalising the strategic alignment approach and linking it to the corporate business planning cycle to create an agreed pipeline of projects helps to facilitate a much more cross-functional approach to category management. There are a number of critical elements to consider.

  1. Context: Understand the landscape and dynamics of the industry sector that the business operates in and its impact on key categories.
  2. Business Planning: Align the process with existing corporate business planning cycles and develop a deep understanding of key functional and business unit strategies.
  3. Learnings: Review learnings from previous years’ category management activities with stakeholders and use them to drive improvement.
  4. Spend: Profile historic and future spend profiles for all major categories, segmenting by business units and major suppliers as a minimum.
  5. Supply Market Analysis: Segment the supply market and understand how current and potential suppliers serve current categories and emerging requirements.
  6. Workshops: Run joint prioritisation sessions with stakeholders to identify the key category and supplier projects to run over the next 12 months, along with benefits.
  7. Pipeline Tool: Document the prioritised category and supplier projects into a pipeline tool that captures savings ranges, project leaders, timings etc.

The output from the strategic alignment activity is a category group plan that should provide project & savings visibility and ensure the workload is distributed evenly and projects are scheduled appropriately. Moving from an unplanned engagement and prioritisation process can be a fundamental change for many procurement teams.  It encourages more collaborative working with business stakeholders rather than Procurement continuing to “sell” their pre-selected projects to the business.

About Simon Brown

Director

30 years procurement experience in line management and
consulting roles.
Previous employment: British Aerospace, British Airways, QP Group
Education: MBA, London Business School. BA (Hons) Business Studies.
CIPS: member

Category Management - More than Strategic Sourcing Architecture

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Category management is much more than strategic sourcing

By Simon Brown |

Category management is the strategic end-to-end process for managing categories of related supplier spend that aligns business goals and requirements with supply market capability. It transforms the long-term value achieved from an organisation’s total supplier spend and delivers a blend of value including improved service, reduced risk, lower cost, higher revenue and ultimately better organisational performance.

Effective internal cross-functional working is the foundation of successful category management. Joint teams of technical and commercial experts work together collaboratively to create insightful category strategies that use facts and data to create a compelling case for change. Areas to consider would include current performance issues, current and future business requirements, current and future spend, cost structures, suppliers, supply markets, supply chains, technology roadmaps etc

Improvement opportunities

All value levers are systematically reviewed to generate maximum number of improvement opportunities – covering operational performance, sustainability, innovation, through-life costs and risk. Value is usually secured via three implementation routes – internal business change, supplier management and sourcing.

In contrast, strategic sourcing is the process used by Procurement teams to source products and services for the business. It creates cost efficiencies across spend categories and minimises supply risks through improved supplier selection.

Commercial teams take the lead and have intermittent touch-points with business stakeholders. Data gathering focuses on spend analysis and supply market research. Implementation focuses on applying competitive tension through RFPs, negotiation, and contracting. Category scope tends to be narrower, with fragmented activities still taking place in the same category as organisation but not necessarily aligned or coordinated.

Value delivery is achieved primarily through reducing supplier prices and margins, rather than driving out total system costs. It can result in stakeholder needs being overlooked and suppliers withholding innovation. It addresses the known current and future needs but will not always provide a new solution to the category requirements.

Business requirements

Strategic sourcing focuses on the technical aspects of supplier qualification and selection whereas category management takes a much broader view of the category profile, where it fits into the wider business model and how best to fulfil those requirements from both an internal and external perspective. The category strategy outlines how to optimize the value from the category using all available value levers whereas sourcing looks to secure value solely from competition amongst suppliers.

Strategic sourcing is usually undertaken as part of step 4 of the category management process. There is often a “go to market” sourcing strategy that outlines the best approach to the supply market and value is secured by only one implementation route – competitive sourcing.

In summary, category management takes a broader view of the category and finds new ways to manage the category from both an internal and external perspective. Whereas strategic sourcing may often source the category in the same way but maybe from different suppliers.

About Simon Brown

Director

30 years procurement experience in line management and
consulting roles.
Previous employment: British Aerospace, British Airways, QP Group
Education: MBA, London Business School. BA (Hons) Business Studies.
CIPS: member

Procurement and strategic alignment Shutterstock image

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Procurement and strategic alignment

By Mark Hubbard |

What happens before Category Management?

The answer to this can fundamentally affect how category management delivers in practice.

Before Category Management is a phase of activity that determines which categories need focus and resources pouring into them in the next period, an element of strategic procurement is crucial because one of two things tends to happen without this. Categories are selected with no logic behind the selection, resulting in resources burned to no effect. Or, ( and don’t laugh, this happens regularly ) all categories are chosen, and procurement faces the impossible task of developing high-quality strategies and then implementing them in every area of spending all at the same time.

This pre-category management activity comes under several names, but all are doing the same thing. We favour ‘strategic alignment,’ although ‘category group planning’ has been used as well. The concept of strategic alignment is to do a rapid review of the internal and external environment to identify likely organisational priorities and map that against categories and known supply chain challenges to identify the most important categories to tackle, given the available resources.

The importance of the internal environment cannot be understated. When we understand the priorities of our stakeholders for the next year, we are far more likely to focus on the category areas that will most impact those priorities. Of course, some priorities span all category areas, such as the emergence of net-zero carbon targets and approaches. Others will be more specific to particular categories.

To get to this understanding, spending time with stakeholders and getting their input on what is essential is critical and forms the foundation of the later category activity. As ever, there will be a whole range of competing priorities in the organisation, and we need a mechanism to help us find a balance between the various expressions of need. Fortunately, such approaches are well developed in category management and can be readily adopted for strategic alignment.

We often find, at this stage, that work is needed on the taxonomy of categories to get them to work appropriately and to iron out some of the assumptions and structures that can cause problems later. One of the background challenges within this ( and one we often see) is how well categories are defined in the organisation. A regular challenge is finding a taxonomy built around organisational or budget structures rather than actual categories. This regularly leads to situations in which the same category is addressed by multiple teams trying to work with budgetary or organisational definitions, often with no reference to each other.

The endpoint of this strategic procurement approach is to develop a plan stating which category areas will be worked on for the next 12 months and showing the linkage to stakeholder priorities and organisational objectives.

Planning sets categories up for success right from the start. Early stakeholder buy-in is in place, and there is clarity for the category leader about what is being tackled and how it links to stakeholder needs.

Look at your category planning phase and see how you can improve it. Suppose your category leads had a clear brief understanding of stakeholder needs and wants and a sense of how the activity linked to organisational objectives. Would they be motivated to produce better, more robust category strategies? We think they would and that you should embrace this activity as soon as possible.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

The Category Management improvement plan - tree web image

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The Category Management improvement plan

By Mark Hubbard |

The application of category management is not something that arrives fully formed into our organisations but is a journey in the development of understanding and insights.

This simple observation clarifies that to excel at cat man and extract the maximum benefit, we need an approach that develops our practice year on year.

As this is unlikely to happen without some intervention, we need to plan for that development. We should have an annual category management improvement plan which targets improvement in the use of the category management process, the supporting skills to enable it and the systems which power it.

Of course, to develop a plan which describes the next step of the journey, it is essential to understand where we are now. A structured evaluation of our current approach is a solid basis for developing improvement plans. We could do this ourselves by designing an evaluation approach or adopting available category management benchmarking. Either way will allow us to describe areas of strength and weakness.

Once we have that clear view, we can build an improvement plan that considers our organisational aims and goals and the fundamental need to improve. It is far better to develop an improvement plan that increases our capability in category management and delivers against organisational aspiration.

As an example, we might identify a weakness in the development and use of business requirements, at the same time as we need to address a business goal that has greater emphasis (such as social value or net-zero carbon). As such, we could focus our attention on the use of business requirements, including those new elements. We could deliver some targeted coaching to category leads to address the expectations, offer workshops in the use of business requirements and test and feedback on examples as category work is carried out. This type of focus, when applied with some rigor, will lead to improvements.

By keeping a close eye on the outputs and targeting the inputs, we will see progress in the application of category management. Of course, the annual improvement plan may want to address several facets of category management in any particular year and may be tailored to individual capabilities and needs. We could also use a range of learning and review techniques, such as peer learning sessions. The final test is the quality of the content of strategies and the measured delivery of benefits from implementing those strategies.

Our research shows that those who improve their Cat Man practice deliver more and better outcomes over time. There is a measurable benefit from being good at this, and therefore the effort put into a category management improvement plan does deliver benefits.

A great starting point is to get a benchmark study on your current practice, which we can deliver from our global category management survey results.

If you want to know more about this, please click the “Let’s Talk” button.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

Supply chain management - the SCRUM approach - scrum image

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Supply chain management – the SCRUM approach

By Mark Hubbard |

2021 saw a massive amount of challenge for procurement teams; supply chain management challenges, political changes, trade barriers, COVID related staff shortages in all areas, blocked ports and working from home have thrown it all up into the air.

A rapid acceleration of COVID suggests that we might be seeing a repeat of the supply chain management challenges ramping up into the early part of 2022, alongside more staff shortage and more working from home – a return to ‘normal’, or to whatever normal is likely to become, seems some distance off.

In 2021, procurement focused on responding to the supply chain challenges while embracing continued distance working. In 2022, we will need to look at how to be even more effective with continuing challenge levels focusing on a different, leaner, lighter approach.

The tools for this do exist around us and making sure we understand how to apply them to the most significant effect is where we need to go. Along with several seminal techniques (Kraljek and Porters 5 Forces first appearing around the same time), SCRUM approaches originated in 1986, described as a ‘lightweight, iterative and incremental framework’ for new product development. However, it is equally applicable to the resource-constrained and task rich environment we find ourselves in today.

It originated to cope with the idea that requirements frequently change and that there will be unexpected challenges – which seems to describe today’s world in supply chains perfectly!

At its heart lie a few easy to apply concepts. One is the concept of an agreed list of tasks and activities which need to happen to complete the project in mind – the backlog. The second is a way of demonstrating which tasks are still to be completed, which are ‘in play’ and which are completed – typically, three sub-lists, preferably visible to everyone participating. Lastly is the idea of a short daily meeting that tests for progress on the in-play tasks and rapidly agrees which new tasks need to be ‘in-play’. The aim is to maximise a teams areas of focus in any particular period.

There are more refinements available. Periods of activity are referred to as ‘sprints’, and each sprint has a focus for delivery and an agreed duration – which may be a couple of weeks. Sprints have a short planning phase and a review phase at the end to look at effectiveness. More mature teams will develop and adopt deeper techniques.

The SCRUM approach is really at the heart of this – redirecting resources, testing for blocks, and generally maintaining momentum. Making these meetings very short and impactful is essential – focusing on the output and not the meeting.

There’s a lot of refinement of technique available and complexity that can be added. However, keeping it simple and directed and being agile and getting to outputs is an excellent place to start.

In this remote working era, getting a group of people to stand around a planning board seems unlikely. There is software that can help, even within the boundaries of MS Teams, where shared task lists can be set up using a card system, replicating the analogue approach of moving post-its around.

The appeal of the approach is that we can use it in a whole range of procurement environments: supply chain management, implementation planning, SRM, systems integration and more.

The challenge is to let go of less flexible working styles, and working out how it links to strict objective setting approaches can be a challenge. However, it is all worthwhile when we can deliver more because we adapt flexibly.

SCRUM – try it in 2022; you’ll like it!

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

Lessons for category managers

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Lessons for Category Managers from 2021

By Mark Hubbard |

What a year. I am sure we are all looking at 2021 as particularly challenging for a whole host of reasons, both professionally and personally. It is well worth reflecting on any insights that living through such times provides, with this in mind here are my lessons for category managers for 2021.

Self-care

At a personal level, the need to look after our own well-being, amongst the turmoil of the past twelve months, has stood out as something to try to manage. Much as working from home has many benefits, one of the downsides is losing the boundary between home and work. It is entirely possible to sink into a work/sleep cycle and forget the need to maintain yourself through reflection, exercise and investing in friendships and interests. There are times when the accumulation of events combines to mean that more self-care is necessary. I know that I have been variable at this through the year, and I think I’m a lot more effective when I have that balance right.

Having seen several people struggle with health this year is also a reminder to take the necessary time and effort to remain healthy, as far as circumstances allow. Given the alternatives, making room for whatever approaches you need to follow seems sensible.

Flexibility

A significant form of stress for many is the loss of elements of control over what they are doing. Current circumstances mean that many people are buffeted by change, different demands, and calls on time-varying daily. So how do we adapt to the need for extreme flexibility when it’s like this, being able to bend without breaking? Maintaining a focus on the endpoint we’re trying to get to is a real challenge; it is easy to let go without thought, more challenging to maintain direction and focus while still being flexible. Objective setting and management is a real challenge, given how corporate systems appear to be set up with minimum flexibility and interaction between different parts of organizations. Perhaps better objectives would include flexibility and approach to ensure that the changes we need to incorporate make it into the outcomes we agree.

Applying category management

A regular insight through the year is the challenge of getting the principles behind category management across to people who have to apply them. Many, of course, have seen the principles outlined in CIPS courses. However, translating that into insights that work in our day-to-day environments is often a next-level challenge. The theory all works well; however, getting to meaningful insights usually requires a lot of thought around the implications of being in a particular ‘box’ in various models (like Kraljik). Knowing to ask a couple of relatively simple questions can help. This would include ‘if I am in this box, what is the maximum value I can extract here, how would I do that, and ‘what would it take to move into a different box’. Developing good answers to both of these is a solid starting point to building a strategy.

The return of PESTLE

A few years ago, PESTLE analysis was unpopular and uninteresting for many. It is a less exciting tool with well-established supply chains in a relatively stable economy. It is a significant area of focus in today’s climate as teams map out the broad risk environment they are inhabiting. Impacts come from all directions; pandemic, interest rate rises, changes in border control and export approaches, net-zero carbon, taxation policies, workforce shortages, materials shortages, transport disruption.

Anything that helps us map this complex mix has to help, and it still works well. Of course, making sure we go beyond a single word description of the risk is essential; we should be describing the risk and move on to how we might deal with it to get the most out of the tool.

Looking forward

So there are my key lessons for category managers for 2021.

Does 2022 feel like it will be dramatically different? There’s likely to be the same pressures, the same instability that we’ve seen this year. We can adopt good techniques to help us with that, and making a little space to do that and look after our well-being should be a priority for all of us.

Best wishes for a fantastic new year!

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

Category Management

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What should be in a category management strategy?

By Mark Hubbard |

A common challenge area for category teams is understanding the breadth of content that a category management strategy should contain. All too often, it becomes self-limited to include only areas that procurement has under its immediate control, such as sourcing. However, an excellent category management strategy will address many aspects of the business which surround the most effective acquisition and use of a set of products or services.

At present, we work from a core list of 88 different areas of value that could be addressed, with a short series of broader organisational benefits accruing when undertaking category management. The core list includes familiar areas ( such as leverage price), others which might be considered (such as optimise supply chain), and some which rarely make it into category strategies even under extreme encouragement (like addressing the time to market for new products or services). The extended list also addresses areas such as an increase in organisational competence, reduced cycle time for category strategy development, broader stakeholder support, better alignment with organisational strategic goals.

Future Purchasing's approach to category management strategy development
Future Purchasing’s approach to category management strategy development.

The challenge, as ever, is for the category strategy to receive the attention it needs as a primary way of delivering critical bits of organisational strategy ( as opposed to just providing access to a lower price). Two top 100 CEO’s (BP and Mars) have recently commented on the absolute need for sustainability initiatives to be embraced by their supply chains, critically, delivered by category strategies that make evident links from the business strategy to the necessary actions within the business the supply chain.

For example, we see category management strategies that include clear targets for changes relating to net-zero carbon, which drive specific actions and changes both in the specifications within the products and services being bought and within the supplier, selection approaches, supplier management approaches, contracting, internal processes, and more.

This broad ambition for all-embracing category strategies is crucial and needs to be taken on board by those responsible for delivering the overall category management program. Reviews, coaching and training all need to align to share the expectation for what is possible. In addition, the resource required to create organisationally based category strategies needs to be carefully curated and used to their full effect.

Without understanding what is possible and the vision for what could be achieved, many category programs default to addressing price and supplier selection. This is so limited; using a thorough process where something a lot simpler would suffice can waste time and effort.

The issue now is, who will create and sustain the broader vision for category management in the organisation? If this is embraced and communicated at the right level, there is more likelihood of success. Being able to explain the breadth of opportunity in a compelling language is at the heart of all category management programs.

It is worth examining your programs to determine how well this is being done and then ensuring that you address any issues identified by that review.

The critical recommendation is not to refer to a category management strategy as a sourcing strategy, as that is the moment that the ambition needed is lost.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member

Build category management capability

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Build category management coaching capability

By Kathrine Western |

Build category management coaching capability and unlock your team’s full potential

Businesses are under pressure like never before. Limited supply, rising prices and staff shortages. If ever there was a time for leadership teams to pull together, it is undoubtedly now. Those that can collectively identify and tackle issues head-on, drawing and building upon the skills and knowledge of their people, are the ones most likely to thrive. Wouldn’t it be great if there was a recipe for that? Well, there is, but for many, it’s been hiding in plain sight, building an internal business category management coaching capability.

Building an internal business coaching capability

The use of business coaching to develop people and get results has been around for decades, but most organisations still do not realise its full power. Having a business coach is often thought of as the preserve of senior executives seeking to transform their organisations. In this context, the coach is usually recruited from outside the business. Often overlooked, however, is the potential for coaching to be used as a management tool from within. Done well, this has the potential to supercharge levels of employee performance across the board. 

When it comes to successfully implementing category management and supplier management, it is apparent that those procurement teams that have developed their coaching skills have the edge. Coaching has become a way of life and makes a daily difference to business performance. The focus is on the coach helping others to find the best solutions to their particular challenges. This might take the form of leadership teams coaching one another to plan transformation at a strategic level or line managers coaching their team members as they undertake category management and build their procurement skill sets. 

Coaching in the context of category management

Embedding category management and supplier management is challenging for most organisations, so how might coaching have a high impact?

Here are a few examples, starting with the early stages of strategy development, where success depends on high-quality stakeholder engagement and project planning. A great coach can work with their coachee to navigate this complex territory by helping them to clarify objectives in their own mind and also with the category sponsor and cross-functional team developing the strategy. They prompt the coachee to ask themselves searching questions about the current situation and who are the key players that must be engaged. It takes skill and discipline to do this in full ‘listening’ mode, without telling, but this is one of the secrets of a great coach. 

Gathering the right data and deriving insights that others don’t see, or cannot articulate, is also essential and, here again, coaching can help someone take stock of the information they have, what they might need and how they might go about getting it. A coach should ask the questions we fail to ask ourselves – perhaps because we fear not knowing the answer deep down. 

Later on, options generation and assessment are critical activities from where much of the business value is derived. Here a coach would support their colleague in coming up with creative ideas and thinking through the possible consequences of each, ahead of discussing with the category team. The coachee ultimately decides, but the quality and speed of that process can be significantly enhanced by skilled coaching. To top it all, the coaching relationship should be empowering and motivational, and who would say no to that?

Train the coach programme

We have developed a targeted ‘Train the Coach’ programme delivered over two days to accelerate the transition to such a coaching culture. It is designed to enable people to discover for themselves what coaching is all about and how it feels to coach and be coached. Highly practical and interactive, we know it’s highly effective because it provides proven coaching techniques and models but positions them in the context of relatable category and supplier management scenarios.

Details of this programme are available in our prospectus with you can download here. If you would like to talk about your training needs further book a time to have a chat above.

Perhaps it’s best at this point to share feedback from previous participants:

quote mark

“I enjoyed the theory but also being thrown in at the deep end so I could practice what I learned. I wasn’t always comfortable, but the role-play sessions were very rewarding and powerful. I feel incentivised to keep doing it!”

“Our leadership is really embracing this, and it’s helping us to gel as a team for the very first time.”

“In my career, this is the training that has most changed what I do.”

“The training is brilliant: it has just the right blend of theory and practice. I will definitely use this regularly in my work.”

“We were shown how to use the approaches properly, and I now have a much better consciousness of how and when to apply the different techniques.”

“Using the process meant I was able to think, reflect and find a solution to an ‘impossible’ problem in just 15 minutes!”

“This short course can be a game-changer, supporting procurement teams at the time they need it most. As well as developing peoples’ coaching skills strengthens team relationships, supports the early resolution of issues, and helps maintain enthusiasm and commitment.”

“This approach is highly recommended if you’ve embarked on an ambitious programme of change.”

About Kathrine Western

28 years procurement experience in line management
and consulting roles.
Previous employment: Nissan and Reckitt Benckiser
Education: BA French and German, Durham University
INSEAD Young Manager’s Programme, Fontainebleau
APICS Operations Management
Organisational Collaboration, OU Business School
French, Spanish & German

Category Management Survey 2021

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Insights into Category Management

By Mark Hubbard |

The 2021 global category management survey is underway, and even at this early stage, some interesting insights into category management are developing. It isn’t the responses to single questions that paint dramatic pictures, but when two questions are analysed together, we get some real areas of interest.

(You can add your voice to the study by clicking this link to the survey)

Here are a few areas we’ve noted from initial observations.

1. We plan to deliver category management, but we don’t invest

56% of respondents say they have a formal plan for adopting category management, but only 23% have sufficient financial investment to deliver their expectations. For a significant proportion of organizations, their efforts to implement category management are likely to fail because of a lack of resource, support, systems or engagement. We know that category management programmes are challenging to set up and maintain, even when they deliver excellent value. However, this insight suggests there needs to be more work on aligning both the plan and delivering that plan.

2. Stakeholder engagement is an issue (again)

61% of respondents say they don’t have strong support from stakeholders, 13% of stakeholders have objectives for category management, and 43% have an annual plan agreed with stakeholders. This suggests, at a minimum, that a number of the annual plans which are approved don’t have strong support or objectives for participation in the development of category strategies. This is reinforced by 50% of respondents being clear that they are co-creating strategies with stakeholders – and 50% don’t. Overall, the challenge of making category management relevant to stakeholders and helping them see it as a business process and not a procurement activity remains central to much of what we need to do.

3. Category Management is still not a business process

Only 17% of stakeholders have adopted category management as a business process. We all know that the best strategies are co-created and deliver value far outside the constraints of just choosing a supplier. The best category strategies are indeed business-wide agendas for capturing value from a category of spend. This result suggests that our ability to engage with the business to deliver strategies still needs considerable work.

4. COVID has had an impact as expected 

We see a lot of effort to support operational performance, even when faced with the financial consequences of the challenges around us.

Operational performance and financial performance have been affected differently. 40% agree that there has been a negative impact on operational performance, 34% disagree. However, 46% agree there has been an effect on economic performance, and 31% disagree. 

We are continuing to collect responses from around the world of procurement and category management, and we’d be delighted if you would like to join in. There is a prize draw for everyone who completes the survey, and of course, there is a comprehensive report available in early autumn. We think that having this evident view of Insights into Category Management and what makes it work benefits our whole community, so we’d be pleased to hear any comments you have on the outcomes, the process, or what you’d like to see in the report.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member