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 category management 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.

What is Category Group Planning?

  • It is a high-level opportunity assessment of the entire Level 1 Category Group spend married to stakeholder requirements to produce a long term plan for value delivery for the category of spend. Includes prioritisation, resourcing and scheduling of benefits.
  • This is a key task that senior members of the Procurement team undertake with the involvement of senior stakeholders. It is a planning process at category level 1 (category group) that ultimately produces a pipeline of projects that category managers implement.
Download Our Category Group Planning Process Overview

Key Elements of Category Group Planning

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
  • Integrated with existing corporate business planning cycle.

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
  • inadequate sponsorship
  • 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 We Can Help You 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:

  1. Stakeholder Involvement: 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.
  2. Standard Tools: 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.
  3. Prioritisation Workshops: 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 group plan.
  4. Team Agreement: 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.
  5. 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.

Client Testimonials

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 was invaluable.”

“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

Have Questions?

Request a free of charge consultation.

After you show us how category group planning operates in your business, we can walk you through the steps you need to take to transform your category group planning performance and rapidly increase your return on investment.

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Read More

Category Management for Procurement Professionals
The Business Case for Category Management
Implementing Category Management
Category Group Planning
Track8 Procurement Software
Global Category Management Leadership Report 2017
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