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
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