CATEGORY MANAGEMENT

It is the process of pooling similar products into a singular category and then addressing all business initiatives for that category as a whole. It is a strategic approach to procurement where organisations segment their spend into areas which contain similar or related products enabling focus opportunities for consolidation and efficiency. E.g. Direct versus Indirect materials, Raw Materials versus Packaging Materials, Capital items versus Spare Parts, Utilities versus Consumables, and Professional services versus Business services and so on.

The Key Success factors are:

  1. Cross functional talents
  2. State-of-the are spend analytics
  3. Total Cost of Ownership
  4. Stakeholder involvement
  5. Written Sourcing Plans
  6. Performance calculation and reporting

Strategic Sourcing is a subset of Category Management and triggers the beginning of the long term sourcing plan for the defined spend category. It represents the First Mile value delivery of the entire sourcing journey of the spend category.

Category Manager is a Key Role in procurement which is working on slew of missions and is exhibiting diverse capabilities.