Implementing Category Management

Duncan Brock– Future Purchasing

dbrock@futurepurchasing.com
t: 0118 978 2287
© Copyright Future Purchasing, 2011
m: 07961 125519 Page 1
 Category Management

Category management is:

 A structured process to maximise
value from an organisation’s total
supplier spend

Covering:
 Category Planning
 Subcategory Sourcing and
 Supplier Management.

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 Approaches to developing Category Strategies

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 Approaches to developing Category Strategies

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 CIPS Category Management Process

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6

Initiate/ Identify & prioritise Prepare/Present Implement Improve &
Prepare Opportunities Category Strategy Category Strategy Maintain Enhance

Activity Activity Activity Activity Activity Activity

1. Project Charter 7. Historical Spend Profile 22. Sourcing Strategy 23. Supplier Selection 35. Contract Administration 28 Supplier Review Meetings
Process
2. Stakeholder Engagement 8. Forecast Spend Profile 36. Contract Management 39. Supplier Development
24. Statement of
3. Project Governance 9. Whole Life Costing Requirements 37. Performance Scorecard 40. Sustainable Procurement

4. Kick-off Meeting 10. Business Requirements DG2 25. Contract Terms

5. Quick Wins 11. Supply Market
Research 26. Service Level
Agreements
12. Supply & Value Chain
Analysis 27. RFP’s

13. Market Forces Analysis 28. Auctions

DG1
14. Supplier Profile 29. Proposal Evaluation

15. Supplier Financial 30. Negotiation

Analysis
31. Business Benefit
16. RFI Measurement

17. Non Disclosure 32. Contract Award

Agreements
33. Supplier Transition
18. Portfolio Analysis
34. Project Review &
19. Supplier Perception Closure
Analysis

20. Options Generation

21. Risk Assessment DG3

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 Category Management - 10 Guiding Principles

To maximise value from Category Management:

Guiding principle 1 --- Value Creating

Guiding principle 2 --- Facts and Data Driven
Guiding principle 3 --- Consistent Application
Guiding principle 4 --- Flexible Application
Guiding principle 5 --- Cross-Functional Working
Guiding principle 6 --- Easy Access
Guiding principle 7 --- Data Capture
Guiding principle 8 --- Project Management
Guiding principle 9 --- Governance
Guiding principle 10 --- Interactive Environment

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 Overcoming resistance
Barriers
1 Local vs global
2 Not enough time
3 Out of bounds
4 Authority to act
5 Alternative approaches
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Examples
• I can source better than you
• I can’t see any benefits
• I can’t wait for a long process
– I need it now
• Operational issues
• You don’t understand
• I’m in control, I don’t need
your help
• I report locally not globally
• This is not in my objectives for
the year
• Category management is just
about good enquiries
• I use my own 5 step process
Best in Class Approach
• Clear governance models
• Compelling strategies –
everyone wins
• Flexible application of
processes
• Lead by example
• Recruit experts
• Compelling business case for
change
• Recruit sponsors for areas of
spend
• Objectives alignment
• Roll-out and sell benefits of
the process used
• Education and coaching
 Powering Excellence in Category Management

What does PROCAT do?

 Enables category management

 Accelerates savings
 Boosts team performance
 Increases rigour
 Optimises supplier relationships
 Improves project visibility

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 Powering Excellence in Category Management

What does PROCAT Provide?

 Sourcing – process, tools &

templates
 Supplier management – process,
tools & templates
 Built in approval process
 Online management of sourcing
and supplier management
activities
 Online Community

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 PROCAT – e-enabled Category Management solution

Step
Improve & Enhance
6
: Step 1 :
Initiate / Prepare

Step 5 :
DG1

Maintain
Step 2 :
Identify & Prioritise
Opportunities
DG3

Step 4:
Implement Category Strategy DG2
Step 3 :
Prepare/Present Category Strategy

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 PROCAT: Take a Tour

1. Homepage
 A performance dashboard,
providing up to date
information on all the current
sourcing and supplier
management projects.

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 Take a Tour

2. Process Materials
 A comprehensive set of guides
providing a full explanation of
how to use the tools and
templates.
 All the templates can be
downloaded and used in a live
environment

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 PROCAT: Take a Tour

3. Decision gate
 The formal means of progress
checking and approval for
each project.
 Guidance and templates are
provided to help both the
project team and the people
who are approving the project.

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 PROCAT: Take a Tour

4. Project Overview
 An up to date overview of all
the live category management
projects that the user is
working on.
 A number of projects can be
linked together in a programme
to provide additional
management reporting of
progress and KPIs.

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 PROCAT: Take a Tour

4. Project summary
 A live dashboard is provided for
each project showing the
progress made against each step
of the category management
process, and highlighting
important project information.

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 PROCAT: Take a Tour

5. Project discussions
 PROCAT provides discussion
forums for each project, and
also for the wider community
that are using PROCAT.
 Email alerts prompt the users
that updates have been made
to their project discussions.

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