Preview

The 2019 Global Category Management Leadership Report

mind the performance gap

A research collaboration with Henley Business School, University of Reading

 The survey results demonstrate a potential to triple
value impact through category management leadership

Cost 3.3x
Revenue 2.9x
3x Value Impact Risk 2.4x

Teams excellent at
Toolkit identifies applying CatMan
all opportunities 1 2
4 key category
management Strong stakeholder 4 3 Excellent category
indicators support strategies

23 top category
management
practices

© Copyright 2019, Future Purchasing Consulting Limited, All Rights Reserved. 2 2019 FP Global Category Management Report
Preview
 22% of survey respondents are Leaders in CatMan whilst the
other 78% are Followers, working towards improvement
60%

50%

40%

30%
Leaders (22%)
20%

10%

0%
Stage 1. Not Started Stage 2. Basic Stage 3. Improving Stage 4. Embedded Stage 5. Optimised

Compared with the 2016-17 survey, there has been a decrease
in the percentage of respondents categorising their category
management approach as optimised or embedded – down
from 28% to 22%. More than three quarters of respondents
still feel that their category management approach has not
reached the embedded maturity level.
For many organisations the focus is on RFPs and negotiation,
with only a few supportive stakeholders and limited availability
of training and tools. Engaging stakeholders and working
collaboratively with them to unlock the value available from
each category is a running theme across this report.
Respondents categorising themselves as Not Started, Basic or
Improving were grouped together as ‘followers’ (78%). Those
who categorised themselves as Embedded or Optimised were
grouped together as ‘leaders’ (22%).
This two-level categorisation has been used to analyse all
questions so that we could establish whether the practices and
outcomes of the ‘leaders’ were substantially different from the
‘followers’.
The survey results demonstrate than the performance gap is
widening between leaders and followers compared with the
2016-17 survey. Leaders are improving, whilst followers are
growing in number and their performance is deteriorating.

© Copyright 2019, Future Purchasing Consulting Limited, All Rights Reserved. 3 2019 FP Global Category Management Report
Preview
 Category management leaders generate more than
double the savings than category management followers

100%
Leaders also
improve:
80%
• Risk and revenue
Potential: benefits
Leaders: €112,000*
60% • Stakeholder
€62,000* collaboration
Category
Strategy • Team net promoter
Spend 40% Followers: scores
Coverage €28,000* • Stakeholder
satisfaction scores
20%
• Voice of supplier’
scores
0%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Savings Rate

*Total savings achieved per €1 million spend

© Copyright 2019, Future Purchasing Consulting Limited, All Rights Reserved. 4 2019 FP Global Category Management Report
Preview
 Top 23 category management best practices
that drive leadership
Priority Section Practices Average Followers Leaders
Rank Score Score Score
1 STAKEHOLDERS CatMan well aligned with organisation's broader strategic objectives 45% 35% 78%
2 LEADERSHIP Financial investment in CatMan sufficient to deliver expectations 29% 20% 60%
3 CAPABILITY Wide range of well embedded technical skills and capabilities across team 54% 47% 79%
4 STAKEHOLDERS CatMan well aligned with related business processes (e.g. NPD, budgeting, marketing strategy) 31% 24% 56%
5 STAKEHOLDERS Business stakeholders have formal objectives for CatMan 21% 15% 40%
6 VALUE Maximised use of wide range of value levers in category strategies 50% 43% 74%
7 CAPABILITY Wide range of well embedded behavioural skills and capabilities across team 49% 43% 72%
8 STAKEHOLDERS Business stakeholders have excellent understanding of CatMan as a result of communications 11% 3% 42%
9 LEADERSHIP Category strategies get refreshed with appropriate frequency 35% 25% 73%
10 LEADERSHIP Category managers have formal objectives for CatMan 62% 55% 86%
11 LEADERSHIP Procurement resources well balanced across categories managed 34% 27% 59%
12 LEADERSHIP Central team leading programme fully resourced to meet needs of category teams 43% 36% 67%
13 LEADERSHIP Category managers have sufficient work time for CatMan activities 27% 21% 48%
14 CAPABILITY Well-structured competency framework used detailing CatMan specific skills 38% 27% 79%
15 PROCESS CatMan approach is flexible and applicable to all spend and category projects 60% 54% 81%
16 CAPABILITY CatMan good practices shared across organisation 45% 35% 79%
17 PROCESS Some activities and outputs in approach to creating category strategies are mandatory 51% 42% 84%
18 STAKEHOLDERS Annual plan of CatMan projects jointly agreed with relevant business stakeholders 39% 31% 66%
19 PROCESS CatMan approach is "one way of working" for all procurement activity 39% 32% 65%
20 CAPABILITY Real category projects identified to provide targeted learning experiences for category managers 46% 40% 67%
21 CAPABILITY Procurement line managers support category managers with expert coaching 47% 38% 77%
22 CAPABILITY CatMan classroom training for the procurement team is rated by participants as excellent 31% 25% 51%
23 CAPABILITY Measure impact on procurement performance from investments in learning and development 21% 16% 38%
AVERAGE 39% 32% 66%

© Copyright 2019, Future Purchasing Consulting Limited, All Rights Reserved. 5 2019 FP Global Category Management Report
Preview
 Preview
Closing the performance gap
4 ways that Future Purchasing can help you immediately

Understand the strength of your Voice of the Stakeholder evaluations let

category strategies by undertaking a you know how much support you really
Category Strategy Appraisal now have for Category Management
The quality of your category strategies is a Stakeholder support and understanding is vital
critical indicator of the success you will have in for developing excellent category strategies, and
delivering value. Future Purchasing’s well delivering the value identified. Take the FP Voice
established Category Strategy Appraisal will of the Stakeholder evaluation now to give a
give you both a clear statement of where your complete view of where you are and how to
strategies are, and what to do to improve them. improve using the net promoter score method.

Upgrade and extend your category value Understand where you are on the
delivery approaches by introducing an Category management journey to
innovative value lever framework today maximise your value delivery
Delivering the full value available requires a Contact us to run a Category Management
deep understanding of where value could come Instant Assessment to build a really clear
from. Run the Future Purchasing Value Lever picture of where you are, and where you need
Workshop to explore which levers you currently to get to. Based on our well established
use, and which you could adopt in the future. diagnostic process, we can build a rapid picture
Immediate insight and payback is delivered. and identify strengths, gaps and priorities.

call us: +44 (0)1483 243520 contact us now

Future Purchasing Consulting Ltd enquiries@futurepurchasing.com Henley Business School reception@henley.ac.uk

Building 2 www.futurepurchasing.com Greenlands, Henley-on-Thames www.henley.ac.uk
UNIVERSITY OF READING
Guildford Business Park +44 (0)1483 243520 RG9 3AU +44 (0) 1491 571454
Guildford, Surrey GU2 8XH

© Copyright 2019, Future Purchasing Consulting Limited, All Rights Reserved.

The ‘FP’ Roundel, ‘Future Purchasing’, ‘Ambition>Shape>Deliver’ and ‘Track8’ are all trademarks of Future Purchasing Consulting Limited.