Category Management – A Different Mindset vs Traditional Thinking

We mentioned here the most recent in the current series of the BravoSolution Real World Sourcing sessions, led by my colleague Guy Allen. It was titled Category Management – A Fresh View.  The slides are now available from the session and you can get hold of them here (free on registration). You can also take the “quiz,” even if you did not come to the session, and then you will stand a chance of winning the Bravo Solution Scholarship worth £2500. You have to actually attend three of the six sessions in 2015 to be eligible for that, however, and complete all the six quizzes.

Guy talked about some of the risks to the continued success of category management. For instance, the need for organisations to move faster, to innovate, to develop new products and get them to market faster puts pressure on procurement also to move faster. So in many cases, we simply don’t have time to spend months developing a “category strategy,” run lengthy tender processes and so on.

I’ve certainly seen some evidence recently of  procurement functions in large organisations moving away somewhat from a category management based structuring of the function to something that places a higher emphasis on procurement being close to the internal stakeholder, for just those reasons. Procurement also has to engage with suppliers more flexibly if pace and innovation are the main drivers.  Indeed, one of Guy’s final thoughts was “where securing the latest innovation is key, Category Management may not be the best approach.”

Guy also highlighted that marketplace consolidation, often through mergers and acquisitions, has made it harder to deliver value through CatMan processes that rely on competition. As he said: “less competitive markets will force greater collaboration with the market place and better alignment of your requirements to what is available” – so perhaps a more subtle approach based around supplier relationship management rather than competition is needed?

There is also the relationship between category management and “market informed sourcing” (MIS) as we call it – advanced sourcing technology and processes. Now this is not so much a case of MIS supplanting CatMan, rather it is about using it within a CatMan structure. But MIS is a whole different way of approaching the market compared to traditional procurement and tendering processes, so taking advantage of it does require a different mindset again compared to the traditional CatMan thinking.

Anyway, there is much food for thought in the presentation, so do take a look here. And you can book for the remaining four sessions this year here.

Voices (2)

  1. Dan:

    Surely a decent category strategy will consider the needs of the business and stakeholders and be aligned accordingly? Or am I just hopelessly naive?

    1. Bitter and twisted:

      Being an unCIPS simpleton i dont understand what a “category” actually is, or rather, should be.

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