Future Purchasing on Category Management – Is It Rocket Science?

There’s a very good article on the Future Purchasing website from Allison Ford-Langstaff, who is one of the leaders at the consulting and training firm. Future Purchasing is known for expertise in category management in particular, and the article is  titled 10 Reasons Why Category Management Is Not Just ‘Common Sense’ Hint: It is ‘Rocket Science’

In it, she takes issue with those who say things like “well, of course category management is just common sense, really”.  Having looked up the term in the dictionary, she says:

“…they are in effect saying that Category Management is simply about applying good sense and sound judgment in the practical application of the process to yield the result. I couldn’t disagree more”.

Category Management, as defined by Future Purchasing is “the strategic end to end process for buying goods and services that aligns business goals and requirements with supply market capability”. As Ford-Langstaff says, it “has the ability to transform the long-term value achieved from an organisation’s supplier spend and drives reduced cost, reduced risk, improved revenue, improved service and ultimately better business performance”.

But to apply it properly, she argues, requires a lot more than simple “common sense”. At the heart of successful CatMan lies collaboration – that is both internal collaboration across business functions (the stakeholder dimension which we all know is so important) plus external collaboration across suppliers and supply markets. That collaboration separates those who truly operate a CatMan approach from those who might follow some principles and maybe apply some tools – but don’t have that real engagement.

“Put another way, any strategy created by a procurement professional alone, with occasional input and testing with a stakeholder is not a category management strategy.  Category Management necessarily involves core cross functional teams working as equals towards a common objective …”

She is scathing about those organisations that follow a “tick-box” approach so they can claim to “do” category management, and points out that apart from any other characteristics, the successful category manager must be able to manage those complex collaborative activities – which requires skills that go well beyond common sense.

We would add one other thought. In our experience, those organisations that say “we’ve moved beyond category management” are usually in effect indicating that it wasn’t done properly. Their explanation is often that the internal stakeholders weren’t happy with a “centralised” procurement approach and didn’t feel that the category strategies reflected their needs. Fair enough, but that would seem to just validate Ford-Langstaff’s point, that the collaboration between procurement and the business was not strong or thoughtful enough. Of course any category approach must meet the business needs.

We’ll come back and look at what else she has to say about skills in part 2, but do take a take a look at the whole article here. And remember we have a workshop (with Comensura) on the morning of June 14th where we will look at some of these issues in more depth, and comment on how stakeholders and organisational culture need to be taken into account in developing CatMan approaches. It’s free of charge and you can register here.

And finally, on the subject of rocket science, I once did some consulting in an organisation that was linked to the military world, let’s say. I made the mistake of saying in a presentation “of course it isn’t rocket science”, and one procurement officer put his hand up and said “er, actually it is …”. His responsibilities included a category that was defined in the spend analysis as “explosives, ammunition, demolition and detonation”. Rocket science, you might say!

 

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