To add benefit to an organisation the use of Category Management reduces the cost of buying goods and services, reduces the risk in the supply chain, increases overall value from the supply base and gains access to more innovation from various suppliers.
Category Management is a strategic approach that focuses on the vast majority of organisational spend. The results can be significantly greater than traditional transactional-based purchasing negotiations if applied effectively throughout the entire organisation.
Odesma consider Category Management as an essential strategic purchasing approach which can be applied to any organisation. It is a cross-functional business process, performed with internal stakeholders (users of the category) and other constituents within the business (influencers of the category’s specification, performance and quantity).
Category Management Process
Category Management can be executed in five phases:
3Category strategy creation
4Category strategy implementation
The overall process remains the same regardless of the category being managed. Category management is not a one off initiative it is a continuous process and is run on each category. Once the process for one specific category is completed it must be evaluated and analysed. The lessons learned will allow adapting the category strategy to changes in the supply market or changes in stakeholders needs.