Improve Procurement Effectiveness
category management
Harnessing the Potential of Category Management
optimizing procurement
Category Management is one of the most overlooked areas of procurement. Only a small percentage of companies fully leverage category management principals to advance their procurement process and improve the organization’s bottom line.
Overview and Benefits
what is it?
Category Management is a strategic approach to procurement that involves segmenting a company’s spend into related or similar groups in order to drive value based on that segmentation
benefits
One of the main benefits of category management is spend visibility. Once your spend is divided into categories it’s easy to see where your biggest opportunities are. Management of Spend, Suppliers, and Contracts at the category level enables you to align your sourcing goals with the priorities and objectives of the organization and deliver long term value.
5 Basic Steps
the process:
Our Services
what we do
cost management
Implement cost management tools for savings initiatives, workshops, payment terms, business reviews, supply agreements, TCS review process, price increase push-back
supplier rationalization
Perform RFI/RFQ quoting process, NDA, sustainability audit, code of conduct (CoC) questionnaire, financial review (FSA), sourcing board process. (Performance)
market analysis
Conduct market analysis to include commodity price trends, general economic trends, potential supplier pooling, Kraljic matrix, finalize sourcing plan.
category management
Develop category plan for specific crucial products and materials, followed by a category strategy with key sourcing objectives that align with organizational goals.
negotiations
Conduct Total cost to serve (TCS) review, Should Cost model, supplier visit process, sourcing board price comparison (SBPC), quality audit (SQA)
supplier innovation
Drive supplier savings via collaborative workshops with suppliers (i.e. VA/VE, Innovation Workshops on materials and processes), utilize E-Savings tools for reporting.
Quality Process
Implement quality tools such as Quality Audits, Claims Process, DPPM KPIs, COPQ KPIs, SCAR/8D process, and more.
compliance programs
Develop requirements to key suppliers for sustainability audits, SBT initiatives, code of conduct requirements, business ethics, labor/human rights, environmental, and health/safety standards.