As the Future Purchasing category management report consistently testifies, more and more procurement leaders are putting category management at the heart of a modern, transformational business strategy.
Simon Mays is Transformation Director at Britvic Soft Drinks Limited. He explains how category management came to be the top priority for procurement at Britvic.
“You could say we came from a zero base,” he said, “because we had limited category management in place until a couple of years ago — and now it’s a number-one priority for procurement.
“We ran a series of training programmes several years ago to sew the seed of category management, and this put us in good stead for adoption, but category management wasn’t top of the agenda at the time. It wasn’t until we did the initial scoping for the business case for our procurement transformation programme that we established category management as a key process that was missing.
“In our opinion a good category management approach is pretty fundamental to achieving a function and a team that’s fit for the future — so we knew this was a priority for us. The team was at mixed levels of maturity in terms of training, and the direct and indirect teams were largely operating independently. So investing in that became a priority in order to shift the balance between buyers working on more strategic projects and working on lots of smaller, more tactical, ones.”
Category management has led to good governance
The team had traditionally worked on a 12-month budget cycle, but an annual cycle of discussions meant that by the time they implemented them, it was almost time to start again.
“This meant,” explained Simon, “that each year you are diminishing your ability to change the thinking of the business and make some breakthrough benefits. Using a category management approach was an ideal way to get buyers to develop a three-year plan while implementing a structured technique. This also filled other procurement process gaps such as governance and led to the creation of category and project boards. In essence we turned digital.
“We developed a five-step process with built-in ‘gates’ that formed our governance process. The newly created ‘category board’ and the procurement exec team sign off category strategies in a controlled and structured way. The new process of involving other stakeholders means the efforts of those developing the strategies are recognised and provides opportunities for others who might not fully understand the category to critique the strategy. It’s always beneficial to have outside-in influence — hence the creation of our category board.
From category creation flows the downstream projects.
“Prior to our category management implementation these projects would have had no check against the suppliers being onboarded, nor any challenge to the negotiation strategy being used. So we introduced another step in our strategy by creating a ‘project board.’ This board questions, for example, the auction technique to be used and the category manager considers the options and outcomes from that recommendation. In doing this we have inserted governance from upstream right down to where we make the supplier award.
“Essentially we’ve honed three very important processes: category sign off, negotiation strategy sign off and supplier award sign off — none of which existed before.”
How technology helps
The team introduced an end-to-end spend management solution to help streamline and structure their processes, generate workflows and involve the right people at the right time during the upstream and downstream process. To accompany that they use a strategy-creation tool that sits atop that system to give them full-rounded support, including functionality that allows functions outside of procurement to be involved in developing category strategies. So there’s early involvement in strategies that are not just procurement-led.
“On top of this, a guided-strategy approach helped us energise the team,” said Simon. “Implementing a category management approach required standardising processes as much as possible, but with different skill sets throughout the team we realised we had to retrain, refresh and get 30-plus people to the same skill level.
Bringing technology on board made it more interesting and helped us focus on the key parts of category management that were really going to drive the most benefit. A guided-strategy approach helped us understand the business requirements before going into a project, which was missing before, bringing structure and guiding us to the priorities rather than the whole range of catman tools. We now have a fully auditable and complete workflow cycle that’s brought real visibility: we’ve ditched PowerPoint and Excel and have no varying formats sitting on different laptops, which gives us a higher degree of governance.”
Category management has brought procurement into the conversation
It’s very important for category management strategy to have cross-functional support and engagement from the people working outside of procurement, and in Britvic’s case this led to the procurement voice being heard at senior-level discussions.
“Being a business whose budget discussions focus on materials such as glass, resin, aluminium etc., it wasn’t unusual for procurement’s voice to be absent from that table — it worked rather in isolation,” explained Simon.
“But that’s changing with category management,” he said, “more recognition and a lot more engagement with procurement …through our transformation efforts are making procurement a bit harder to ignore. It helps that we are much more proactive with our communications now and are driving category managers to engage with the business much earlier on.
“We have a cross-functional steering team and have created a procurement council with senior members from supply chain, finance, HR and category management teams. This means updates, progress, procurement strategies, direction and market trends can all be shared and discussed. We have a high-level stakeholder interface to help drive change and an interface with people from the business to do the same there.”
So it’s good to have strong support from the business stakeholders, but in order to get that you must learn to speak the businesses’ language.
“There’s a danger,” he said, “that when we talk about category management we, as procurement professionals, expect everyone else to know what it means. So for example, when building the business case for our spend management platform, part of my role was to engage IT and communicate the benefits it could bring, like project pipelines and hard cash savings, and to understand why we need tech to achieve that. Now that’s hard enough to do, but when you are also selling a guided strategy-creation tool, that’s even harder. The trick is to speak in ‘business plan’ language and not in ‘procurement’ language. And as we’ve started to share category strategies with individuals across the board, it has helped gain a better appreciation that there is a structure and science behind the projects and pipelines we need to produce.”
Measuring category management success
Like many large corporations, the Britvic business strategy 2025 has three top-line objectives: people, planet and performance.
“Using these company guidelines,” said Simon, “we have created our own ‘House of Objectives.’ Among them is the huge area of sustainability, and the progress we are making in that area is fantastic, in fact we have a category management team dedicated to it.
“Our high-level measure for the upstream sourcing process centres on six KPIs. Considering we introduced category management only 8 months ago from a zero base, our progress has been excellent, and the digital approach has undoubtedly helped speed the process We now have around 25% of spend covered by category strategy with an end goal of 85% next year.
“We also have KPIs for the downstream process for the likes of POs and no-touch invoicing. All KPIs are linked to our objectives and we have a Centre of Excellence responsible for measuring them.
“So all in all we have a successful category management approach that is progressing and maturing all the time. But the key is: you need good leadership to make it work and sell it to the wider business. Anyone can develop a process and make people follow it, but you have to generate appetite and motivation around it, and it’s down to the leadership team to get this into people’s objectives. So for us, category management is not a choice, it’s something you know is beneficial to do.”
Matt Swindall, Chief Procurement Officer commented “We are transforming Procurement through our people, better process and technology. By embedding Category Management we are delivering value across a broad range of metrics and building credibility as we lead in contributing to Britvic’s goals and objectives. By investing in our team we help them grow, become more effective and build engagement and recognition.”
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