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Category Management New Year Resolutions

By Future Purchasing |

“It’s not too late to resolve that 2018 will be a game changer”

I’m going to be better at Category Management in 2018 and here are the five areas I’m going to concentrate on to do that.

1.  I will prioritise and have my own plan

Having enough time to think is always a challenge, and there seems to be a constant stream of projects coming at me from all angles that I have enough to keep me busy all week and more.  But these are reactive projects, where the solutions are often fairly well defined before I get them.  I realise that to influence people to work on projects I think would be more worthwhile to the business I need to have done my homework and have a plan too.

This I will do by following a structured category group planning process whereby I shall review my entire category portfolio and sub-categorise it into sensible areas. I will then review the historic and forecast spend profile, the supply market dynamics and key suppliers and hold exploratory conversations with key budget holders and stakeholders about their own strategies. This I will do, so I can highlight some early ideas to achieve more value and prioritise potential projects based on return on investment, ease of implementation and supply market difficulty to have my own idea of where I think I should be spending my time on behalf of the business.

2. I’ll engage more proactively with my stakeholders

It is very difficult to manage all my stakeholders as I have so many of them. I need to realise that I can’t be talking to everyone about something meaningful all of the time and holding meetings for meetings sake does not mean I am managing my stakeholders.

Building on my plan I will focus on those areas where I believe I should prioritise my time and allow the rest to come to me when they need me.  For those priority areas I will list all my stakeholders – not just the senior ones – but think through that ‘squidgy layer’ of middle managers that are actually making the decisions as those are the ones I probably need to work with closely.  I will highlight those individuals who are the key decision makers for my prioritised sub-categories as my key stakeholders.

Once I have highlighted my key stakeholders I will go and talk to them about what they are looking to achieve – taking care that I don’t ask them about what they want to achieve with suppliers – I need to ask them what they need to do in their roles to achieve the business goals.  I can then start to frame ideas with them about how we might reshape the supplier base to fit their goals better.

3. I will create a proper cross functional ‘core’ team to achieve my CatMan goal

I recognize that any category strategy that has largely been created by me, carried and implemented by me with minimal stakeholder input is not category management but simply sourcing in one way or another. Category Management is about business-wide collaboration to accurately test, challenge and realise the true business requirements and it’s also about using the power of the team to review all the variable data gathered to get creative and bounce new and ‘silly’ ideas of each other to come up with powerful new strategies and approaches based on our different perspectives.

I will make my business case based on my plan, and my proactive engagement with my key stakeholders, and target a senior level sponsor to help me achieve the goal. I will be clear about what resource I think I would need from his/her team and other teams to work actively with me on the project and obtain their advice on how to go about this. I will then not be afraid to arrange an initial briefing call, and then organize and facilitate a proper Kick Off meeting (1/2 day to 1 day) to demonstrate this is a formal, important piece of work and different from day to day reactive sourcing.

4. I will highlight opportunities that go beyond Price

I know that if all I ever do is simply negotiate hard with current suppliers, consolidate volume and leverage the market that I will never optimize the potential from the category, as those outcomes will most usually centre on achieving some form of price down, and often result in something relatively short term.

I know that the more sustainable business gains will come from optimising the specification or managing the demand differently or analysing the supply chain and cost model to look for areas of wasted non-value-added effort or wasted cost. These kinds of activities need me to have the technical stakeholders in my core team who with my guidance will work with me to actively challenge long held views. This kind of activity will result in lower costs throughout the supply chain – and in some cases, may even remove a cost for ever.

Additionally, I will work with my core team – and current and prospective suppliers – to explore for new ideas that might create new revenue opportunities for the business or manage risk more securely.  I will try to keep an open mind and encourage the core team to do so as well.

I will commit that none of my category strategies will only have a standard price ‘supplier attack’ or ‘go to market’ strategy – there will also be other activities that will result in a longer-term change in either the cost, revenue or risk profile of my category (or all of the above.)

5. I will shout about the core team success and create excitement for more category management projects

When we have completed our strategy and highlighted fantastic returns via a new creative range of approaches that will more than double the standard returns we were previously achieving, I will explore with the core team how we can socialize what we have found internally and gain interest and support for the successful and accelerated implementation of the findings.

Whilst I will be clear that this initiative was guided by the procurement function following a category management approach I will make it clear that there is no ‘I’ in team, and I will always refer to the success as ‘our’ success. This will make it clear to my procurement colleagues and the business that optimal procurement competence is a business-wide competence guided by procurement professionals – maximum results cannot be achieved by one individual or function alone.

If I focus on these 5 areas, I’ll get more results from my category management approach and deliver more value for the business.

To find out more about how you and your team can move beyond traditional sourcing approaches, achieve more recognition from the wider business and double your potential returns, please do get in touch.  Or take a look at our website for more information on strategic alignment or category management.

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