Category Management enabled procurement transformation: designed and implemented for Pharmaceutical Sector

Case study

Category Management enabled procurement transformation for Pharmaceutical Sector

By Future Purchasing |



Areas of Expertise




Business situation

Facing challenges such as a dwindling product pipeline and escalating costs, a leading global pharmaceutical company with a focus on neuroscience brain disorders recognised the need for a radical transformation in its procurement operations. The absence of a uniform sourcing process and the limited involvement and control of the procurement team across various spend areas had relegated them to mere “order raisers” or contract administrators, rather than strategic partners in the organisation.

In response, the company appointed a visionary new Chief Procurement Officer (CPO) tasked with a clear mission to elevate Procurement from a transactional function to a strategic pillar within the company. This ambitious transformation was to be fuelled by the initiation of a ‘quick-wins’ savings program, aiming not only to generate immediate financial benefits but also to lay the groundwork for long-term operational excellence..

Solution implemented

In collaboration with the newly appointed CPO, Future Purchasing embarked on crafting a comprehensive procurement strategy aimed at revolutionising the company’s approach to procurement. The strategy set ambitious objectives, including expanding the scope of spend to be covered by category strategies, achieving annual savings targets of over 10%, and significantly enhancing the skill set of the procurement team to meet these challenges head-on. To kickstart this transformation, a detailed 100-day plan was developed that redefined procurement’s role within the organisation as a strategic and value-driven function.

1. Quick wins savings programme

A quick-wins savings programme was set up to generate funds to invest in the procurement transformation journey. A joint Future Purchasing/customer team was set up to identify a pipeline of potential cost opportunities with a 12% cost down target to be completed in 8 weeks. The scope was limited to targeted supplier negotiations and there were four steps:

2. New category management process & toolkit designed.

Programme design

Programme plan created with agreed deliverables around the new category management process. Procurement Leadership Team (PLT) diagnostic questionnaire issued to establish current views on how best to implement category management. Results shared with the PLT to facilitate successful implementation.

Process design

A client design team was set up with Future Purchasing to co-develop a new “fit-for-purpose” category management process focused on value levers, strategy creation and a sensible modulation of activity as a “one size fit all” approach would not work. Focus was on selecting which tools and templates to use for different size and complexity of project. Final approved process & toolkit were made available to the category teams.

3. Category management training and coaching.

Education & training

Future Purchasing designed a customised workshop training plan with a balance between soft and hard skills training. The category management training workshops were interactively run for approximately 40 people with an outstanding feedback rating of 97%.

Coaching support

Coaching support: Category management coaching was provided for individual sub-category projects where each session was 1.5 hours every 2 weeks. CM coaching clinics were also set up for small groups of 3-4 focusing on specific tools e.g. business requirements, negotiation, creativity & options generation. This created a learning environment for category managers to discuss and share their experiences and improve their understanding of how to make the process work better.

Category Management training and coaching process

Category Management enabled procurement transformation: designed and implemented for Pharmaceutical Sector

Transformation Outcomes

The transformative category management program spearheaded by the new CPO and Future Purchasing culminated in delivering remarkable savings of 11% reduction over a 12-month period. This initiative not only introduced category management as a fundamental practice within the business but also profoundly embedded it into the organisational ethos. As a direct result, the procurement team underwent significant upskilling in category management, which in turn fostered enhanced relationships with stakeholders across the business. Procurement transformed itself from a functional necessity to a strategic partner, now perceived as a positive force for change and innovation within the company.

Significant category savings projects included:

savings on telecoms category via a competitive tendering process.

savings in lab consumables by 50% reduction in suppliers with a much-improved level of service provided to the end users.

savings by consolidating lab service contracts through three main suppliers instead of 120 suppliers previously.

cost savings by changing the Canteen provider together with improved service guarantees.

cost saving in recruitment services with improved frame agreements with preferred suppliers.

Related Expertise

Supplier management

Our supplier management approach combines excellent tools and techniques across the full range of activity, from segmentation, through performance measurement and improvement and through to relationship strategy development.

Category management

Excellence in Category Management gives multipliers of value delivery compared to less effective programs. Our approach, delivers a high performing team and process which provides sustainable value over years rather than months.

negotiating for procurement

Our approach to procurement negotiation helps teams to improve performance, track their progress, measure success and secure rapid payback to programme costs. It is based on four principles…

Future Purchasing

If you want to get more value out of your procurement spend, or you just want to know more about us, request a callback above or send us an email and we will come straight back to you.