Category Management is considered by many a vital approach when it comes to strategic purchasing. It is a tactic which organizes various Procurement resources in order to focus on specific spend categories. Such focus allows managers to analyze their market with a close eye, making decisions with the entire organization's needs and capabilities in mind. Proper application can bring your organization cost reduction in the buying process, risk reduction across the supply chain, and enhanced value from the supply base. Its focus falls on the majority of your organization’s spend, but must be implemented throughout your entire company as a whole- not just in the “main sectors.” 

Every area must be on the same page and have the same goals in order to generate an accurate overall target and forecast. Once the goal is in place, both external suppliers and internal resources must be brought into the process. You need to identify suppliers that can cater to your needs and develop internal resources to be able to facilitate the tasks and objectives. The various sectors also need to have the ability to work with one another, which can help speed up the adoption and implementation of new products, technologies, strategies and services. 

Category Management is not a one-size-fits-all system, nor is it a one-and-done process. 

It is a continuous initiative that requires frequent evaluations and adjustments relative to the needs of the specific category. Typical categories handled in the management process include areas such as Marketing, Finance, Human ResourcesFleet, Freight, MRO, Facilities Management and Maintenance, and IT and Telecom, but this is, of course, relative to the organization. While the same overall makeup and steps of the process are applied to every category, specifications must be made to tailor it to each subject. This particularly becomes the case when you are dealing with various customers and clients; a clothing retailer is not going to have the same MRO needs as an industrial organization. Additionally, in order to succeed, it’s important to stay on top; you need to keep an eye out for competitors’ innovations and other trends within your industry, adapting as needed. 

Implementing new strategies, technologies, and tactics every so often, and doing so throughout every sector of your organization, is key in order to utilize Category Management techniques to your greatest ability. 

For more support with managing your spend categories, contact Source One's Category Management Experts.
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Katherine McVeagh

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