Category Management is a strategic approach by which organizations segregate their spends in different segments. This allows the organizations to focus their resources and efforts on different segments to control spends across the organization. The can result in significant savings and better spend control, which are difficult to achieve in a traditional procurement process. Category Management helps to achieve substantial business improvements across the entire supply chain.
Category Management is a structured approach to the procurement of goods and services.
- End-to-end buying process for goods and service.
- Streamlines business objectives with respect to customer requirements and market conditions.
- Provides long term benefits to the organization.
Why Category management is required
- To Manage changing business environment
- Supplier Consolidation
- Leverage Volume Procurement
- Manage internal resources to reduce supply chain risks
- Improve quality and service levels
Advise, perform or manage following
- Define the categories and sub-categories
- Prepare category management strategy
- Review list of items
- Assist in Data Cleansing
- Classify items to various sub-categories
- Grouping of items with similar nature/ application
- Identification of duplicates, similar or alternate items
- Demand analysis
- Category wise spend analysis
- Internal Compliance
- Supplier Compliance
- Periodic analysis and review
Benefits to organizations
- Improved procurement process across the organization
- Better supplier management
- Improved spend visibility
- Shorter supplier lead times
- Better Inventory management
- Consolidation results in substantial savings
- Results in improvements in service levels, quality, availability and value for money
- Addresses and reduces risk in the supply chain
- Very effective use of resources
- Improves Return on Investment