Category Management can be the right approach for any procurement organisation – regardless of sector. So the findings in this infographic, part of a fuller, more indepth report, will be of value to anyone involved in sourcing.
In Future Purchasing’s annual survey and report on the status and level of category management implementation in organisations globally, the firm defines two types of category management expert: Leaders and Followers. Leaders have a category managment approach that is either embedded or optimised: fully standardised category strategy and implementation, with toolkits and training. Followers have a basic or improving level of category strategy implementation, with limited or inconsisten toolkits and training. The terms are used to segment levels of maturity in order to analyse all survey responses and separate out the results. This approach has enabled insigth into whether the practices and outcomes of the ‘Leaders’ are substantially different from those of the ‘Followers.’

The results confirm that only 28% of organisations categorise themselves as Leaders and 72% as Followers. In an age where it is widely accepted that a category management approach to sourcing has great potential to deliver value beyond traditional methods, through greater alignment with stakeholder requirements and creating long-term strategies for managing spend, the results are somewhat surprising. However, the analysis does show that category management remains a top 3 priority for the majority of procurement teams.

The report dentifies the priority practices that make the biggest difference to category management success, and shows the extent to which they are used and the additional value secured through that use. So it is a very worthwhile (if not essential) read for anyone involved in category management who wants to understand how they can (and why they should) take their own approach and process to the next level. It also makes practical recommendations to help organisations execute each of the top practices to transform their category management capability.

We don’t want to give too much away here, as the report contains a wealth of facts to help make the business case for any category management transformation. But you will discover that Leaders who fulfil their potential in terms of impact of savings rates and strategy spend coverage, will boost their current savings performance by 83% and Followers have the potential to see a mammoth 400% improvement.

The impact of executing category management well is summarised in the following infographic. And if you want to learn even more, request a download of the full report here.

There is also a recording of a webinar we at Spend Matters Europe did recently with Future Purchasing available for listening via this link – titled “Collaborating for Category Management Success – Bridging the Performance and Value Gap”.  

 

 

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