Category Management: What are the Things People Should Know
The term category management is mainly utilized by people who are specializing in the procurement department since it is an approach that pairs up similar items together or in other instances, items that are the same in terms of their characteristics or that they are sourced from the same market supply. The result of category management is the creation of different kinds of categories that are then merged in one chain of value that is managed through the objective of maintaining the cost of spending, making the service more efficient and making more innovations. So here are the tips that are included in the top ten list for the category management programme that is surely going to kickstart the company.
Firstly, is the process of obtaining a mandate for senior management. There are lots of organizations these days that have their own approaches and methods when it comes to category management and this will highly be likely different when it comes to the approaches that these companies make. Senior management mandates are always an important aspect when it comes to the approaches that organizations are doing since there will be a lot of barriers and challenges that will come in its way and the mandate of senior management will surely help in directing the change that the initiative has done in terms of the approach. Secondly, is for an organization to develop something that is helpful to them like a scope. There is always a starting point for every organization out there that is catering to category management since they will need this starting point to figure out the current expenses that they are spending so that they can see clearly what they need to change.
It is very important for an organization to create a certain type of database which can be of great help to them like a spend cube which will help the organization categorize and decide what they should allocate to their program first.
It is very important for an organization to know that they should never copy or reproduce the contracts that they have done or have at their disposal during the past. Instead, it is better for an organization to scrap the reproduction of such past contracts but aim more into combining different sub-categories in their program for a better outcome. The third thing that organizations need to take note of is that they should always create a flow of process that can be beneficial for them because without a process, there will never be a good outcome to the category management program that they have since it always requires a process.