Categorically speaking
Category management. The very words may well divide the readership. It’s a subject which elicits strong views – both with regards to its definition and whether it is a method which should be employed at all.
When SM published a feature last autumn we posed the question: ‘Is category management dead?’ (Plugged-in procurement, 16 September 2010). We got a number of strongly worded letters arguing the contrary and one supply chain director told me it had divided his firm. Buyers in the UK take one approach, he said, while a team on the continent felt the article vindicated theirs. And for yet further evidence, a column in the latest issue of sister publication CPO Agenda by the head of a Fortune 500 company advises us to “get off this drug”. He argues category management is a process, “not the answer to world hunger”.
Fear not, we haven’t mistaken it for that. What it is, however, is an extremely strong tool. Spending time concentrating on a particular category area enables buyers to get involved with deals early, get close to internal stakeholders and really make a difference. It is not a new idea but it is an approach used by organisations across the globe – many of which are still only grappling with it.
Elsewhere in the latest issue, SAB commercial director Ian Russell describes it as one of three elements that comprise a powerful procurement team. As such, commodity expertise will be one thing (together with commercial flair and knowledge of the business) that he will be looking for in his new team.
And here we’ve reached a debate within the debate: if you go down the cat-man route, what makes a good one? Market expertise? Traditional buying know-how transferable to any field? Relationship skills? We find out here.
Finally, this is the last fortnightly issue of Supply Management. We will return in a month with a bigger, better new-look magazine.
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Is it just me or are we in danger of over-analysing things here ? Surely the spend management approach that will work the best is a) whatever most appropriately underpins the way an organisation goes to market and delivers value to its customers and b) whatever maximises its cost efficiency. If a category management approach works best within an organisation then fine. If a more general buying approach works best then also fine. In terms of required skillsets then I would have thought the most important requirement is for procurement professionals to be business savvy enough to tune into the overarching needs of their organisation and act accordingly.
I agree with Paul on this one. The approach to market will surely depend upon the specific needs of the organisation, and where the bulk of its supply expenditure lies. A competent procurement professional should readily be able to develop a “fit for purpose” approach to supplier management. Category management is fine in its proper place, but it is not a panacea for effective procurement.
Over-Analysing seems to be a recurring problem e.g EU Directives, Corporate Social Responsibility, Ethics have all been examined under the microscope at various times. Perhaps common sense is a good approach to take.
Horses for courses. There’s nothing wrong with using CatMan either exclusively or as a mix with other as-required buying approaches. Look at your mix of Requirements and supply base and decide what will work, and ditch dogma. Come up with a fit for purpose solution that is appropriate and proportionate.