Authored by Fayaz Haq
Now for the final part in our series of posts on Category Management, yesterday we looked at the benefits of Category Management and the effects it has on your organization, and finally we center on how to ensure a successful program when implementing a Category Management approach.
Over the last decade and a half or so, there has been a natural evolution from purchasing to procurement to sourcing and now on to strategic category management. Hence, organizations cannot view Category Management as simply a procurement led initiative and just one of the many initiatives within the business as then, the resources required will likely be unavailable. However, if the organization views Category Management as a primary company-wide and collaborative initiative making it ‘the way we work/buy,’ and thereby adding dramatic value across the business coordinated by the Procurement function, it will lend to its success.
Management in procurement organizations must also be able to recognize and accept that in some cases, in-house skills gaps may exist that must first need to be bridged. Category Managers draw on a set of skills that are rarely found together- from Strategy formation, supplier and business partner relationship management, change management, planning and subject matter expertise. And in response to this, management must be committed to investing in skills development and training required. Once skills are bridged or acquired, simple tools like the Ardent Partners Category Sourcing Scorecard serve as a way to lay the foundation and pave the road to success.
Using a pilot to launch the program with an engaged business partner is preferable to that of a big bang approach as it puts you in an ideal position for a more convincing and objective sell internally, when benefits are being realized. Key to strategically approaching the marketing aspect of the program is to identify all benefits derived (to the organization, your business partners, suppliers, the procurement function, etc.) so as to provide a solid business case to your business partners when pursuing other strategic categories on your prioritized list.
In conclusion, remember that the processes, procedures and policies in place that define the category management program will not ensure effective implementation. The key component for category management to be successful will be dependent on collaboration with the business partners and suppliers.