It’s Time to Move Beyond Strategic Sourcing

1. How to Get Started and Maintain an Effective Category Management Function Having an effective category management scheme can give rise to some major benefits for any organization. Not only does it result in significant gains but also reduces the risks involved and also helps identify other sources of value. Category management helps with sourcing more efficiently and then bring more value to the table by optimizing contracts. All this can be achieved by sourcing similar products that come from similar supply markets as well. However, to maintain an effective category management, a certain process needs to be followed. To create the best category management plan, an organization needs to first understand the market and invest in resources accordingly. This can be achieved by accessing the supply chain, identifying opportunities, and making informed decisions based on facts. An organization needs to access the supply market thoroughly and consider the various supplier options and evaluate their performance. To be successful, one needs to devise an effective category management plan that would work best in the interest of the organization. Let us now have a look at how to get started with category management. How to get started? To have an amazing category management service, one needs to start from the basics. The most effective way to go about this is through an effective training and development program. The most effective way to train anyone is to increase the overall interaction of the end-user. By using gamification, seminars, webinars, etc, the overall interaction of the end-user increases drastically, thus making it an effective training strategy. Through training, employees would be equipped with more knowledge about the market and will be capable of analyzing it better. This would hence assist with increasing the overall profit of the organization. The process of creating a category management scheme takes place in five phases. In the initiation phase, an effective communication plan is drafted. After the initiation phase, a complete analysis of the market is done, which includes the cost breakdown of various components. This phase is called the analysis phase. Once the analysis of the market is complete, a category management strategy is devised. This is done to maximize the company’s profits. Once the category strategy has been created, it is implemented in the real world. The process of category management creation does not end here. As the markets change from time to time, the category management plan also changes to adapt to the variable conditions. This helps to generate profits regularly.

2. Advantages of Category Management: 1- Better performance of supplier: By making use of category management services, a company can work closely with suppliers. This would speed up the whole process of adoption from the initiation to the implementation phase. 2- Better visibility on spending: A category management helps a company understand the various sources of expenses that it would have to bear. This can then be analyzed and eventually used in order to reduce the overall expense that a company would incur. 3- Client satisfaction: Category management also increase client satisfaction. Since a category management strategy is devised only after analyzing every need, the expectations of clients are usually satisfied. This boosts client retention as well. Conclusion: Category management is a great method that can be used to increase a company’s profits. Since it is a continuous process, the strategy keeps adapting to the changing market conditions. Maintaining the right category management is a challenging endeavour. However, through the process of training and making informed decisions, every company can adopt this technique.