At Clearview, we have managed or been involved in all manner of categories.
Our team members come from a range of industries with experience managing global portfolios across direct and indirect spend. We have been engaged by leading organisations and entrusted with real responsibility to develop and implement plans for vitally important categories.
With a global pharmaceutical company, we worked to support the creation of their EU-wide category plans for raw materials, packaging, contract manufacturing and engineering. For the Irish Education sector, we helped to develop the nationwide lab category plan. As part of a complete managed service for a Belgian bank we have a team of professionals managing all their portfolios including IT, Marketing, Professional Services, Facilities and Admin.
Keep Your Organisation Ahead
With the intensity and upswell around automation, a thrust for ever increasing efficiency and cost reduction, while customers demand ever-increasing and instant service ask yourself, well, how are we and our suppliers organised to deliver against these goals? Put simply, if you are not ready you must question the long-term viability of your business.
Our experience and observations show that even the best-in-class Leaders in Category Management constantly tweak and flex their plans to react to, stay in touch with or to remain ahead of changing conditions. Failure to do so can have significant impact where they are outflanked by competitors and the market.
What does order look like? It starts with the definition of a category. Simply put, it is a group of like goods or services organised how the market is structured to provide them. Similarities can occur that help to shape the category and its definition for your organisation based upon the type of material used, the production process, the goods and services, and a range of other characteristics.
Category plans cannot be static, because markets are not static. Several years ago when organisations were buying data storage, they bought servers from a defined set of recognisable, big-brand suppliers. Things have changed, and so should their category strategy. When they buy storage now cloud must be a consideration, delivered as a service with a largely different supply base, it offers cost and flexibility benefits. Cloud has other layers of complexity including data security and location of that data. Category planning is an ongoing activity and the plans must evolve and stay attuned to users, their requirements, and market conditions.
Category Management, or Order, can be described as follows
- Category Management and Procurement is accepted as a high-value contributor and partner from across the executive ranks and functions
- There is absolute clarity as to the scope of the category – what it includes and does not – and it mirrors how the market is organised to deliver the goods or services
- It combines key people with skills and expertise from across the organisation to provide input on specification, the market, and the connection back to the business and its plans. They challenge to ensure the most appropriate solutions are procured and they work as team across the entire procurement life cycle from planning, through tendering and contracting to management and value capture.
- A true connection to the business, drawing upon specifications, forecasted projections and market clarity shapes the multi-year category plan. Last year’s activity is not this year’s plan, but it serves as a baseline. We need to start with the real demands of the business, and this should be refreshed with a long-term view of the business demands.
- Critical enablers must be in place beyond the stakeholders and team members, to include the data, systems, policies, procedures and governance
- High performing, contracted, streamlined supply base with enough redundancy and back-up, delivering measurable value
A few words from David
In this piece David discusses the value of starting procurement thinking with a category plan. The total cost, service and risk implications are significant without it. A category plan grounded in a strong understanding of baseline, specification that is future proofed, and a thorough understanding of the market will deliver the best solutions. Would you build a house without a design and use antiquated technologies? No, so why procure without a plan?
How Can We Help?
- Engage with category manager and team to build a category plan
- Use a structured planning methodology focus on spend, usage, requirements, market research and total cost
- Devise a vision and select the appropriate sourcing levers
- Ongoing post contract management of the category to ensure sustainable value delivery.
- Market research is essential for buying organisations not only as a once-off task but more of a consistent approach to conditions both locally and globally.
- Profile the market structure including trends, forces and composition.
- Survey suppliers and conduct industry benchmarking.
- Analysis of competitive macro environment structure and then draw out key conclusions and findings to shape the category sourcing techniques and strategies.