Changing with the Times: Category Management at a Crossroads
The report is based on a survey of 430 C-level executives and an interview program with practitioners and subject-matter experts. The report highlights the evolving landscape of category management as a function of procurement. The report emphasizes the importance of category management in preparing organizations for uncertain futures and adopting different strategies. Effective category management is linked to strong business fundamentals and can lead to significant savings and a 500% return on investment. A global survey of 430 C-suite executives found category management implementation and improvement to be the fourth most important area for value delivery in procurement.
Category Management in Procurement: A Need for Strategic Focus
- Survey results suggest that category management is less important than cost savings, risk reduction, and inventory management in organizations.
- Alan Day, chairman of State of Flux, a procurement and supply-chain consultancy, questions the strategic importance of category management.
- Mark Webb, managing director at Future Purchasing, believes that category management is ranked fourth in driving value in procurement.
- Webb believes that other areas are prioritized over category management due to their short-term relevance, while category management strategy and implementation have a longer-term approach.
- Lisa Martin, senior vice president, global procurement, and CPO at GSK, suggests a more agile approach to category strategy.
- Jonathan O’Brien, CEO of Positive Purchasing, argues that category management is an organization-wide philosophy, focusing on functions working together to identify the right sourcing strategy.
- The survey findings indicate that procurement teams are increasingly reporting to COOs, and category managers' remits have expanded to include metrics like suppliers' greenhouse gas emissions and workforce diversity.
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