On average, what savings percentage did your category management projects deliver in the last 12 months

In our recent global study, 10.1% of savings were delivered by improvers versus 6.6% of savings delivered by improvers

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While savings are a one-dimensional measure of contribution from procurement,?they are still the most common form of evaluating the function’s contribution to?business success. Leaders ensure that business stakeholders understand and agree?with the savings that their function receives from the category management?activities that they participate in.?

Key ways to increase savings delivery from category management are:?

1. Executive Mandate: Implement?top-down savings targets that are?allocated to categories and?associated business functions so?that a strong focus is created across?the organisation to achieve the?targets using a collaborative?category management approach,?led by procurement.?

2. Opportunity Analysis: Take a fresh?look at all category groups and?undertake an opportunity analysis.?Identify categories and suppliers?that have limited category?management focus in the past and?gain support to prioritise these areas?for category strategy creation.

3. Cost-Down Value Levers:?Rigorously apply all potential cost down value levers ,such as cost?analysis, demand management,?specification optimisation, volume?consolidation etc, so that all?available value opportunities are?identified and quantified for each?category.

4. Project Management: Introduce?more rigorous project-tracking tools?so that the overall savings pipeline?has more visibility and can be more?accurately predicted, controlled, and?interventions made quickly to assure?delivery. Set target completion?times for each project and?implementation workstreams.

5. Benefit Measurement: Strengthen?existing measurement systems and?processes with support of the?finance community. Agree the?approach with stakeholders and?make this a highly efficient activity?that takes up the minimum time?possible for category managers.

How can this be applied to my organisation??

Book a free assessment call?

Mark Hubbard, one of our Directors, will walk you through a series of quick questions to determine where you are now and to introduce a structured improvement programme to optimise your category management performance:

FUTURE PURCHASING'S GLOBAL RESEARCH INTO CATEGORY MANAGEMENT

Since 2012, we have undertaken the research five times. More than 1,800 participants from organisations with more than €5tn spend have taken part. This has provided more than 250,000 data points that allow us to pinpoint best practice and define the missing standards for implementing category management.

Contact us if you would like a copy of the full report.

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