PROCUREMENT STRATEGY
GEMENT provement
The use of category management can give procurement teams a competitive advantage – but what is the importance of constantly looking for ways to improve ?
WRITTEN BY : SEAN ASHCROFT
Category management is fundamental to a healthy procurement function , it allows organisations to segment spend into areas that contain similar or related products – and thus to focus on categories that present the strongest opportunities for consolidation and efficiencies .
But technology is moving quickly forward , as are businesses , and the danger is that category spend managers can get left behind – using yesterday ’ s solutions to meet tomorrow ’ s challenges .
Etosha Thurman is Chief Marketing & Solutions Officer , Intelligent Spend & Business Network at SAP . Thurman ’ s role is to drive product marketing and solution management across SAP ’ s intelligent spend solutions and the SAP Business Network .
Thurman is perfectly placed to advise on category management strategy . She says the steps involved in developing a successful strategy include :
• Defining logical product and service categories
• Collecting data on past spend and prices
• Conducting a sourcing analysis of materials and who is producing them
• Carry out a should-cost analysis , to better understand supplier economics
• Gathering information about markets , regulations , and risks “ They should also collect and analyse data on who else is buying products or services that they plan to procure , and why they are buying ,” adds Thurman .
“ This creates a picture of the category in which they are working and helps them to understand market conditions .”
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