Category Management Consulting

Category Management Consulting

We firmly believe that the tools, templates and technology are only as good as the passion, skills and experience with which they are applied.  They need to be appropriate to the client’s capability and capacity for adopting a category management approach.  In our experience we rarely deploy our full suite of tools, preferring to use the minimum possible to achieve the primary client goals in the most effective way possible.

Adoption of a formal Category Management Process delivers the following benefits:

  • Aligns procurement activity with business priorities and secures business buy-in
  • Enables improvements in quality, service levels, availability and value for money
  • Increases the potential for delivery of procurement savings
  • Provides insight into, and ability to reduce, supply chain risk
  • Provides a platform for effective supplier management and continuous improvement
  • Optimises the use of procurement functional resources

Our process includes the following steps:

Market Analysis

A market analysis is done so that you can formulate a strategy on how to develop your category. A market analysis studies the attractiveness and the dynamics of a services or goods market within a designated or specified industry. By understanding the key drivers of your market, you can identify competitive and commercial advantages, and answer key questions which will help shape your category development, e.g. How many suppliers offer similar products & services?

The key elements of market analysis are as follows:

1. Market size (current and future)

2. Market trends

3. Market growth rate

4. Market profitability

5. Industry cost structure

6. Key success factors

7. Additional criteria

Opportunity Analysis

Opportunity analysis is a quick and simple tool for choosing between a range of potential opportunities and helping prioritise which to tackle first.  It enables an opportunity for the procurement team to engage stakeholders in deciding what should be prioritised and where resources should be invested.

To undertake an opportunity analysis, you must assess the expected value to the business for each opportunity, and rate each option on a scale from high to low. The factors that will affect the scale of the outcome will be:

  • how valuable the business perceives the outcome to be (expressed in lifetime costs)
  • the scale of the organisation’s total spend as a percentage of the market, if this data is available
  • the quality of the current arrangement
  • the “softness” of the market (i.e. the extent to which the business can influence the market)
  • the number of suppliers

The difficulty of implementing each opportunity must then be assessed in terms of time taken, resources needed, knock-on effects etc.  The factors that will affect the ease of realising the benefits will include:

  • the number of stakeholders involved
  • the location of those users
  • the variety of different solutions currently used in the business
  • the need to involve trade unions or staff groups
  • the degree of subjectivity in the specification
  • the market difficulty, e.g. the degree of competition, entry barriers, government regulation, legislation
  • the organisation’s understanding of market dynamics
  • technical complexity
  • business impact
  • available resources

Barkers Process

  • Advice, guidance and support to the client Procurement leadership team
  • Creation and implementation of Category Management process, procedures, tools and templated
  • Mentoring assigned client resources and affecting knowledge transfer
  • Assessing team skills and behaviours then delivery the required training & coaching
  • Supporting the recruitment of enduring client resources

Achieve your business ambitions with Barkers.

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