THE FACULTY QUARTERLY 

Autumn, April 2013

Category Mastery – From good to great

The Faculty Roundtable release new research findings


In the never ending search to deliver greater value, category management is widely acknowledged as the next big opportunity for procurement. 

With the aim of delivering sustainable value beyond price, and underpinned by a continuous commitment to stakeholder engagement, best practice examples of category management touch upon the value levers of service, cost, innovation and risk.

“The value proposition of category management goes even further than this,” says Manu Khurana, consultant and co-author of The Faculty Roundtable’s recent research project into the characteristics of category management excellence.

Manu explains: “The mere process of developing a dynamic approach to market intelligence, engaging with the business and documenting category strategies, contributes to superior stakeholder engagement, vastly improves knowledge retention and creates a culture in which intellectual capacity is focussed on value creation, rather than transactional activities.”

Despite this potential to deliver remarkable outcomes, many organisations are still grappling with the fundamental challenge of demonstrating the value of category management, a strategy which by its very nature is a long term approach, to senior manager who demand quick wins. 

According to Matthew Perfect, Principal Consultant and head of The Faculty’s Roundtables and Forums business, the key to excellence in this space is to develop robust, yet simple category strategies that can be measured against short, medium and long term metrics. 

“Building stronger relationships with commercial business partners (internal and external) and articulating a shared vision of what category success will look like, is fundamental,” explains Matt.

Research findings were explored in recent workshops held in Melbourne and Sydney and online via WebLive attended by over 100 members of The Faculty Roundtable. Senior Consultant Alexandra Goffey facilitated and shares the following 10 enablers that emerged: 

  • Structure the team for success:  How will procurement engage across the category dimensions of: Supply Markets, Internal Customers, and Business Unit/Growth strategy?
  •  Agree a category management model: Agree and implement a common definition and scope for category management and a standard template for documenting category strategies
  • Create a strategic focus: Provide headspace for CM’s to develop strategies and implement a governance process for reviewing and approving
  • Develop and advantaged fact base: Develop enhanced capability in the areas of supply market analysis including supplier economics, TCO,  and the analysis of category data to identify opportunities and risks
  • Build your category community: Identify key category stakeholders and implement communication plans and governance process to develop shared ownership of the category strategies
  • Develop innovative strategies that align with the business’ value drivers: Leverage the fact-base  and  stakeholder relationships to develop strategies that deliver the right mix of lowest TCO, customer service, risk mitigation and innovation to support business growth
  • Develop the capability of the team: Attract the best talent by developing a reputation for people development. Great CMs have strong communication skills, business acumen and have an intimate understanding their stakeholders’ needs
  • Measure and manage performance: Set challenging targets and implement standard measures of category performance including external benchmarking of category performance and implement a simple process for regular reporting of category performance
  • Selectively implement enabling technology: Implement pragmatic and simple solutions for spend analysis, contract management and supplier performance measurement
  • Link to your supplier management process: To drive continuous improvement

The Faculty has extensive experience in helping organisation’s to deliver value through category management.  Our consultants have delivered numerous projects to design and build category management frameworks, develop the necessary skills and capability of category mangers, develop and document category strategies and deliver the critical change agenda for making the shift to category management.  Learn more about some of our category management work here

If you’d like to learn more about the findings from The  Roundtable research project into Category Mastery, please contact Matthew Perfect, Principal Consultant, on +61 9654 4900 or via matthew.perfect@thefaculty.com.au