Why Your Business Needs a Category Management Plan!

Businesses must be aware of several factors to remain competitive in today’s volatile market. A solid procurement strategy can help streamline and refine purchase decisions, ultimately improving the bottom line. A sound procurement strategy includes category management and a category management plan.

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Featuring Our 12 Best Procurement Articles!

Procurement is a core function in every single company. Whether purchasing goods or services to support the company’s product offering or purchasing goods or services to support the infrastructure and operation of the company, Procurement is key and featuring our best Procurement articles is more than appropriate.

Depending on the type of industry you are in the Procurement of goods and or services can be the largest, or one of the largest, expense areas. As such the ability to efficiently procure goods to meet all objectives of cost, delivery, quality, and more is essential for not only success, but for survival.

In this “Featuring” series article we are putting the spotlight on Procurement and Purchasing. We are presenting our Top 12 best Procurement articles with information, techniques and approaches which will have something for everyone to learn from and apply in their own situation.

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Manage Procurement Spend Like It’s Your Own Business!

Procurement and Procurement Spend. Purchasing. Commodity Management. Category Management.

They are all running their own businesses within their companies, or at least they should be, whether they realize it or not.

Goods and services spend in many companies is the largest, or one of the largest, expenses. And all of this is managed by Procurement personnel.

But do they manage this spend like it is their own business or do they manage it like it is just a functional job with transactional activities to be performed?

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What’s the Difference Between Commodity Management and Category Management?

For a considerable portion of my career I have worked in the Manufacturing and Logistics/Distribution Industries. In these industries a segment of the Procurement organization is called Commodity Management, not Category Management.

However when I entered the Retail industry the group largely responsible for Procurement, amongst other things, was called Category Management.

At its core each group was procuring goods. But while there were shared responsibilities there were also key differences.

So what is the difference between Commodity Management and Category Management?

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What is Tail Spend and Why Doesn’t it Wag Procurement?

Every Procurement organization is faced with the need to deliver cost savings. But virtually every Procurement organization ignores or gives lip service to an area that promises substantial savings opportunity: Tail spend.

What exactly is Tail spend? Why does it not get the attention that its saving potential promises? And what can companies do to tackle this area without compromising their focus on larger spend areas?

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