Category management strategy

How to create a winning category management strategy?

To create a successful category management strategy, you’ll need to rely on several different areas which include:

It’s also important to remember that your soft skills will play a huge part the category management strategy. Being able to effectively communicate with multiple different areas of the organisation will help you develop a strategy that will be a success.

Implementing your category management strategy

Once your strategy is agreed and approved by senior management; the category manager needs to work with the stakeholders to gain buy in. The strategy needs to be supported by everyone to ensure its effective. To help ensure the strategy is implemented and objectives are achieved, the category manager can set Key Performance Indicators (KPI) or Service Level Agreements (SLA) which can then be monitored to evaluate performance. At regular intervals, and the timing of such intervals depends on the nature of the industry, the categories should be reviewed. Procurement is a constantly evolving function so it may be that a category that was relevant at the start of a period becomes obsolete, non-critical or moves from direct to indirect. The reviewing process is important to ensure that categories are always relevant and in keeping with the overall corporate vision.

What is category strategy development?

Category strategy development uses all the knowledge you have gained from market research and analysis to create a category development plan. It’s important to consider what the situation may look like in five years’ time, which will provide the focus for decisions on the type, style and number of suppliers and the sourcing process. Each category will have its own timetable, but at least annually, the entire process should be reviewed.

Top tips for a successful category management strategy

Your category management strategy will evolve, so it’s important to keep in mind that it may require some maintenance from time to time. Look at some of our top tips that will help you make your category management strategy a success.

• Know your supply market and product positioning to leverage spend and create opportunities
• Grouping products into categories requires as many levels as possible. For example, envelopes can be categorised as: office supplies/stationary/envelopes/white/pre-printed
• Possibility of partnering with suppliers in high value / high risk categories should be reviewed at least once a year
• Use appropriate technology to manage the categories
• Keep in mind that a change in business direction will impact the category strategy
• Make sure the supplier can meet the need/demand of the new strategy
• Consider the impact on the supplier of failure to implement a new strategy
• Don’t underestimate the length of time required for implementing a sourcing strategy