Category Management, a strategic step

Category Management, a strategic step

Day by day the supply chain gains more strength within organizations due to its strategic impact on the achievement of established objectives and goals.

Not being immune to this challenge, many companies are migrating to the management of their procurement organized by  category management, which basically corresponds to the segmentation of the goods and services that satisfy the needs of the internal customer  and their treatment by strategic units within our area. who analyze the goods and services that make up their category to develop effective tactics that improve their supply and generate efficiency for the organization.

Steps for category management

It is important to take into account, among others, the following aspects to move to category management:

1. Have a  master of goods and services  based on the needs of the company and the sector to which it belongs.

2. Generate  purchase histories  that allow for a correct expense analysis, in order to make an adequate segregation of business units.

3. Determine the  internal clients to serve  in each of the determined categories.

4. Make a correct  distribution of the team between the categories taking into account their profiles  and specialties. The idea is for the members to become experts in their topic.

5. Analyze risks and supply opportunities  in each of the categories, in order to have a clear vision between the behavior of purchasing requirements versus the market that offers the products and services.

6. Generate strategies by category taking into account variables such as  response times, consolidation of needs , selection and negotiation modalities, suppliers in the market, among others.

7. Determine indicators that measure the  behavior of this management  in order to implement improvements in weak points and strengthen the advantages during execution.

The mastery and knowledge of our operation together with a strategic vision of supply  will always allow us to make the best decisions regarding the organization of our process. By taking good practices, relying on our best human resources and leveraging the use of technology, we will obtain better results, being a competitive advantage for the organization. 

Ricardo Plata

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