Course information

Procurement category management is a strategic approach to procurement that involves analyzing spend data, identifying categories of goods and services, and developing a plan to manage those categories. This approach helps organizations optimize their procurement process, improve supplier relationships, and achieve cost savings. In addition to cost savings and process improvement, procurement category management can help organizations mitigate risks, improve compliance, and enhance their sustainability and social responsibility practices. By implementing effective procurement category management practices, organizations can achieve their procurement objectives and support their broader business goals.

In this course you will learn importance of understanding the concept of Category Management. 

After this course you will be able to describe Category Management, define a Category and explain some best practices in Category Management.

Curriculum

12 minutes

    1. What is and what is not Category Management.

    1. Defining a category - segmenting your spend.

    1. Building blocks in a category management program.

    1. Key takeaways from the course.

    2. Reflection after the course

About this course

  • €20,00
  • 6 lessons
  • Basic level course
  • Procurement management role

Category Management

Explained by EFFSO

Category Management (CM), a concept originating from the retail industry in the late 1980s, is a strategic approach to procurement that aims to increase business value by grouping together similar areas of external spend. This method allows organizations to identify opportunities for consolidation and added value. Initially designed for project-based sourcing, CM has evolved to encompass spend management, market intelligence, sustainability, and risk mitigation, focusing procurement efforts on leveraging agreements across different market segments.

CM differs from strategic sourcing in its systematic, holistic management of categories for the entire lifecycle of goods and services. While strategic sourcing focuses on developing a supply channel with the best supplier at the lowest Total Cost of Ownership, CM covers the entire procurement cycle, including managing supplier relationships and directing procurement activities. This comprehensive approach involves developing category plans that include targets, stakeholder requirements, opportunities, and prioritization. It requires a high level of specialization, especially for large or strategic categories.

Key benefits of CM include cost efficiency, improved quality, efficient resource use, better market understanding, streamlined business strategies, and enhanced collaboration. It is widely applied in businesses, government, and non-profit organizations, aligning business strategy with sourcing initiatives and supplier relationship management.

Success factors for implementing CM include a long-term investment perspective with early result delivery, focusing on realized value, establishing a new way of working, adding specialist roles, enabling cross-functionality, and creating an understanding of the change process. These factors are relevant for both private and public sector organizations, with the potential in the public sector being particularly significant due to the opportunity for more efficient procurement processes.

The process begins with categorizing spend using a spend analysis tool and assessing potential across categories. Organizations may seek external expertise for spend analysis to minimize impact on daily business and gain fresh perspectives. This analysis forms the foundation of category management and helps determine which categories to include in potential sourcing waves.

EFFSO, a company specializing in category management, offers services ranging from spend analysis to potential assessment, and structural analysis of procurement functions. Their approach includes training and coaching internal resources and providing resources to boost the procurement function for quick results.

To succeed in category management, turning data into insights through spend analysis is crucial but not sufficient. Effective category managers spend considerable time understanding stakeholder and end-user needs to support organizational goals. This involves active collaboration, networking, benchmarking, supplier relationship management, performance development, sustainability management, and effective communication. A category manager is a value-adding partner with extensive market knowledge and promotes deeper collaborative relationships between suppliers and internal stakeholders.

EFFSO

Get unbeatable procurement results! EFFSO’s extensive experience in procurement enables organizations to achieve concrete results. Regardless of the challenge!

EFFSO is a leading procurement consultancy in the Nordics, passionate about procurement excellence and change management. Since 2007, they've offered expert management consulting services in procurement, including spend analysis, potential assessment, category management, and more. EFFSO's experienced consultants manage everything from category projects to coordinating major transformations for procurement functions. They focus on developing procurement operations to achieve tangible results, enhancing the value of procurement in organizations. EFFSO also values nurturing procurement talent, offering great development opportunities and a friendly workplace.


For more information, visit EFFSO's homepage.

Next step

  • €40,00

    Category Management - how to get started

    This advanced course will help you with the first steps when implementing Category Management. The course include a broader explanation of Category management, the content of a first version of a Category strategy and key finding (checklists).
    Buy Now

About Learn How to Source

Learn How to Source is an online platform based in Sweden, offering a range of procurement courses accessible globally. It serves as a community where procurement experts share their knowledge through online courses, designed for various experience levels from introductory to expert. Courses are concise, about 30 minutes each, and cover different aspects of procurement, tailored for different buyer roles. The courses focus on practical knowledge, presented by seasoned professionals, and include quizzes and certificates. They can be accessed from any device, emphasizing microlearning for flexibility and efficiency.