Key Elements of Category Management Lori Kelley Category Management - - PowerPoint PPT Presentation
Key Elements of Category Management Lori Kelley Category Management COE Lead, ICG Commerce ICG Commerce Confidential and Proprietary Information ICG Commerce Confidential and Proprietary Information Agenda What is Category
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Implementation Category Planning Spend and Savings Management Compliance Management and Reporting Continuous Improvement
maintain Annual Category Strategy
expirations and develop action plans
enablement is complete prior to go-live
relevant data to field and relevant functional groups
manage gaps in reported spend/savings numbers versus projections
with non-preferred suppliers
field spend to preferred supplier for commodity
Price Management
suppliers are complying with contracted pricing terms
improvements to help lower the cost of business for client
Supplier Performance Management Continuous Improvement
supplier performance
and develop action plans to resolve issues
Re-Sourcing
improvements to reduce total cost of
where service needs are not met under current agreement
platform to ensure service levels are acceptable
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Providing price control services, including
supplier price audit, price file management, price impact analysis, e-catalog content management
Price Management
Higher degree of certainty that
identified savings will be realized
Delivers monthly spend/savings reporting for
sourcing & CI projects; compliance visibility by location/unit; corrective action plans
Compliance Management & Monitoring
Objective, auditable, visibility
into spend, savings, & compliance patterns, attainment of realized savings
Developing annual plans, specifying the
sourcing & category management projects w/ realized savings forecasts
Category Planning
Sets the category direction and
procurement’s impact on department budgets
Providing site specific implementation and
contract rollout support post sourcing
Implementation
Higher degree of realized
savings through higher adoption 4
Review & analyze spend & savings; uncover
underlying issues that create variances; develop action plans to address root causes
Spend & Savings Management
Higher degree of certainty that
identified savings will be
spend
Identifying and implementing ongoing, post
sourcing, continuous cost improvement programs
Continuous Improvement
Ongoing TCO improvement,
sustainability
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Project based re-sourcing of category spend,
including sourcing, negotiations and/or renegotiation of PO/contract terms, pricing, etc.
Re-sourcing
Ongoing cost competitiveness
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Developing & implementing action plans to
address stakeholder concerns and
Stakeholder Management
Awareness of potential
systemic issues; opportunity identification
Day to day management of the supplier
relationship; resolution of tactical issues, score carding performance, contract management, etc.
Supplier Performance Monitoring & Management
Increased supplier
performance which yields lower total cost of ownership
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Implementation Spend & Savings Compliance Re-Sourcing Supplier Performance Management Price Management Category Planning Compliance Management Continuous Improvement Stakeholder Management CM Lifecycle for Typical Category
Early Lifecycle 0 – 6 Months Post Sourcing Late Lifecycle 18 + Months Post Sourcing Ongoing 6
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Improvement Opportunity Solution Savings Potential
Specification change Substitution of lower cost, product with equal fit/function 5 – 20% Specification substitution & standardization Implement new product across company 10 – 25% Compliance Improvement Re-implement targeted low adopting locations 5 – 10% Decrease number of suppliers Leverage additional product lines & services 5 – 20% Demand/TCO management Reduce monthly air filter change to quarterly w/ higher price filter 10 – 30% Transaction / Service Level process improvement / rationalization Increase average order size and achieve discounts 3 – 6% Inventory analysis, rationalization Supplier buyback of “C” or “B” items, VMI 5 – 20%
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