I was delighted to be asked to write a third edition of Category Management and felt this was validation that not only had the text made a difference to the world of purchasing, but that the world of purchasing has changed significantly in that time.
It is a practical book for those who want to get on and make purchasing category management a reality, and realize the dramatic value and benefits that are possible when it is well executed. It focuses on how to secure the best possible value from the supply chain through planned and structured purchasing intervention. It is also about changing the game, about doing something fundamentally different and achieving breakthrough improvements.
Category management is a strategic, process-based approach and incorporates many familiar aspects of business improvement processes and change management. It is not an approach that is confined to purchasing, but typically requires the active participation of and engagement with stakeholders, functions and individuals across the business to make it successful. Organizations therefore have to make an investment in time and commitment in order to deploy category management; however, the return on this investment is potentially very large.
I have been practicing category management and working with organizations to deploy it for more than 25 years now, and whilst the approach is ‘the way to buy’ in some sectors, for many it feels like it is only just beginning to be embraced, understood or gain traction. Many companies claim to practice category management, few truly do.
If purchasing intervention is little more than an approach based around tendering and contracting for repeat requirements ‘by category’ then this is not category management; it is tendering and contracting under a different name. Here, benefits will be limited to small incremental improvements only. True category management changes the game, but achieving this demands a quality deployment, and requires the entire organization to embrace, live and breathe the philosophy.
In the last six years, the world has plummeted into and out of one of the worst economic downturns ever seen, thus showing how category management is even more relevant in uncertain times and how it is deployed as the world around us changes.
This book represents a current best-practice view of purchasing category management and not only provides the necessary framework and toolkit but also explains in a clear sequence how to use them.
In this third edition, a suite of new templates has been provided to help practitioners make category management a reality.