Category Management Done Virtually

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This Tuesday we held our 1st fully-interactive virtual Procurement/Supply Executive Round Table (PERT) and based on the feedback so far, it went quite well.  We were able to create an interactive feel for the participants with breakout rooms, with a facilitator and had each room use a chalkboard to capture their discussions, etc. And while there were a few minor glitches related to adoption of the technology, people were able to interact quite well with each other.  So, if you’ve been hesitant to get some training done for your group because of the travel costs involved in bringing everyone together, you should give Virtual Instructor Led Training (“VILT”) a serious look.

The topic for PERT was “Category Management – Have we Made Any Progress or is it Still a Vague Concept.”  While we spent some time on defining Category Management (“CM”) and differentiating it from Strategic Sourcing (“SS”) and the benefits of moving to CM, most of the time was spent on the Vital Factors for implementing CM and on how to get started.  Here are the Vital Factors:

  • Value Focus
  • Change Management
  • Collaboration with Partners (Business Units & Suppliers)
  • Adoption
  • Strategic Competencies Required

Clearly, there is no clear definition of CM that has yet emerged, other than it is fundamentally and significantly different than SS and those differences were expansively laid out and discussed.

Here were the top challenges culled from a longer list:

  • Procurement/Sourcing/Supply Chain (“Procurement”) still viewed as a cost cutting organization
  • Lack of Governance to support Category Management
  • Business Units hesitant to cede perceived power
  • Organizational silos leading to decision chaos
  • Don’t have the right skills/competencies in “Procurement”

What was clear from the discussion was that ALL of the challenges were internal – which was one of the biggest differences identified earlier in the workshop.  Strong agreement was reached that the level of influencing and selling required and the effort it takes is significantly underestimated by all.  Stakeholder support and engagement continues to be a major challenge.

The discussion then moved on to “how to get started” and there was general consensus that while the following have some logical sequence, they are not sequential in nature but are staggered concurrently.  But before we get to the actual steps, there are some things to actively consider – You must Educate and Align before Executing, Focus on Adoption and not just the design of your solution, and you need to know where you are as an organization and where you want to go.  Here were the steps developed at the workshop:

  • Business Case & Roadmap
  • Executive Support
  • Build “Procurement” Competencies (not just process competencies but strategic competencies)
  • Identify and integrate Stakeholder Value Drivers
  • Enroll Business Unit Partners AND Suppliers

The two biggest issues that got the most energy in the workshop were around the challenge of fundamentally redefining the concept of Value AND not having the strategic competencies within “Procurement” to deliver CM.  While most people within our community are starting to make the shift around rethinking what Value means, they are now trying to figure out how to convince their Stakeholders and how to adopt the new definition of Value in their metrics and decision making.  That is clearly progress because now we are talking about how to do it and not whether to do it.

On the topic of Strategic competencies, there is probably still some work that our “Procurement” community needs to do – both in convincing ourselves and our stakeholders that those competencies are Vital for “Procurement” to have any chance at delivering sustainable benefits from CM – absolutely Vital.

If you would like more information on any of these topics from the workshop, drop us a line.  And next time join us – you can now do it from your office or even home.  Mark your calendar for our next workshop on Tuesday, November 12th (stay tuned for the topic). 

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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