Do You Know the Difference Between Strategic Sourcing & Category Management? You Really Can’t Get There From Here

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I know there’s a song with that line in in but for the life of me I can’t remember what it is.  But that line does resonate with some truths that we should talk about.  First, you have to know where your here is, because without that, Transformation is just not possible.  Too often we run into client situations where their people are barely doing the fundamentals of Strategic Sourcing, they have no common process, their stakeholders barely know who they are, they don’t have nearly enough talent in their organization and they want to implement this new thing called Category Management, that they keep hearing about, in the next 12-18 months.  It becomes really hard to confront them with the reality that they are on a journey to nowhere fast.

Of course, you also need to know where there is.  While Category Management has become the latest buzzword over the last 12 months and we created a new Level 5 in our Maturity Model about 24 months ago and shifted Strategic Sourcing to Level 4, there really is no common definition out there and probably won’t be one in the near future.  Therefore, it is important for each one of you to determine the differences between Strategic Sourcing and Category Management.  Here is a framework that we have been using very successfully with our clients that they have found to be extremely useful and has been prominently featured in our Category Management webinar series. 

As Yogi Berra (a noted management guru – just kidding) once said – “If you don’t know where you are going, you’ll end up someplace else.” That is as apropos as the original quote from Lewis Carroll – If you don’t know where you are going, any road will get you there.

 Of course, knowing where you are going and having a roadmap to get there are two different things.  We often find clients who have made the decision to start the journey but are haphazardly trying to get there without a clear cut plan of action.  That would be like a mountaineer attempting to scale a mountain that they’ve never been on before studying it and developing the path that they are going to take-a suicidal mission.

Continuing with the mountaineering example, equipping yourself with the right tools (processes, tools, etc.) and having the right competencies on your team is extremely critical.  Too often, organizations look for the magic bullet in some technology solution and assume that all their problems will disappear the day they implement the technology.  We are also in the business of helping clients select and implement technology solutions so we’re certainly not biased against technology but often find ourselves having to challenge the client about their assumption about the magic bullet.  We would hate to have to tell the client the truth after they have spent millions of dollars implementing the new technology and finding out that the results are not there – we’ve seen too many executives lose their jobs and their careers going down that path. 

The last word of advice we would have is that you are not going to get there from here in one big giant leap.  You have to go through the various stages of maturity and learn from each stage to get there.  There typically are a number of camps between the base and summit on any mountaineering adventure and they use them to acclimate, to test out their equipment, to validate their supply chains, test communications etc. etc. 

So as the new year dawns and you start thinking about your journey to Category Management in 2018, we hope some of these pointers will help.  We also encourage you to join us on our webinar on 01/09/18 titled:”The Journey from Strategic Sourcing to Category Management – How to Make it all Happen – TMG Secret Sauce”.  And of course, make sure to contact us if you need any Sherpas 😊 – as you know, there has not been any successful ascent of Everest without a good team of Sherpas!!

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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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