Category Management:  Building the NextGen Category Management Organization

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Happy New Year to you and your loved ones!! Regardless of where you are starting the New Year, we assume that you have ambitious plans for this year. And whatever those goals are, I know that you know that you need to have the right organization in place AND one of those goals has to be the transformation of your organization – there is way too much change and challenges around us to do otherwise. With everything else going on, topped off with AI, saying that we are at an inflection point is not hyperbolic at all – in fact, it might be an understatement.

I thought it would be interesting to walk you through a selected list of client engagements because there is value in learning from others (a form of free consulting if you will 😊).  This is a multibillion multinational, headquartered in Europe and in the business of heavily engineered manufacturing.  When we conducted our Environmental Scan Diagnostic, here is what the client coalesced around in terms of the business problem:

  • Numerous issues with suppliers were not being addressed
  • Category Management and Supplier Development Engineers were constantly fighting fires in a reactive manner
  • Opportunities to develop suppliers in emerging markets were being lost
  • Heavy attrition of skilled resources due to the tactical approach of the organization

Now your problem definition might be different at some level but if you were to look at it from a meta level, I bet you could draw some similarities?  In any case, this led the Leadership Team to adopt the following as their goal that would help them achieve their objectives: Need to elevate AND transform the role of the Category Management / Supply Chain organization to maintain a competitive advantage for ABC.  If you were to parse this statement, you would find many different pieces but all focused on changing their organization in a very fundamental way.

That led us to the following deliverables:

  • Identified competencies necessary to move the organization to play a more strategic role
    • This one was perhaps the most challenging because it required the Leadership AND the members of the organization to acknowledge that they were lacking some very critical competencies and that they would never be able to deliver their stated objectives
  • Standardized processes to make work more efficient
    • While getting people to agree to change processes is easier, the hard part was getting people to agree on the new process and the even harder part was getting everyone to actually use the new processes (Adoption).
  • Developed a training curriculum to move the organization toward world-class
    • Most organizations really have not taken the time to identify the skill and competency gaps they have and then developed AND delivered an actual curriculum to close those gaps. As you would expect, we of course added a very strong component of Adoption to ensure that the training led to actual competencies and not just certificates 😊.

 

  • Redefined the role of the Category Management organization to be more strategic
    • This was a bit challenging because it required getting the Executives to buy into a future vision with some credibility gaps getting in the way. And not only were they being asked to buy into it, but we also had to challenge them to accept their active participation and role in making it happen.  They had to provide funding, give the Category Management organization time to get there, provide visible support so that the Category Management organization bought into it.

It was a very successful engagement for the client (and therefore us😊).  In a nutshell, here is what we did: Developed a maturity model, assessed the Category Management / Supply Chain organization against the model and created / implemented a Transformation Roadmap:

  • Developed a world class competency model to drive the organization toward a more strategic role
  • Assessed the organization against the competency model and developed a Transformation Roadmap to close the gaps
  • Implemented the Transformation Roadmap by streamlining the sourcing process, providing a manual and toolkit, training the entire organization on the new process

Of course, there was a lot more than the three bullets above and we are happy to send you a detailed case study that was published on this.  We wish you the best in transforming your organization this year!!!

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