Category management

Category management is one of the most important functions within the field of procurement as it connects procurement strategy, business demands and objectives with the supplier landscape and market and industry developments.

An essential part of category management is being able to clearly define the categories important to your organisation, not only considering your point-of-view of the various categories, but also cross-checking and ensuring that the categories fit with the potential list of available suppliers and their service offerings. This is a critical design decision that is essential for the successful establishment of the foundation, on which to develop your category management function further.

Establishing a sound and healthy foundation together with a set of principles is often part of a procurement strategy that can be divided into further specific strategies, goals and ambitions for each category function. An overall procurement or specific category strategy helps your organisation set efficient principles, KPIs, ambitions and goals and ensures optimal alignment of expectations between the procurement department and the requirements set forth from the core business.

Different categories have different vendors, ambitions and business expectations and the need for clear distinction between the different categories and need for strategic alignment only becomes more evident, the more complex your organisation becomes.

At KPMG, we have helped hundreds of clients develop efficient strategies to optimise their category management functions. This includes clearly segmenting each category, defining buying channels, ensuring the correct governance and prioritising each procurement team’s time and energy spent on managing each category. By having clearly defined vendor segmentation, buying channels and strategies in place, your procurement function can optimise the value delivered to the core business through increased efficiency, faster and more precise contracting and ultimately increasing value through your supplier network.

We know what good looks like and have unique insights into best practice across multiple industries, allowing you to benchmark your category management function against your competitors. With KPMG, you will have a trustworthy collaboration partner that ensures that the strategy is not only developed and put away, but also its successful implementation and that you are in control of contracts and supplier performance for your organisation.