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The most essential data and numbers essential for professionals employed as Category Managers may possibly be recorded thousands of times, for example, supplier spend, category spend and also individual business enterprise unit spend - there is a decent illustration mapped out in the following paragraphs. For the reason that we have pointed out, this data is normally not as readily available as might be preferred. Yet, it’s absence is undoubtedly known and lamented by the Category Managers that have to play the game ‘Spreadsheet Detective’ in an effort to manually bridge the information gap! Right now we are switching our attention towards a second level connected with category knowledge which has not found itself written about or codified so far as we are informed. Tier Two is far more specialized information which will differ according to the profile of the particular category and also the potential value which may be obtained by simply building on the information and understanding out of Tier 1. Visit return to site to explore where to engage in this viewpoint. The time and effort to acquire this information however can be worth it since the knowledge acquired can be of a extremely high value. In most cases this can lead to more informed negotiations on terms, much better cost management, greater capture of company innovation and pinpoints additional opportunities for value enhancement. Different types of Tier 2 Category Specific data We have recognised 10 different kinds of Tier Two category specific information [1 Breakdown the Cost [Cost breakdown or PPCA activity figures out the primary cost elements that are incurred by the supplier giving you a product or service. Each suppliers cost is separated into its main elements like the cost of raw materials as well as transportation etc. When this is successfully done it's less difficult to compare and contrast suppliers against one another. Of course, this process potentially avoids making assumptions and helps to understand not just what makes up any specific cost but also what drives it. One example is, wherever logistics is a really high [ of the overall cost price then a rise in gasoline prices will almost certainly impact the total price. 2 Specification Mapping [When you are evaluating savings from a supplier, this kind of categorisation technique is a huge help. Part of the category strategy ought to go in to greater depth to find cost reduction opportunity which ought to be planned as part of the process. A great deal of analysis is necessary to achieve this. It has to get in to the tiniest details of a constituent part of a product or a service because these could be the principal drivers behind the cost price. This information will make it possible for detailed Value Analysis activity to be carried out. Never overlook the tiniest details of any product or service, it could be the key to a new chance to help reduce cost. 3 Finished Product Cross-fertilisation [This requires an understanding of which sub-categories provided by a supplier are being used in which finished products sold to customers and making this visible to the supplier. This can be used to encourage suppliers to give the best prices and/or innovation, so they feel directly connected to business development with the end consumer and can have an effect on demand for their own products and services. 4. Unitisation & Benchmarking [Unitisation is where spend data is divided by a suitable variable eg area, length, customer satisfaction etc. Be taught further on our partner web page by browsing to Zotero [ Groups > Mandatory Knowledge in Category Management - the specifics for P. In this way different suppliers are able to be evaluated alongside each other and difference acknowledged. Cost reduction occurs when very good habits are recognised and then shared whilst negative processes are got rid off or re-engineered. Click here Mandatory Knowledge in Category Management - the specifics f to explore the reason for it. One example of this approach applied by ourselves, was the analysis of unitised total FM costs in every square metre across 80 depots for a UK bus company. 5. Operations Data Overlay [Getting a alternate product or service which directly compares with the last one is very easy to validate when it comes to cost difference. Naturally, pinpointing cost differences where the new product or service is different is a lot more challenging. This is why the overlay of operations data files may make it possible for a total cost of ownership (TCO) evaluation to take place and even more complicated potential opportunities and associated cost differences verified. Examples of these kind of rewards include situations such as where a battery pack is identified as lasting longer compared to the previous one or where a different active ingredient improves shelf life by 20 [ more. The ‘Procurement Ready’ Knowledge Model Having a standardised approach to Procurement Knowledge helps you whenever identifying and quantifying an opportunity. Understanding which value levers to pull is a crucial skill for many category managers to identify a cost reduction opportunity. The Supply Chain Footprint [This requires mapping 1st level vendors and also finding out the geographic locations from which they supply your business. The next step is to map additional tiers of the supply chain and related manufacturing locations. Pinpointing all these addresses makes sure that major supply chain risks can be managed this includes assurance of supply; standing as well as, business costs. 6. Revenue & Profitability Overlays [Discovering areas where purchasing teams can improve cost prices and/or sales revenue through the course of category reviews is required practice. Instead of concentrating on the price of specific part numbers or sub-categories, the cost of these are grouped together around a customer end product or service. At this stage people from various other departments are invaluable in helping to validate opportunities to help reduce cost. One of the biggest benefits however by working across all categories is the fact that additional opportunities are exposed to the category buying teams. 7. Supplier Perception Data [This is structured qualitative responses from suppliers and internal stakeholders regarding the existing state of a relationship. I found out about source by searching books in the library. The process can flush out where things are going both well and not so well. The added benefit of learning how important the organization is to the supplier is also identified. Things to ask will include [How well do the strategic agendas of all parties align? How effectively does the relationship function? Is the relationship successfully delivering the benefits required by the organisation? Have any business opportunities not been identified? With this data easy to get to and plainly linked to the appropriate categories, development business opportunities can be made visible, integrated in category strategies and put into practice. 8. Market Data Overlay [Market place data such as energy prices, metals costs, chemical prices, labor costs etc. should be made available to appropriate purchasing team members. Tracking any changes in very important areas such as these is important for both price reduction opportunities and for the good of the suppliers success. 9. Consumption Profile This is helpful to understand when the business has got an end customer demand profile that is not flat, but varies during the year. This empathic methodology with suppliers aids your SRM (Supplier Relationship Management) as their needs are better understood and planned for. Summary & Recommendations for Action [You will find information worth referring to about this subject matter by Future Purchasing. on their website. The top category managers will definitely generate a strategy based on a formidable procurement understanding. They'll do it more easily plus the approach needn't be hard for them. This in turn encourages increased momentum for procurement transformation. Taking this approach is known as a hallmark of top rated category management exponents and frequently can lead to more than 45 [ more savings compared to those whose approach is less demanding. Ensuring that all category managers keep to the same approach is vital and so the process must be mapped to guarantee consistency. The foremost forward thinking businesses have champions of this approach whose role it is to ensure that the procurement knowledge database is always up-to-date -- liberating category managers to focus on developing superior category strategies, more quickly. Prioritising the requirement for a Knowledge base is fundamental to achieving success and has to be structured and prioritised in order to really transform ways of working. Making category management a key commercial competence of modern procurement departments is a high priority. Both public and private sector businesses should deliver procurement kpi’s efficiently and accurately. Using a ‘Procurement Ready’ strategy is a vital basis to generate significant value faster. A procurement consultancy will be invaluable in saving time, energy and your money whilst embarking on this journey and its highly recommended..

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