The most essential resources and details needed by people employed to work as Category Managers may have been written about countless times, e.g. spend by supplier, category, business unit etc. - there is also a good illustration mapped out listed below. Clicking procurement training site likely provides tips you can tell your aunt. As we have said, this data is normally significantly less readily obtainable as would be liked. Category management individuals are found ripping their hair out wrestling with over-worked or under prepared records of numerous different sorts to find the information they must have to complete a 100 picture of their categories situation. This article seeks to identify another level of category information which is unique and not found anywhere else to the best of our knowledge. Tier Two is a lot more specialized information which will differ depending on the profile of the category and the potential value which may be achieved by simply building on the facts and understanding out of Tier 1. Procurement Consultancy Reviews is a staggering database for more concerning when to see about it. This provides you with undeniably really advanced insight and category strategies which will fully connect with the particular business. The main importance of putting in the extra effort is found when negotiating with suppliers because the information obtained gives valuable insight to spending and also identify the opportunity to go after a reduction or add value enough to provide a transformation to the relationship with the supplier and additionally making management of them less complicated. Ten ways Procurement People benefit from category information Category Management Knowledge -- 10 important gaps it's critical to fill1. Cost BreakdownsPurchase Price Cost Analysis (PPCA - another name for “cost breakdown” is the work associated with determining the most important factors that comprise every particular cost from the supplier for the service (or product). Each suppliers price is categorised into its most important elements for example, the cost of raw materials and transport etc. After this is completed it is much easier to assess suppliers against one another. Of course, this process potentially avoids making assumptions and will help to understand not just what makes up almost any specific cost but also exactly what drives it. As an example, wherever logistics could be a high of the overall cost price then a hike in gasoline prices will impact on the overall cost. 2 Understanding Technical specificationsSegmenting spend down into different categories and even sub-categories will be adequate whenever calculating probable cost savings. However, while discovering opportunities during your development of a category strategy, it's important to analyse spend in greater detail. A lot of analysis is required to achieve this. It must go in to the tiniest detail of a constituent part of a product or a service because they can be the main drivers driving the cost price. Once successfully completed, analysis of the conclusions to determine value can be done. Do not overlook the tiniest details of your products or services, it could be one of the keys to the next chance to reduce cost. 3 End Product LinkageTo understand what products connect to other sorts of products (or services) used by end consumers the particular suppliers sub-categories will need to be matched with the end product. This can be used to encourage suppliers to offer the best pricing and/or innovation, to allow them to feel instantly connected with business development with the end customer which allows them to influence the demand for their own products and services. 4. Benchmarking and Unit ValueUnitisation is where spend information is divided by a suitable variable such as area, length, customer satisfaction etc. This enables benchmarking across different suppliers or areas of a company, to ensure variations in general performance can be identified. Cost reduction takes place when good habits are identified and then shared while negative practices are got rid off and / or re-engineered. An illustration worth sharing is where the total cost for every retail outlet of advertising spend resulted in local accents being used for television adverts. 5 The Value of Operations DataCost differences among alternative products or services that are exactly the same as the very first item are typically straightforward to measure. But, where a substitution has got a completely different expected overall performance, the validation associated with a price difference is much more problematic. Studying the total cost of ownership is possible by using operations data files which as well as verifying cost differences might also realise more potential opportunities. For example, these types of total cost opportunity scenarios can occur where a brand new additive is used that is two times as successful as the last one, or where the latest motor oil filtration system for a car or truck is claimed to be able to last x miles longer before buying a replacement, compared with the present filter. Modelling Knowledge in Procurement In all cases category managers really need to start thinking about which value levers are going to produce new business opportunities for obtaining more benefits and what kinds of ‘Procurement Ready’ knowledge will help to identify and then quantify those opportunities. Supply Chain FootprintsThis requires mapping first level vendors and also establishing the geographic regions from which they supply the company. The next task is to map other layers of the supply chain and associated production addresses. Determining all these addresses means that major logistics risks can be managed this includes assurance of supply; standing and naturally, commercial costs. Purchasing Consultants is a original database for new info about where to do it. 6 Revenue & Profitability OverlaysBy reviewing end product sales revenue and also earnings overlays you'll be able to detect target areas where procurement activity will be used to help support and / or boost current levels of sales and profit. To compare additional information, consider checking out procurement consultant. The attention is now on the combined costs of the finished products or services. At this stage individuals from various other departments are almost always invaluable in helping to validate opportunities to decrease cost. By working in this way, cross category possibilities are usually discovered that may not have already been identified by using a individual category focused method of operating. 7 Supplier Perception DataThis is structured qualitative responses from suppliers and internal stakeholders on the present condition of a relationship. It identifies instances of weakness and potential areas for improvement when it comes to relationship quality. It helps to identify exactly how important the organization is as a customer to the supplier. Common topics asked about includeAre your systems aligned correctly? How successfully does the working relationship work? How well are the organisation’s business needs currently being delivered through the relationship? What improvement business opportunities are available? Using this feed back and accepting it is not necessarily easy but category managers will find it very helpful whilst discussing strategy. 8 Overlaying Market DataIndustry information and facts that include utility costs, metals prices, chemical costs, labour rates etc. must be made available to relevant purchasing team members. This might be because the business is directly buying the commodity in question, or it is a key component in a supplier’s cost base and the organization should observe a change in that cost base. 9 The Profile of ConsumptionWherever seasonal demand profiles can be found they have to be planned for and evaluated. This empathic approach with suppliers will help your SRM (Supplier Relationship Management) as their needs are better understood and also planned for. Summary & Recommendations for ActionYou might at this stage want to take a look at the Knowledge Hub run by Future Purchasing Procurement Consultants UK. which has a great deal of related information. Having a higher quality “Procurement Ready” knowledge base, developing a strong category strategy is quicker and easier. As a result this encourages increased momentum for change. A ‘Procurement Ready’ base of knowledge is among the differentiators between Category Management Leaders and Followers and contributes to the 46 extra cost savings which Frontrunners enjoy compared to Followers. Making certain that all of the category managers follow the exact same approach is essential so the approach must be planned to ensure consistency. The foremost forward thinking businesses have champions of this methodology whose role it is to ensure that the procurement knowledge database is always up to date ,liberating the category management team to make use of the knowledge in their strategic thinking. Quite possibly the most effective way we have experienced “Procurement Ready” knowledge bases be put together and developed is where Procurement prioritises the need for this capability and establishes a plan to achieve it. Making category management a primary business competence of modern procurement departments should be a main priority. Multi-site businesses from the private sector and large gov departments in the public sector must have “one way of working” effective at unlocking value in a very quick and versatile manner. Following the method above will bring about an organisations step change in delivering value. Selecting the right procurement consultancy that can help you throughout the process is often the best way to go and avoiding the countless stumbling blocks out there..