We all have often looked over the fundamental resources and data to which Category Managers need access. e.g. spend by service provider, category, small business unit etc. -- there is also a really good example mapped out further down. To check up additional info, we understand you take a peep at procurement consultants uk. As we have pointed out, this data is often much less readily obtainable as would be preferred. Yet, it’s absence is unquestionably recognized and reported by the Category Managers that must play ‘Spreadsheet Detective’ in an effort to manually bridge the information gap! At the moment we are turning our focus to a 2nd tier connected with category data that has not been documented or codified so far as we're informed. This kind of second level data is of a granular variety and may vary considerably between categories significantly when even the most simple queries have not already been addressed. This gives genuinely really advanced understanding and category strategies that fully connect with the business enterprise. In many cases this can lead to far more informed negotiations on terms, improved cost control, greater capture of company innovation and also pinpoints even more options available to get value growth. Category Management Knowledge comes in numerous differing ways We have recognised Ten kinds of Tier Two category specific information1 Breakdown the CostCost breakdown or PPCA activity determines the key cost elements that are suffered by the supplier providing a service or product. By calculating the Percentage share of the supplier’s price that is likely to be attributable to each cost element, side by side somparisons can be made across suppliers. Of course, using this method also helps prevent making assumptions and will help to understand not only what makes up almost any particular price as well as exactly what drives it. One example is, where logistics is a high of the overall cost price then a rise in gasoline prices will almost certainly affect the total cost. 2. Specification MappingSegmenting spend down into categories and even sub-categories is sufficient when calculating prospective savings. However, while discovering potential opportunities during the development of a category strategy, it's really important to review spend in greater detail. This involves the examination of the specific part numbers as well as services purchased, determining the technical specifications and/or effectiveness behind them and linking all of them to the relevant costs and amounts. This information will enable detailed Value Analysis activity to be succesfully done. For example, this could be linked to the performance specification for part numbers of electrical components, departure schedules for defined air travel sectors, or the addresses associated with high-street network branches getting alarm system reactive maintenance. 3. End Product LinkageThis requires an understanding of which sub-categories provided by the supplier are used in which finished products sold to consumers and then making this visible to the supplier. Just one of the plus sides of this for your supplier is that they are much nearer to the thinking of the consumer. This could be powerful while discussing an improved cost price. 4 Unitisation & BenchmarkingBreaking costs right down to the individual unit assists you to determine a benchmark value. Spend is simply divided with a variable which is relevant such as height or even customer opinions. Using this method several suppliers are able to be evaluated against each other and differences acknowledged. Cost reduction takes place when excellent habits are identified and shared whilst bad processes are eliminated or re-engineered. A good example of this method used by us, was the analysis of unitised total FM costs in each m2 across eighty depots for a British coach business. 5. Operations Data OverlayCost differences relating to alternate products or services that are exactly like the original product are almost always straightforward to evaluate. Obviously, pinpointing pricing differences where a substitute product or service is different is more challenging. Studying the overall cost of ownership can be carried out with the use of operations data which as well as validating pricing variations may also realise additional business opportunities. A example of these benefits includes situations such as in which a electric battery is identified as lasting for a longer period compared to the old one or where a different active ingredient increases life expectancy by 20 more. The ‘Procurement Ready’ Knowledge Model In all cases category managers will need to start thinking about which value levers will definitely provide brand new opportunities for getting more benefits and what kinds of ‘Procurement Ready’ data can help to discover and quantify those potential opportunities. The Supply Chain FootprintThis involves mapping first level vendors and finding the geographic locations from which they supply the company. One step over and above this is to chart the location of smaller suppliers and more importantly where merchandise involved in the chain come from. This knowledge of vendors and production locations in the supply chain enables supply risk (e.g. assurance of supply), reputation risk ( e.g. suppliers CSR practices) and commercial risks (e.g. switching costs) to be revealed and managed. 6. Revenue & Profitability OverlaysFinding areas where procurement teams are able to make improvements to cost prices and/or sales revenue over the course of category reviews is required practice. Navigating To supply chain procurement seemingly provides suggestions you might give to your father. The attention is now on the consolidated costs of the completed products or services. During this period people from several other departments tend to be crucial in helping to authenticate opportunities to help reduce price. By working in this way, cross category possibilities will also be identified which might not have already been identified when using a single category targeted method of operating. 7 The Suppliers View on Data Measuring a supplier relationship can be carried out both internally in the business but also, even more importantly by the suppliers theirselves. It detects areas of weakness and potential areas for improvement in relationship quality. It helps you to identify exactly how significant the organisation is as a customer to the supplier. Typical topics covered may includeAre your tactics aligned? Is the business relationship with the supplier functioning well? How well are the organisation’s commercial needs being delivered through the business relationship? Have any potential opportunities not been identified? By having these details at your disposal and plainly linked to the relevant categories, improvement opportunities can be made visible, included inside category strategies and implemented. 8 Overlaying Market DataBypassing essential sector information including futures trading prices would probably clearly be a mistake. This might be because the organisation is directly purchasing the thing in question, or it's a key element of a supplier’s cost base and the organization should observe a change in that cost base. 9 Consumption Profile This can be beneficial to understand if the organisation has got an end customer demand profile that isn't flat, and can vary during the year. By mapping this demand profile and consequently considering its effect on particular suppliers, more details could be given to them, more robust relationships developed and more strategic negotiations started. Next Steps and InsightsYou may at this stage like to take a look at the Knowledge Hub operated by Future Purchasing Category Management Consultants. Dig up new info on this partner article by clicking source. that has a wealth of related information. With a higher quality “Procurement Ready” knowledge base, developing a formidable category strategy is quicker and easier. Consequently, this builds greater momentum for change. Investing in this methodology is a hallmark of prominent category management exponents and frequently can lead to over 45 more savings than those whose methodology is less demanding. To be able to start using a “Procurement Ready” base of knowledge our recommendation is that a standardized process is developed and trained to ensure that a language is established across the procurement team. A further enhancement we have witnessed, at leading organisations, is to create a specialised function within the procurement team specialising in creating this data -- releasing category managers to focus on building superior category strategies, much faster. One of the most successful way we have experienced “Procurement Ready” knowledge bases be created and developed is when Procurement prioritises the desire for this capability and creates a plan to make it happen. Ignoring Category Management in modern day procurement departments isn't an option and should be prioritised. Multi-site businesses from the private sector and large gov departments within the public sector have to have “one way of working” effective at unlocking value in a very fast and versatile way. Using a ‘Procurement Ready’ strategy is a key basis to generate outstanding value more quickly. Procurement Transformation includes extra resources about the purpose of this hypothesis. Selecting a procurement consultancy that can help you through the entire process is often the easiest way to go and staying away from the countless hurdles out there..