Category management
One taxonomy, and everything codes against it.
Category management fails when the categories are inconsistent. Here one tree is defined once and used by every request, order, contract and report. Spend by category becomes a fact, not a reconciliation exercise.
The taxonomy
Defined once, used everywhere, reported without mapping.
The categories are not a reporting layer bolted on at the end. They are chosen on the request and carried by everything that follows it.
- One treeCategories are defined by the organisation and used by requests, orders, contracts, suppliers and every report
- CodesThe full UNSPSC codeset, all 158,463 codes, loads by default; your provider can leave out segments a workspace never buys in
- OwnedA category can be switched off when it is no longer used, without rewriting the history coded to it
- HonestSpend by category needs no mapping step, so nobody has to trust a spreadsheet nobody has checked
CategoriesThe tree every record codes against.
For the category manager
See the whole category, not one purchase at a time.
A category manager's first problem is finding out what the organisation actually buys in their category and from whom.
- SimpleRead total spend in the category, by supplier and by department
- ThenFind the same thing being bought repeatedly in pieces too small to compete
- ThenPlan the category on the forward pipeline, with target dates and values
- ComplexGroup related demand into one competition and put the outcome on a standing arrangement
Procurement planThe forward plan, by category and target date.
For a procurement director
Where the money is, and where the attention should be.
Category strategy is an allocation decision: a limited team against an unlimited list of things that could be sourced better.
- SeesSpend concentration by category, and how much of it is under contract
- SeesWhich categories are served by one supplier and which by forty
- DoesDirects sourcing effort at the categories where it will actually pay
- ProofCategory performance is measured on the same data the buying runs on
Spend analysisSpend by category, supplier and department, over real volume.
For a CPO
A benefit claimed against a category has to be traceable to it.
Savings that cannot be tied to a category and a baseline are the reason finance does not believe procurement's numbers.
- SeesSavings by category, and by whether they are forecast, realised or validated
- SeesThe baseline and the method recorded against each claim
- DoesReports value on figures somebody outside procurement has agreed
- ProofThe same category tree carries the spend and the saving, so the two can actually be compared
Savings & valueClaims by type and category, in their three states.