HIGH-PERFORMANCE. From sliced bread to old hat 13 October 2016 PROCUREMENT. 2015, GEP. All Rights Reserved.

Transcription

1 HIGH-PERFORMANCE PROCUREMENT From sliced bread to old hat 13 October , GEP. All Rights Reserved.

2 Starting with a definition Category Management is a strategic approach which organises procurement resources to focus on specific areas of spend. This enables category managers to focus their time and conduct in depth market analysis to fully leverage their procurement decisions on behalf of the whole organisation. The results can be significantly greater than traditional transactional based purchasing methods. Source: CIPS website 2

3 Category management is a game changer for Procurement the best thing since sliced bread Procurement Maturity Journey Strategic Value-Add Proactive Reactive Discovery Supply Assurance/ Fulfillment - Buyer <65% spend under control <1.5% savings <20% procurement employees that are strategic Supply + Price Assurance Negotiator Lowest Price to Lowest TCO Supply Expert Category management is a key enabler maybe the key enabler in moving Procurement up the maturity curve Value Generator Business Partner >80% spend managed >5% savings >40% procurement employees that are strategic 3

4 At its simplest level, category management is an organisational approach Procurement Category 1 Category 2 Category 3 Category n Advantages Allows focus Aligned to external supply markets Disadvantages Creates silo thinking Sometimes misaligned with internal organisation and individual suppliers 4

5 but when done well, category management should make itself felt throughout the source to pay cycle Source to Contract Source to Pay Procure to Pay Business Partnering Supplier Performance Mgmt. SRM Module Project/Savings Tracker STC Tools Spend Analysis Category Strategy Development Supplier Payment (A/P) Electronic Payments On-line Catalogs PTP Tools Raise a Request Buyer Portal Contract Lifecycle Mgmt. erfx/ eauction Invoice Management Electronic Invoicing Integrated P2P tool Place Order Contract Management Sourcing Execution Closed Loop Source to Pay Receive Goods/ Services 5

6 The barriers to truly excellent category management are multiple.. Challenges Spend visibility Definition of category Full visibility of spend by category Stakeholder relationships Spend control Market intelligence Technology silos Buying channels Tail spend Influence of Procurement Procurement mandate Maverick spend Multiple categories Mutable global supply markets Different tools do not talk to each other Full visibility of spend by category Drive compliance to preferred vendors/contract User-friendly buyer portal Fragmentation of spend Low value purchases Illustrative 6

7 whilst the solutions are not necessarily category aligned Solutions Spend visibility Stakeholder relationships Spend control Market intelligence Specialist spend visibility technology Increased automation Focus on business partnering Category strategies not just sourcing focused Policy reviews Enhanced P2P processes and technology Centre of excellence for core categories Leverage specialist providers Technology silos Integrated procurement technology Buying channels Tail spend Buying channel optimisation Automation and thresholds Data mining Requestor challenge Illustrative 7

8 Which brings us full circle to the limits of category management is it becoming a little old hat? Procurement Category 1 Category 2 Category 3 Category n Category strategies Supply market intelligence Strategic sourcing Buying channel optimisation Business partnering Procurement process excellence Procurement technology Illustrative 8

9 GEP is a diverse, creative team of people passionate about procurement. We invest ourselves entirely in our client's success, creating strong collaborative relationships that deliver extraordinary value year after year. We deliver practical, effective procurement services and procurement technology that enable procurement leaders to maximize their impact on business operations, strategy and financial performance. Honored as Best Supplier at this year s EPIC Procurement Excellence Awards, GEP regularly wins accolades as both a provider of a broad range of procurement services and innovative procurement technology. Among its recent distinctions, GEP has been named Leader and Star Performer in Everest Group's PEAK Matrix of Procurement Services Providers, Leader in NelsonHall s NEAT Matrix of Global Procurement BPO Service Providers, Winner in the HfS Blueprint Report on Procurement Outsourcing Providers, Leader in the Kennedy / ALM Vanguard Report on Procurement Consulting, as well as one of Spend Matters 50 Companies to Know and to the Supply & Demand Chain Executive 100. Clark, NJ-based GEP has 12 offices and operations centers in Europe, Asia and the Americas. To learn more about our comprehensive range of consulting and outsourcing services, please visit For more about SMART by GEP, our cloud-native sourcing and procurement software platform, please visit Access our free knowledge resources at Walnut Avenue, Clark, NJ P info@gep.com Clark, NJ Princeton, NJ London Prague Mumbai Hyderabad Shanghai Mexico City Costa Rica São Paulo Singapore Sydney Copyright 2016 GEP. All rights reserved. 2015, GEP. All Rights Reserved.