Ensuring that organizations remain pertinent in the current scenario depends on category strategy management, which requires investment in relevant tools to streamline operations and achieve efficiency
RALEIGH, N.C., July 8, 2021 /PRNewswire/ -- For organizations to succeed in today's evolved world, a range of tools is required to develop and implement category strategies effectively. This is essential to maintain the healthier performance of suppliers and achieve enhanced business stakeholder satisfaction, among other objectives. It also provides insights into spending, which is critical to budget management. So, the companies that would otherwise look the other way must now invest in enablers to support their category strategy development.
"Category strategy development is crucial. It helps in strategy completion and communication, evaluation, benchmarking to compare performance and identify areas for improvement, and assessing the impact of best practices," said Valekumar Krishnan, Vice President at Beroe. "These tools are necessary for a systematic and linear formulation of business processes. Category strategy development becomes extremely challenging without these tools because of the many aspects that need to be considered to devise the perfect plan. Having these tools not only makes the process easier but also eliminates the chance of any error."
The category development process has multiple dimensions and steps to be followed for successful planning and execution. Initiation, the first step, involves creating a category profile, assessing the category position, specification analysis, spend & demand analysis, value chain, and aggregated cost analysis. The second step is strategy development, which includes:
Supply market Analysis
Evaluation of viable sources of supply and supplier opportunities
Supplier positioning matrix, SWOT Analysis, and profiling template
The 'Make vs Buy' decision
Identifying the category risk assessment parameters
Preparation of a consolidated risk mitigation activity
Supplier risk assessment and mitigation
Generating category strategy options
The last step in the exercise is execution. It involves strategy completion and communication, category performance evaluation, benchmarking the category activities with other companies to identify areas for improvement, and assessing the impact of adopting best practices after benchmarking.
Enabling category strategy development involves some processes. These include spend visibility, price benchmarking, price reduction, supplier identification, supplier risk management, and more. While industry subscriptions that offer price benchmarks and forecasts are required for price benchmarking, the price reduction can be enabled with eAuction tools to increase competition in bidding among suppliers. eSourcing tools can be used to identify category-specific suppliers. For market intelligence and category best practices, procurement intelligence firms like Beroe are good enablers. Similarly, supply base consolidation requires a spend analytics tool and supplier risk management can be enabled with supplier risk evaluation tools.
"Having an effective category management strategy is almost essential. And this requires a right set of tools that can help in conducting a thorough analysis and assessing the supply market, thereon assisting in developing the strategy," said Beroe's Valekumar. "The organizations who want to improve and realign their procurement models, which are critical in driving profitability, must attend category strategy development with priority. And this means they must invest in fitting enablers that support the creation and implementation of an effective strategy. This could be a challenge for some organizations in the current times when they are struggling with financial issues. But it's a challenge worth pursuing to achieve the desired growth."
For more such market insights, procurement intelligence, supplier analysis, supplier compliance and risk management, price and cost benchmarking, please log on to Beroe LiVE.Ai: https://www.beroeinc.com/beroe-live-ai/
About Beroe Inc
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions — leading to lower costs, greater profits, and reduced risk. Beroe has been providing these services for more than 15 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies. For more information about Beroe Inc., please visit https://www.beroeinc.com/.