There are various ways to organise the procurement of resources to handle specific areas of spending. Category management plan is an ideal strategic program that aims to reduce the risk in the supply chain and the cost of buying specific goods and services. It likewise aims to gain access to better innovation from suppliers and an overall increase in value from the supply base.
But how do you manage each category? According to Forbes, the Procurement Leaders have seven different steps right within the category management.
1. Opportunity identification relates to the understanding of the business and its needs. Buyers should be aware of who the key stakeholders are, along with the amount that they are willing to spend.
2. Opportunity development discusses the buyer’s mindset and how he or she understands the ins and outs of the supply market. The buyer should also be able to identify the means of the supply market and address its internal needs.
3. The buyer can then finalise the strategy once he or she has determined which sourcing method will best help the company position itself in the market.
4. The buyer should then be able to screen suppliers by identifying which key players within the market possess the needed capability. One tip that most experts would give buyers is to reach out to companies with whom they have yet to make a direct relationship.
5. Buyers must then formulate the best means for suppliers to express their intent in sustaining the contract and propose business plans to meet the demand of the market. Doing auctions and RFPs is an ideal way to create business proposals to meet those specific needs.
6. The company can then shape and negotiate the proposals once the bids have been received. The company also has a chance to further enhance the offering to add more value to it.
7. It’s then up to procurement to implement and manage the suppliers to ensure that the contractual terms are satisfied, and the suppliers will continue to develop and enhance the relationship.
The overall process must be evaluated once each process has been completed. It’s always best to learn from an institution that provides a more concrete and detailed service regarding procurement to help you achieve your financial goals, especially when it comes to business.Tags: Business, Management, management plan