Insight Guide

Value is maximised when there is

internal alignment between the
organisation and Procurement.

Simon Brown
Director, Future Purchasing

Five Laws of Category Management (Part 1)

Director with 27 years

experience in Procurement line
management and senior
consulting roles.

First law: "Value maximised is directly correlated with

internal alignment and influence."

Simon leads the category

management practice
delivering consulting
assignments in process design
excellence, training, coaching,
facilitation and delivery for
organisations looking to
embed category management
as a key business discipline.

Types of Value

Outcomes
Led Focus

Category management is the fundamental anchor of modern

procurement practice. Our definition of category management is "an
agreed structured process to realise and maximise value across
categories of expenditure".
Value from category management is maximised when internal
alignment between business stakeholders and Procurement
facilitates the pursuit of the same sources of value.

Sources of Value

Levers of Value

Outcome based decisions

Integrated category plan

Facilitated collaboration

Collaboration & consortia

Environment sustainability

Reduce carbon footprint

Boost local economies

Support small suppliers

Improve innovation

Access supplier resources

Risk mitigation

Risk analysis

Improve quality levels

Conformance to spec.

Improve performance

Supplier scorecards

Specification improvement

Simplify & standardise

Volume leverage

Consolidate volumes

Demand management

Compliance to contract

Price improvement

Price & cost analysis

+
Broader
Value Up

+
Traditional
Cost Down

Copyright 2002 - 2011, Future Purchasing Consulting Ltd. All rights reserved.

There are three types of value as shown in the diagram on the previous page:
1. Outcomes led focus examples include the need to boost local economies, environmental needs and
collaborative approaches.
2. Broad value enhancement such as reducing risk in these troubled times, improved quality or
performance levels or greater levels of innovation.
3. Traditional cost down aggregated and leveraged volumes, lower prices, improved forecasting or reengineered specifications.
These are best achieved when there is a clear and unequivocal alignment between organisation objectives and
Procurement objectives.

Contact Us
For more information on
implementing Category
Management, please contact
Simon Brown on :
+44 (0) 7961-110529 ,
or email
sbrown@futurepurchasing.com.

Category Management
Making category management a core business
competence of modern procurement is a top priority.
Multi-site companies in the private sector and large government
departments in the public sector require one way of working
capable of unlocking value in a fast and flexible manner.
Category management is the heartland procurement process to
deliver this value. FP is an acknowledged expert in the design,
adoption and practical application of this key business process.
Find out how Future Purchasing can support your initiatives in
procurement transformation, cost reduction, category management and
performance learning by visiting our web site here:
www.futurepurchasing.com

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enquiries@futurepurchasing.com
www.futurepurchasing.com
+44 (0) 1483 243520

Copyright 2002 - 2011, Future Purchasing Consulting Ltd. All rights reserved.