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Category Management (L5M6)

Module Purpose

On completion of this module, learners will be able to evaluate approaches that can be adopted to develop category management of both direct and indirect organisational expenditure and plan for the associated strategic processes.

Module aim(s)

Category management involves applying the end-to-end procurement process to a specific range of goods or services. This involves preaward processes such as category analysis and demand management, sourcing and contract negotiation, and the post-award processes such as performance management. It is essential that those involved in managing procurement and supply activity can evaluate approaches to develop category management and are able to create process plans which ensure category management success. This module is designed for those who have responsibility for category management as it focuses on the differing approaches for category management using the tools and techniques which are available to assist with the creation of the associated processes for direct or indirect expenditure.

Next steps

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Key Module Details

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Icon showing the letters OR, with OBJECTIVE RESPONSE EXAM written below the green-bordered circle.

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Learning outcomes, assessment criteria and indicative content

1.1 Critically compare strategic and conventional sourcing processes and their role in category management

1.1.1Defining strategic sourcing and category management
1.1.2The stages of a conventional sourcing process
1.1.3Transactional and strategic sourcing activities
1.1.4Differentiating account management and category management

1.2 Critically compare models for the adoption of category management

1.2.1Models of strategic sourcing such as AT Kearney’s 7 step model
1.2.2Models of category management such as the CIPS Purchasing and Supply Model and CIPS Category Management Model
1.2.3Analysis of similarities and differences between models for strategic procurement, strategic sourcing and category management

1.3 Identify the technical and behavioural skills required to implement category management

1.3.1Technical skills such as financial management and cost analysis, supply chain analysis, supply base research, sourcing processes, risk management, legal aspects and negotiation
1.3.2Behavioural skills such as communication, influencing, working with teams, cross functional working and change agents

2.1 Contrast the types of expenditure that can be analysed for category management processes

2.1.1Expenditures that are related to direct costs
2.1.2Expenditures that are related to indirect costs
2.1.3Applying Pareto analysis to expenditures and key suppliers

2.2 Compare and contrast the tools and techniques that can be applied to map categories of direct and indirect expenditure

2.2.1Matrices
2.2.2Supply chain mapping
2.2.3Porter’s 5 forces model
2.2.4Market share/market growth
2.2.5STEEPLED and SWOT
2.2.6Technology route maps

3.1 Analyse the data required for the development of a category management process

3.1.1Historical and forecasted data on categories of spend
3.1.2Demand patterns for category groups
3.1.3Current contracts with suppliers and terms that are being applied
3.1.4Reviews of existing relationships and performance
3.1.5Market trends

3.2 Examine the requirements for initiating and preparing the introduction of a category management process

3.2.1Producing category hierarchies for both direct and indirect expenditures
3.2.2Applying portfolio tools to map the categories of expenditures
3.2.3Creating total cost models for category management
3.2.4Conducting stakeholder needs analysis
3.2.5Forming cross functional teams and preparing responsible, accountable, consultative, and informing roles within the team
3.2.6Reviewing the implications of existing legislative requirements and standards

3.3 Analyse supply market factors that impact on the development of a category management process

3.3.1Analysing industry dynamics, competitiveness, and pricing behaviour
3.3.2Analysing financial data on potential suppliers
3.3.3Using requests for information (RFIs) to assess market factors
3.3.4Conducting impact assessments of CSR/sustainability factors
3.3.5Conducting supply chain and value chain analysis
3.3.6Analysing supplier perceptions

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Four core modules make up 42 of the required credits for this qualification, choose three elective modules to make up the 18 remaining credits