Embedding_the_Category_Management_Mindset_-_Denali_Group

Shelley Millis-Wight, Senior Manager 

Presented by: 

Conrad Snover, Partner

© 2014 Copyright Denali Sourcing Services Inc.. All Rights Reserved. 

2

§ The Era of Category Management is NOW 

§ Mindset: The 3 Category Manager Imperatives 

§ Operationalizing Category Management 


3

Expanding Procurement’s Value 

for The Global 2000 since 1996 

Procurement Transformation, Strategic 

Sourcing, and Category Management 

Sourcing, Contracting, Supplier Management, 

Analytics, Managed Source to Pay Programs 

Subscription and Custom Supply 

Market Intelligence 

Learn, Play and Reinforce: Category Management 

and Strategic Sourcing Training 

Staffing and Recruiting of Procurement Professionals 

3 year growth rate: 194% 


4

Category Management Era 

Strategic Sourcing Era 

Traditional 

Buying Era 


5

ü Needs assessed at the CATEGORY level across entire enterprise - 

not just by Region, BU, Plant, Supplier, or Project level 

ü Specialization – CMs are the Subject Matter Experts (SMEs) 

ü Challenges current state thinking – and develops a portfolio of 

potential solutions 

ü Adopts best-in-class category approaches 

ü Becomes a category thought leader as their time with category 

grows 

ü Strong relationship skills – “Salespeople of Procurement” 

ü Proactive versus Reactive 

ü Delivers or exceeds expected annual goals – stakeholder 

satisfaction, value/savings delivered, spend under management 


6

In conclusion: our major contract expires 

tomorrow, we have no idea what we want and 

no knowledge of the market. It is time to pass 

this across to the Procurement team… 


7

CM S C SM 

KNOW YOUR STAKEHOLDERS 

q Be with stakeholders - spend time (real/mental) with them every day 

q Intimately know their business objectives (AQSCI), the key 

enablers and barriers to those objectives; where value is created 

q Establish true alignment with stakeholders – establish shared 

goals, earn trusted advisor relationship 

q Sell your vision - fully aligned and integrated with stakeholders 

q Bring new opportunities to the table vs. react to requests or issues 

q Plant seeds with Stakeholders – this is an evolution; start one 

project at a time; build reputation, trust 

q Your category knowledge will grow with time, and your 

credibility with stakeholders… 


8

CM S C SM 

UNDERSTAND YOUR CATEGORIES 

q Get dirty with the data - become intimate with your category 

q Get to true insights - go beyond data – the “so what’s” 

q Drive and curiosity to seek insights and develop strategies 

q Be intentional regardless of the depth and category maturity 

q Be “in the market” – study market drivers/trends, talk to suppliers, 

participate in market events, read 

q Network with category peers in other organizations 

q Understand your suppliers – capabilities, performance, why you use 

them, leverage them 

q Knowledge grows with time – but should not delay execution… 


9

CM S C SM 

DELIVER RESULTS 

q Sense of urgency to deliver on goals (savings, stakeholder needs) 

q Know your targets by month/quarter, and have a plan to get there 

q Eliminate extraneous work - Make sure that all activities link 

directly to executing against intentional strategies 

q Don’t get hung up on templates, data analysis or status quo 

q Challenge business as usual … If not now, then when? 

q Leverage all available resources to reach your objectives 

q Press sourcing strategies for greater value (go to auction?) 

q Sustain the value by managing supplier relationships and 

performance 


10

1. Drives the overall vision and strategy of the Global Category 

and communicates it to all stakeholders. 

2. Hires, develops and enables the execution team for effective 

and efficient execution of category projects 

3. Removes all barriers for execution team to achieve objectives. 

CM Lead should delegate all other tasks to his or her team. 


11

" Securing a global supply base that meets company cost targets to 

manufacture a highly efficient vehicle to be the low cost leader in 

its market 

" Developing a new call center capability in a low cost South 

American country to meet the localization and customer service 

needs of your organizations growing South America presence 

" Meeting with your top IT service suppliers to brainstorm on how 

they can support a variable fee structure to support you 

organizations unpredictable demand patterns 

" When renewing your next outsourcing contract, embedding risk / 

reward incentives to ensure suppliers are vested in the success 

and outcome of the initiative that is a top 3 priority for your 

company 


12

" Finding new suppliers that can participate in your RFP. 

" Conducting spend analysis to understand your purchase 

price variance in IT services you have been purchasing over 

the last 5 years. 

" Running a competitive bidding process to create a preferred 

supply base for your sheet metal purchases. 

" Holding an impromptu supplier meeting to address ongoing 

performance issues 

Out-task this tactical work to a centralized team 


13

Nicole wants to hire a supplier to provide 

Negotiations Training for her team 

Option 1 – Do it herself 

• Nicole finds supplier on her own 

• Negotiates deal 

• Submits PO 

Option 2 – Engage Category Management 

• If Nicole is aware, she can reach out to Category Management 

team for support with her request. 

• Training Category is currently unmanaged, therefore it is not 

clear whether the team can support her request or recommend 

preferred suppliers 

Option 3 – Reach out to Buyer Team 

• If Nicole is aware, she can reach out to the US Buyer 

Team for support with her request. 

• Functional SPOC or Sourcing Lead will support Nicole 

as much as they can, but since the Category is 

unmanaged, it is unclear what support will be. 

Nicole has 3 primary options: 

1) Do it herself 

2) Engage Category Management 

3) Reach out to Buyer Team 

She may not know about option 2 or 3 


Key Takeaway – Engagement model with 

Procurement is unclear and without prior 

awareness, it is unlikely that stakeholders like 

Nicole know how to get support 

14

Nicole wants to buy something 

Nicole reaches out to a 

Centralized Sourcing Team (CST) 

CST works with Nicole to understand what she wants 

to buy 

• Requirements 

• Timelines 

• Budget 

• Preferences 

CPT decides on the best solution 

• Catalog Buy 

• Card Buy 

• Quick Buy from preferred suppliers 

• Quick Bid/SOW 

• Competitive Bid, Sourcing Event 

• Contract Negotiation 

• Strategic Sourcing Event 

CPT assesses the request 

• Nicole’s requirements 

• Complexity 

• Procurement Strategies & Guidelines 

• Policy & Best Practices 


15

Nicole’s Request gets assigned to the right operations team 

- Tactical 

- Strategic 

- Help Desk 

The assigned team engages 

Nicole for next steps and to 

• Explain Process 

• Agree on timeliness 

• Level set expectations 

• Explain engagement model 

• Agree on outcomes & results 

CST executes the request 

• Identify suppliers 

• Negotiate 

• Analyse and find the best value 

• Consult & agrees with Nicole 

• Consult & engage with GPP 

• Draft the contract 

• Execute the contract 

• Advise Nicole on next steps 

Category Manager is Happy 

• His category is executed based on his strategy 

• His stakeholders are happy 

• He got engaged at the right time at the right level 

• He can concentrate his energy to the right strategic events or 

strategy development 

• He receives feedback on what’s working, what’s not working, 

so he can include into his strategy 

He scaled himself to do more and watch his 

strategies make stakeholders happy and bring 

value to the organization 

Nicole is Happy 

• She received what she wanted and fast 

• She didn’t need to worry 

• Who the suppliers are 

• How to negotiate 

• If she’s getting the best TCO quality/ 

service/price 

• How to draft a contract 

• Follow all the policies 

• She even saved money on her budget 

All of these Services provided to her by the CST and 

she was involved at the right times and decision 

points and watched all happen very quickly on her 

behalf 


16

Business 

Stakeholders 

Category 

Manager 

Toolbox 

Centralized Intake 

Category 

Playbooks 

Processes / Systems 

Project 

Triage 

Sourcing 

Contract 

Supplier 

Mgmt 

Request Intake & 

Project Tracking Portal 

Centralized 

Sourcing 

Execution Team 

Operate within Client 

Procurement Ecosystem 

COE & Knowledge Management 


17

Conrad Snover 

Partner 

415.806.6726 

csnover@denaliusa.com 

Shelly Millis-Wight 

Senior Manager 

602.692.4074 

smillis-wight@denaliusa.com 


18

Embedding_the_Category_Management_Mindset_-_Denali_Group

Create successful ePaper yourself

Delete template?

Save as template?