Issue 7, March 2012

Nirvana: one contract, one way to spend

Every category manager’s dream is to have their whole organisation buying off the one contract.  One global resources company is one step closer to making this dream a reality.

Recognising the value that can be gained from organisational compliance to negotiated contracts, this organisation has implemented a global category management model that promotes compliance with system tools and global policy documents. By focusing on contracted spend as a major procurement key performance indicator, this organisation has increased its spend on system contracts, improved visibility of organisational spend in major categories and reduced its exposure to legal and commercial risks associated with off-contract spend.

To reinforce the behaviours that reflect this approach to category management, The Faculty has worked with this client to develop a Category Management framework which has been explicitly designed to manage governance and risk across its global spend portfolio.

The project involved developing a comprehensive guide to undertaking Category Management within this organisation’s systems environment, linking best practices in Category Management with the specific systems and policy framework. Providing a step-by-step guide for undertaking all aspects of Category Management, allows for flexible sourcing approaches that meet the organisations risk management parameters.

In addition, The Faculty has worked with this organisation’s procurement teams globally to provide best practice coaching on Category Management planning, strategy execution and supplier management. Encompassing the spectrum from understanding business and market drivers, to undertaking sourcing activities and developing a joint performance planning model, procurement personnel globally have adopted a consistent, comprehensive approach to the management of key spend areas that promotes security of supply and ensures compliance with internal policy documents.