A Private Label Olive Oil Manufacturer Realized Millions in Savings Through Category Management

A Private Label Olive Oil Manufacturer Realized Millions in Savings Through Category Management

How to Develop a Category Management Strategy?

With the right category management strategies in place, you can open up a whole new host of opportunities for your business. But before delving into the process of developing a strategy around your category its essential to take a step back and better understand the term ‘category management’.

For those looking for a detailed definition for category management here’s one:

‘Category’ essentially refers to a group of similar goods which the company wishes to buy under a single deal. The term management here deals with the application of procurement methodologies to ensure the firm maximizes savings, which means a category management strategy is the best solution for your business as it encompasses all the strategies needed to make your brand successful.

Steps to create a winning category management strategy:

  • Decide on your category definition and role
  • Analyze all the available datasets
  • Decide on your strategy and finalize it
  • Shape and negotiate proposals
  • Implement the category management strategy and manage suppliers

SE Demo

About the Client

The client- one of the leading private label olive oil manufacturers in the US. This company is headquartered in New Jersey and consists of a 500+ professional team of experts who possess several years of experience in the oil manufacturing segment.

Client’s Challenge

With the ongoing deregulation and growing demand for olive oil across the globe, several olive oil manufacturers in the USA initiated aggressive expansion plans resulting in a demand-supply mismatch across the corresponding supply markets. As olive oil manufacturers continue to engage in protection policies and trade wars the tense situation in the global market space continues to disrupt the global supply chain. This requires olive oil manufacturers to adopt a new procurement and category management strategy to meet their business goals and objectives.

The client, a leading olive oil manufacturer and supplier with multiple manufacturing units spread across the US, wanted to conduct a systematic request proposalanalysis of their sales productivity, cost-effectiveness, and customer metrics. The client faced major issues in achieving growth and addressing margin problems, this prompted them to collaborate with SpendEdge to leverage its expertise and implement a best-of-breed category management process across all supply chain categories, a part of which involved devising a new category management strategy to identify and negotiating with key suppliers.

Engagement Overview

SpendEdge’s team of category management specialists tailored a market specific category management process to help olive oil manufacturers to improve sales and change the basis for negotiations. The research approach included primary and secondary research coupled with qualitative and quantitative data analysis methodologies. This engagement also enabled the client to analyze the value-chain to understand the breakdown of costs for each category and identify effective pricing strategies.

Key Findings

The devised category management strategy enabled the olive oil manufacturer to save about $15M within three months of implementing the new category management process. On the supply chain side, the savings ranged between 10%-15% which helped them save an additional $5M across different categories.

SpendEdge’s smart procurement solutions offer a competitive advantage by simplifying the way you deal with sourcing and procurement. Get in touch for actionable insights!

Contact US

Request free proposal