Tag: Category Management Process

Category Management Process

Developing an 8 Step Category Management Process for a Medical Devices Supplier in the US

The medical devices market in the US is expected to offer a wide range of opportunities for companies. However, companies need to integrate innovations, streamline their operations, and reduce costs to survive in the medical devices market. They also require category management process that would offer incremental category benefits and reduce costs.

The Business Problem

The client is one of the fastest growing medical devices companies in the United States with an annual revenue of over $5 billion. They were looking for opportunities to identify the typical levers that can be deployed to maximize the incremental value of the organization and support appropriate resourcing. However, the strong preference for a particular product category by buyers (doctors, nurses) was inhibiting the client’s capability to better understand the medical consumables category. The clinical difference and price difference were a few other reasons that were obstructing the organization’s growth prospects.

Improving the category management process is critical for companies to maximize the incremental value. Request a free proposal and access our service portfolio of category management solutions.

Solutions Offered and Client Journey

To compete with top companies and address concerns of stakeholders, the medical devices supplier decided to engage with SpendEdge. The team of analysts at SpendEdge conducted a continual analysis to keep the client ahead of trends, risks, demands and supply changes. They also gained in-depth insights into the demand structure for goods and services used by the company and recommended an 8 step category management process to avoid the wastage of money by the medical devices supplier. In addition, the experts also worked closely with suppliers to help the client continuously innovate and achieve better outcomes.

SpendEdge’s team focused on improving category management process and implementing cost down improvement initiatives to help the client  achieve high profit margins. They enhanced supplier performance management and explored alternative mechanisms to verify current pricing against alternative suppliers. This helped them to create an environment that delivered the lowest long-term cost structure.  The category managers further identified the lowest total cost procedures and centres of excellence for the  medical devices supplier and helped them achieve the same outcome at lower costs.

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Key Findings and Outcomes

Achieved Savings

The progression from the initial sourcing of the medical consumables category through various levels of category management helped the client to achieve savings of over 17% in a year. Furthermore, implementing an 8 step category management process helped the medical devices supplier to achieve an incremental cost reduction of 2-3 %. Also, the category management process ensured that savings are sustained and costs continue to reduce in the coming financial year.

Improved Visibility into Spending

The category management process enabled the medical devices supplier to establish a single point of contact within the organization and improved coordination. This helped the medical devices supplier to figure out the accuracy of the reported spend.  Want to gain detailed insights, request for more information.

8 Step Category Management Process

Category Management Process

The 8 step category management process is highly beneficial for firms and encompasses all important strategies. It helps businesses to establish their brand as a true leader in the category and differentiate from competitor companies.

Define Category: This step is the most crucial step as it defines the understanding of buyers. It identifies the criteria on which buyers make their decision while procuring medical devices.

Category Role: Role identifies the importance of the category to the buyers. There are nine commonly recognized categories in medical devices that can be identified according to their relevance in healthcare equipment.

Category Appraisal:  Analyzing how these medical devices perform across different healthcare units is the next step in 8 the step category management process. It includes pricing and placement assessment apart from the affordability factor.

Category Scorecard: It assesses patient data and identifies devices critical for their health. Scorecard also helps companies in setting up measurable targets in terms of sales, volume, margins.

Category Strategies:  Category strategies are outlined to meet the scorecard objectives. A framework suggesting for marketing is created and the supply of medical devices is ensured.

Category Tactics:  Tactics involve specific actions needed to achieve the desired outcomes from set category strategies. Category tactics ensure that strategies are put on the right track.

Plan Implementation: The success of this 8 step category management process depends on the implementation of category plan as per the laid objectives. The plan involves a systematic schedule to achieve the objectives.

Performance Assessment: This is an on-going process that analyses, measures, and reviews the results. It helps medical companies refocus and improve existing electronic, surgical, and medical equipment.

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Attaining $20 Million in Savings Annually for a Food Retail Industry Client – SpendEdge’s Category Management Engagement

Why Incorporate a Category Management Strategy?

A category management process helps in the in-depth analysis and assessment of the supply market. With the aid of a category management process, businesses can evaluate sourcing destinations, monitor supplier performance, and facilitate an overall effective category planning cycle. A category management process also helps organizations to leverage the demand across the enterprise to achieve maximum savings.

Moreover, a category management process is all about focusing on a broader scope and the complete lifecycle of the products and services involved. A category management strategy entails more comprehensive internal customer management with the goal of constructing solutions that support business objectives.

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Food Retail Industry Overview

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Category Management: What Are the Key Elements to Underpin Success

What is category management?

Category management techniques are used by companies to optimize the oversight and allocation of resources by organizing related products and resources into logical groups. This makes it easier to effectively manage these resources. Category management strategies are aimed at providing customers with what they want, where they want it, and when they want it. In order to achieve this, products are grouped into categories according to how they are used, consumed or purchased.

Category management in procurement helps an organization retain a focus on the most important business categories, typically in terms of profits generated and/or resources used. Value-based categorization may be determined through ABC analysis. It can also help in strategic sourcing, an approach to supply chain management that helps leverage the company’s purchasing power and find the best possible values in the marketplace.

Essential elements for the success of category management

If done correctly, category management can deliver far-flung and immense value in procurement. However, implementing a successful category management strategy is easier said than done. The much far-reaching and broader scope of category management makes it imperative for enterprises to have the right foundational elements without which they will struggle to drive meaningful, long-term results:Contact US

Organizational design

Designing an effective and optimal procurement organization is a fundamental process that enables enterprises to meet their business and procurement needs. To achieve this, companies must consider a number of key factors including, ongoing category management program, CRM approach, centers of excellence (CoE), and tactical buy desks. Deploying shared service centers or procurement-led CoEs to assist with tactical spend activities is another option that can be considered. Most enterprises today even have a procurement BPO provider to support their tactical sourcing.

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