Category Management
A strategic approach to procurement that segments spend into groups of similar products or services (categories) and develops tailored sourcing strategies for each. Originated in retail and adapted for corporate procurement.
Category management treats procurement as a portfolio of markets rather than individual transactions. Each category (e.g., IT hardware, professional services, facilities management) gets a dedicated strategy based on supply market analysis, demand profiling, and stakeholder needs.
The Category Management Cycle
- Category profiling and spend analysis
- Supply market assessment
- Strategy development
- Sourcing execution
- Contract implementation
- Supplier relationship management
- Performance measurement and continuous improvement