There is no single version of truth, and each person gives his or her own perspective.
First, what is a Category? A Category is a grouping of similar products or services available from a supply base. Category Management is the process of creating a strategy to buy these needed goods or services on behalf of the company or a subset of the company over a defined period, often 3-5 years.
Category management is much more than selecting suppliers. It includes the sub-processes of strategy development and approval, supplier value realization, and supplier management.
Category management is an intellectually curious process of exploring current and future company requirements and how this may change. It also asks the deeper question of why the category is needed. We ask those questions as those needs will change over time.
Not long ago, if you bought a washer, dryer, or refrigerator, those products were shipped individually in corrugated boxes. Manufacturers sought to avoid waste and optimize costs by eliminating corrugated boxes, opting instead for a lean packaging solution. Similarly, category management thinks more broadly and asks, what is the purpose of a category, and are there other ways to address these needs?
Years ago, I worked on a category called Medical Rubber. Labelling the category, ‘medical rubber’ was limiting. Rubber is difficult to buy in the medical field because of the constrained supply and added complexity of regulatory requirements. After a conversation with the stakeholders, we relabeled the category as “flexible seals.”
All of a sudden, the category is not just about rubber. The category team considered different types of plastic resins in addition to medical rubber. There are multiple supply choices for flexible plastic resins that also tend to be cleaner and easier to certify.
Read more about The Global Category Manager’s Handbook