01 Oct Category Management, Ongoing Savings
World Class Category Management for the consumer packaged goods sector.
Category Management should always be concerned with asking, “What are your distribution experts delivering?”
Consider how ‘one-off’ savings initiatives do not address systemic root cause issues when dealing with total cost of ownership challenges. Your first improvement challenge; continuous monitoring of the market and supplier performance. Utilize experts who know category management, do they… Know the supplier community, analyze detailed ‘spend’ by core suppliers (Pare do analysis meaning 20% suppliers contributing 80% of total spend), are they familiar with transactional and pricing data, and do they continuously monitor the supply markets?
Next, your dedicated category management experts should identify and implement; solutions to further reduce maverick purchasing while driving incremental unit-cost reductions through additional sourcing of; appropriate specification changes, substitution(s), better demand management, and actively target cost-avoidance opportunities in appropriate commodities.
Last, make sure your category management team improves supplier compliance and performance. Seasoned category managers constantly monitor a number of key metrics and produce quarterly supplier scorecards to ensure suppliers are performing at the highest level. Your category CPG scorecards should include; spend, savings, transaction volume, operations, and quality metrics.
Category Management Punch List
- Calculating spend vs. plan (compliance)
- Quantifying realized savings vs. plan
- Measuring reliability and responsiveness (Demand seasonality, promotion lift)
- Tracking electronic transaction (PO, POA, ASN, Invoice, Credit, Return), accuracy, and timeliness
- Recording order fill rate, fill-cycle times, and freight-term compliance
- Identifying exceptions by reason type (Incorrect items, damaged, coverage etc.)
If you are interested in learning how the expertise of CPGBrokers.com can be of benefit to you and your business in the consumer packaged goods arena, please contact us for a no obligation review of your current distribution channels and category management initiatives.
- New Terms on Time Invoice Delivery and Payment Software Helps Suppliers Get Paid on Time (prweb.com)
- Market Conditions are Ripe for 20-60% Savings on “Niche” Industrial Services (spendmatters.com)
- Ten Tips For Pursuing Complex Category Management as a Core Cost Reduction Strategy (enterpriseirregulars.com)
- Other Category Management stories from CPGBrokers.com (cpgbrokers.com)