In brief
Category management manages procurement by spend category, with its own strategies, suppliers and targets defined for each category.
Contents
What is Category management?
In category management, the entire procurement volume is divided into meaningful groups, for example drive technology, pneumatics, electrical components or services. Each category is the responsibility of a category manager who knows the market, demand and suppliers. In retail, category management additionally refers to range management on the sales side; in industrial procurement, it is about the buying side.
The process usually follows fixed steps: analyse demand and spend, research the supply market, define the strategy, select and negotiate with suppliers, implement contracts and monitor results. Tools include spend analyses, portfolio matrices that classify categories by procurement volume and supply risk, and supplier evaluations. The aim is to achieve a balanced ratio of cost, quality and security of supply for each category.
For MRO and spare parts, classification is often difficult because many items are bought only rarely and master data are inconsistent. Classification according to a uniform scheme provides the basis here. Strategies can then be differentiated, such as pooling for standard parts, framework agreements for wear parts and securing supply for critical components. Services such as repairs can also be managed as a separate category.
In practice: maintenance and procurement
A simple starting point is a spend analysis of recent years, broken down by category and supplier. It shows where many suppliers deliver small volumes and which categories carry a high supply risk.
Synonyms and abbreviations: category management · commodity management · category strategy · procurement category management
Frequently asked questions
What does a category manager do in procurement?
A category manager is responsible for one or more categories across the entire procurement cycle. They analyse demand and spend, monitor the supplier market, develop a strategy for the category, run tenders and negotiations and manage the suppliers. In doing so, they work closely with engineering, maintenance and quality so that requirements and procurement objectives are aligned.
What are the steps in category management?
The models differ in the number of steps but usually contain the same core phases: define the category, analyse demand and spend, research the supply market, develop the strategy, tender and select suppliers, implement contracts and monitor results. The cycle is repeated regularly because demand, prices and the supplier landscape change.
What is the difference between category management in retail and in procurement?
In retail, category management refers to managing product ranges as independent business units, often together with manufacturers, in order to improve sales. In industrial procurement, it means organising purchasing by category with the aim of optimising cost, quality and security of supply for each category.