“We have a category management department instead of a purchasing department,” is a common cry from retailers. In practice, many organizations do appear to have taken the step by rebranding their buyers as category managers, but they have often stopped there. The methods, direction, processes and way of thinking of the “old” buyer are still nailed into it. This results in an organization where the customer’s product and needs are not the focus and category management results lag behind.
So the question is, “How do you, your organization, transform from a procurement driven to a category driven organization?
Below are 5 steps to help your organization with this and guide your buyers through this organizational change:
1. Determine the category strategy
Management, do you know what you really want? What is your position in the market and how can category management contribute to this? How should category management be implemented and what fits with the business strategy? From this, determine category objectives so that direction is given to the category management department. This puts the department in a better position to innovate with the chain and see how best to serve the customer.
2. Matching direction and frameworks
The biggest mistakes arise from lack of direction and frameworks. Defines clear frameworks for category managers to further deepen category management strategy. This gives category managers the freedom to be able to fill their own roles optimally within the appropriate frameworks of the company. Think clear formula principles, clear category roles, channel choices and financial goals per category. Giving them this freedom themselves allows for entrepreneurial category managers who contribute to the organization’s vision and brand.
3. Managing roles and expectations
From the strategy and formulated frameworks, the necessary roles and responsibilities within the category management department can be fleshed out. But pay attention! Keep it simple. Determine whether certain activities should be placed within category management or remain with the buyer. Consider, for example, sourcing analysis, strategy setting and execution. For example, are merchandisers or planners needed to achieve the ultimate goals? Or are these parts that can be done perfectly well by the category managers? .
Important not to forget to think about cooperation with internal departments as well as cooperation with external parties such as supplier. Are adjustments in their roles and responsibilities needed here? Discuss this well so there are no surprises after implementation.
4. Processes to accelerate
In our experience, within category management, a number of processes need to be executed properly and on time. These are processes that often cross several departments and roles within the organization, but are under time pressure. Think, for example, about the promotion process or bringing up new assortment.
Determines for these processes, jointly with category managers and the other departments involved, the speed and responsibilities for each process step. Also discuss what information is needed and who could be the facilitator here. By properly aligning speed and roles/responsibilities for each process step, you maintain momentum in these time-critical processes.
5.Don’t forget change management!
Ultimately, it is your people who have to do it, not the processes, frameworks or roles and responsibilities. So include your people in this change. Explain why this is important to the organization and what their role is in the bigger picture. Make them important. Also explain well the benefits of this change, but don’t hold back any negative consequences either. Be honest. Then provide adequate guidance on the processes, methods and way of managing by informing and training them. Prepare them for a new way of working that includes building internal and external relationships, a more prominent role within organization, managing the assortment and playing a key role in a pull driven organization.
What will a category-driven organization deliver? A whole lot! A clear category direction within the organization where the frameworks provide an entrepreneurial interpretation of category management. Through clear agreements on roles and responsibilities, critical time processes can move quickly through the organization, thus contributing optimally to the overall business strategy. When do you start?
