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What Does a Category Manager Do? (To Elevate Procurement’s Impact)

By April 30, 2024No Comments

An effective category manager is like the CEO for their own product or service category. They develop and communicate crystal clear category plans. They understand the value a category of goods brings to the customer. They realize efficient sourcing across the whole value chain. They have ownership over the whole category strategy.

To give you a full view of what effective category managers do we’ve brought in the experts. In episode 97 of the Art of Procurement podcast Lynn Rideout, Senior Manager of Category Management, and Chris Eyerman, Senior Director of Program Management from Denali Sourcing Services, share some of their top tips for category managers based on over 30 years of combined experience in driving change in enterprise businesses.

Before we hear what the experts have to say, let’s recap what you need to know about the role of a category manager in today’s procurement organization.

What is a category manager in procurement?

A category manager is a procurement professional who is responsible for managing a category of goods or services purchased by a company.

what does a category manager do in procurement

What does a category manager do?

A typical day in the life of a category manager might involve developing and implementing category plans, managing stakeholder relationships, and analyzing market trends to optimize the supply chain and overall profitability of the company. Every day may be different, so category managers need to balance out many priorities and follow a clear category management process.

Category manager vs. traditional procurement role

Unlike traditional procurement roles that focus primarily on cost savings or transactional purchasing, category managers are tasked with a more holistic approach. They become experts in specific categories of spend, understanding everything from market dynamics to internal stakeholder needs, all to ensure procurement drives real, strategic value for the organization.

Why is category management so popular today?

On a broader level, category management is a strategic approach to procurement focused on developing deep expertise, alignment with business goals, and the delivery of substantial value through smarter sourcing practices. 

As articulated by Lynn Rideout, the essence of category management is encapsulated in the drive to “transform and start to think about these things in a way that becomes not so overwhelming,” suggesting a need for a systematic approach to manage the complexity inherent in all procurement roles today.

Typical challenges in a category manager role

Many category managers transition into the role when their procurement organization adopts a category management framework. They may have a background in buying or sourcing, so the skill set for a category manager may need to be built over time with experience. Here are three typical challenges that can emerge for new category managers.

1. Shift from an operational to a strategic mindset

Many traditional procurement roles are focused on following processes and executing on business plans. For anyone transitioning to a category management role, there is a clear need to shift to a strategic mindset.

Impactful category managers are change agents. Not only do they excel in the procurement of goods and services, but they also understand the intricate dynamics of the categories they manage, the business’s strategic objectives, and how procurement can contribute to these goals. This requires a shift from transactional procurement practices to a more strategic, analytical, and collaborative approach.

2. Speak the language of business

Another typical challenge is that category managers focus too much on the language and goals of procurement. For instance, Rideout brings up an example of her time working as a category manager focused on marketing. “If I’m procurement and I’m coming to marketing, I’m going to turn off marketing very quickly if I talk like procurement. If I just kind of say, I’m here to save you money, that’s not a great way to deliver value and that we’ll never have another conversation with them again.”

Rideout’s approach underscores the importance of category managers being adaptable and knowledgeable about the specific business area they are working with, enabling them to offer meaningful, strategic contributions that resonate with stakeholders and genuinely support the business’s overarching goals.

3. Move from processes to relationships perspective

Procurement is often associated with rigid processes. For category managers to thrive, they need to move from a process focus to a relationship focus. As Rideout puts it, “I think where you fall into a little bit of trouble is when you just keep pushing the process at a stakeholder to say, well, I have to follow the process, or I just have to do this because this is what’s next on the list. I think that this can start to shut some doors.”

Category managers should use processes and tools, but not be limited by them. The tools, templates, and processes at your disposal are meant to support, not constrain, your strategic planning. Use these resources to structure your approach to category management but remain flexible in how you apply them. As Eyerman points out, the goal is to use these resources to “drive a conversation” rather than to follow a rigid process.

Three imperatives of the category manager role in procurement

Lynn Rideout and Chris Eyerman suggest three key “imperatives” that effective category managers need to get right. 

1. Know your stakeholders’ world inside out

First and foremost, immerse yourself in the world of your stakeholders. You need to go beyond the surface-level understanding of their needs. Actively listen to learn about the challenges they face, the goals they’re striving to achieve, and the pressures they’re under. As Rideout suggests, “understanding what keeps them awake at night” is a critical step. This deep dive will help you tailor your category strategies to not only align with but actively support their objectives.

“Knowing your stakeholders” is more than just understanding their procurement needs. It involves “spending time with them, understanding their pain points, understanding what they’re being asked to deliver for the business,” as Lynn Rideout describes. This imperative underscores the importance of building relationships based on trust and mutual understanding, enabling category managers to align procurement strategies with stakeholder objectives effectively.

To put this into action, consider setting up regular meetings with your stakeholders, not to discuss procurement, but to learn about their world. Ask targeted questions that encourage them to share their challenges and goals. This process will not only inform your category plans but also strengthen your relationships with stakeholders, making future collaboration more effective.

2. Understand category dynamics

In addition to knowing your stakeholders, you need to deeply understand the dynamics of your category. This means understanding not just the products or services but also relevant market trends and developments. Rideout emphasizes the importance of coming “armed with the right information” to discussions with stakeholders. This knowledge positions you as a valuable advisor, not just a procurement functionary.

The depth of knowledge a category manager possesses about their categories directly impacts their ability to drive value. Rideout emphasizes the importance of “understanding a little bit about what they’re doing, what’s important to them, and what is going on in the market relative to them.” This knowledge equips category managers to engage meaningfully with stakeholders and propose strategies that resonate with their business objectives.

To achieve this, dedicate time to market research and analysis. Use industry reports, attend relevant conferences, and engage with suppliers to get insights into market trends and innovations. This will equip you with the knowledge you need to have informed discussions with stakeholders and to identify opportunities for adding value beyond cost savings.

3. Deliver results based on business goals

The ultimate measure of a category manager’s success is their ability to deliver results that align with business goals. “Delivering results in all forms across procurement” is pivotal, according to Rideout. This includes not just achieving cost savings but also enhancing supplier management, mitigating risks, and bringing more spend under management. The focus is on using the category management process to achieve outcomes that contribute to the business’s strategic objectives.

To turn this advice into action, start by mapping out a portfolio of projects or initiatives for your category that aligns with business objectives. This could include renegotiating contracts to include innovation clauses, implementing supplier development programs, or consolidating suppliers to reduce risk. Then, prioritize these initiatives based on their potential impact and alignment with business goals.

Key takeaways from the category manager role in procurement

When executed well, the role of the category manager can be central to elevating procurement’s impact within an organization. Through strategic category management, procurement is positioned – not just as a function that manages costs – but as a strategic partner capable of driving business value. This shift requires category managers to be strategic thinkers, effective communicators, and relationship builders who can navigate the complexities of their categories and align procurement strategies with business objectives.

As Lynn Rideout and Chris Eyerman share through their insights in episode 97, embracing these responsibilities and strategies is key to transforming procurement and enhancing its contribution to the broader business agenda.

More expert views on category management

Broaden your understanding of category management by listening to these expert interviews on the Art of Procurement podcast:

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