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Category management analytics supports cost control and decision-making for procurement professionals

Category management analytics (CMA) can be performed at various levels such as customer, product, and suppliers to offer guidance on increasing sales through demand fulfillment and generating consumer interest to maximize sales from new and existing customers.

CMA could mean differently based on business needs. For retailers, it helps to identify the mix of products that a retail outlet should stock to generate consumer interest and improve its sales and revenue.

For procurement professionals, CMA helps in planning their purchase of a specific cluster of products or materials in a cost-effective manner through demand analysis as well as supplier analysis. It helps in maintaining better material supply across multiple locations and simplifying business contracts, thereby saving time and money.

Category management analytics supports procurement managers in conducting analysis on the performance of various product categories and understanding market interests. It provides decision makers the necessary inputs to decide on their product pricing, positioning and promotions.

Organizations also have category managers to focus on procurement and supply chain aspects. They depend on analytics to assist in their decision-making which requires analyzing customer insights and using predictive analytics in their planning.

Analytics drive business priorities and resource allocation based on the level of urgency or priority. For instance, orders can be analyzed by category using analytical interactive tools. These tools help in calculating the average order size over a period of time. They provide clarity on order history based on buyer and location information. Category managers can identify the departments or locations where the purchases are most within a category over various time frames.

With analytics, it is convenient to identify areas where procurement spend was high. Accordingly, re-negotiation of contracts with existing vendors or identifying new vendors could be done. Also, non-compliant spend trends could be noted so that regulatory or legal costs can be controlled.

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