Every business leader is concerned about the bottom line. This means procurement and supply chain strategies are incredibly important, although they’ve become more challenging to manage due to both internal and external factors. The global marketplace can be quite unforgiving. A single misstep could spell disaster. Given that you have to find ways to identify real corporate needs and discover methods to impact business decisions in a positive way, category management must inevitably play a key role. Fortunately, an effective category management strategy can produce impressive results.

Category Management

As a concept, category management isn’t overly complicated. It approaches management of a product category as if it were a single business unit. When it comes to retailing and purchasing, the products you purchase or sell can be conveniently classified into distinct groups. This allows for easy categorization, monitoring, and should make for predicting trends or adapting to changes in the marketplace a bit less difficult. A similar process is also adopted for procurement and the supply chain.


When it comes to procurement, this systematic methodology can be leveraged to better organize your resources and focus your efforts on key areas of spending. Obviously, you want to spend as little as possible in order to aid with maximizing your profits. Ideally, this enables your management team to target their time on an in-depth market analysis, which should be aimed at decision making and the best use of resources. As a result, you can buy more effectively and strategically, improve your sales, and save money when it comes to procurement.

Supply Chain

With your supply chain, you always want to reduce risks. Later shipment, incomplete orders, poor-quality goods, and other factors can severely hamper your ability to do business. A single error in your supply chain can easily produce a domino effect. With proper category management, you can reduce your risks and shed light on the real business value of your supply base. This might aid with hitting your profitability targets, enhancing your promotional activities, and may assist with coordinating strategies internally. For effective category management, both your procurement and supply chain strategies should work in tandem.


By now, the benefits should be fairly obvious. Putting together a model for the market and identifying the real value will help you accrue much needed consumer information. These details increase you available information and improve your understanding of both your consumers and the marketplace, which in turn can be leveraged to create a competitive advantage. This will undoubtedly aid you with building a more thorough and accurate sales strategy. If utilized effectively, increased profits should soon follow.

Getting Started

Getting started with your category management plan is probably the most difficult part. Luckily, there are some basic steps to follow. First and foremost, you need to construct category definitions. This identifies the categories that your various products fit into. Next, you need to perform a thorough analysis to determine your previous return on investment (ROI) and your prior sales. When it comes to strategy, it’s a good idea to interpret your supply and demand models through the lens of these categories. At the end, you’ll need to carefully implement your business plan via a category-based approach. As you progress, you have to monitor your progress and changes so you can review and improve.

As you can see, category management is a relatively simple idea, although it’s not always easy to utilize it effectively. Speak with TradeBeyond at 852-2378-6300 if you’d like to learn more about putting together the tools and strategies for commercial success.

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