Category Management

6 elements of a robust category strategy

GregoryRomney.jpegBy Gregory Romney

A robust category plan and strategy will guarantee significant impact for organisations. Here are six key elements that make up a robust category strategy:

Ingredients for a successful IT sourcing strategy

Ronald_Flockhart_100.jpgHow do you take your information technology (IT) procurement beyond price negotiation and vendor management?

In this month's SmartProcurement, Ronald Flockhart, Group Head: Sourcing and Category Management at First National Bank, takes a look at creating a meaningful and relevant IT sourcing strategy that considers long-term, holistic perspectives to maximise enterprise value, while minimising costs and optimising risk exposure.

How can maverick spend hurt your company?

MaverickSpend_150.jpgRogue purchasing can cost you plenty. PurchaseControl unpacks the implications of maverick spend and how you can tackle it.

Making headway in tail-spend management

TailSpend_200.jpgSupply management organisations have tended to ignore tail spend, considering it non-strategic. But as they realise the cost savings that can be derived, organisations are becoming more aware of their tail-spend management problems and are looking into solutions.

Face protection masks could inject at least US$1.5-billion annually into the African economy

DouglasBoateng_100.jpgOn 27 June 2020, MarketWatch reported that the global disposable face mask market size was anticipated to reach US$23.81-billion by 2027.

On 30 June, Goldman Sachs released an extensive economic analysis of why the wearing of a face mask is a must. By studying the link between coronavirus infections and mask mandates in US states and overseas, the reputable global investment bank estimated a national directive could cut the daily growth rate of confirmed cases by one percentage point to just 0.6%.

According to the bank, the reduction could prevent the need for lockdowns that could wipe 5% off of US gross domestic product (GDP). The implications of not wearing a mask and the associated health and socio-economic consequences are no different in emerging and developing economies. The coronavirus (SARS-CoV-2) and associated COVID-19 pandemic has, however, resulted in the emergence of a face protection mask (FPM) industry.

In Africa, this rapidly-evolving sector could contribute approximately US$1.5-billion annually to the continent's economy. This is according to supply chain and industrialisation expert, Prof Douglas Boateng.

The traditional mindset of cost savings is dead

Hemant_Porwal_100.jpgBy Hemant Porwal, Executive Vice President: Supply Chain and Operations, WESCO Distribution

Over time, the concept of measuring savings has evolved to creating a baseline by comparing items under the form, fit and function framework.

Top-quartile procurement teams have taken this further by adopting total cost of ownership (TCO) into their request for proposal (RFP) models, instead of pure price comparisons. A key point is that these TCO criteria measure costs can be principally influenced by procurement teams.

However, this is not enough. We need a more holistic metric which measures cost from the first mile to the last mile and, ultimately, within reach of customers in the last three feet. The metric to use is total cost to serve (TCS).

COVID-19 drives sole-source purchases

StephenBauld_100.jpgBy Stephen Bauld

During these difficult times of the COVID-19 pandemic, it is critical to order specific items that are in high demand. This type of situation will often cause a sole-source purchase that needs to be negotiated directly with the different suppliers that have the required products.

To ensure that you are not led down a garden path by suppliers that will mostly likely have 'the power', we must rely on the basic principles of procurement, such as engaging in price negotiation and contract monitoring.

A shifting role in the digital age - are TMCs tech companies or people companies?

WallyGaynor_100.jpgAcross industries, the Fourth Industrial Revolution has brought a step-change in how companies approach their processes, technologies and business models. The most successful businesses of today have responded to their changing role in society by digitising and reconfiguring to unlock new sources of value for people. How is this playing out in travel?

In a report called 'Harnessing Technology to Empower Your People', eighty seven percent of travel buyers said they are excited about the future of travel technology, but 76% said they were looking to partner with people to keep them up-to-speed about the latest technology.

Wally Gaynor, of Travellinck, tells us more in this month's SmartProcurement.

Is not spending, a saving?

MiraRistovich_100.jpgBy Mira Ristovich, Founder of MRC, a consulting firm that assists with various end-to-end projects, and Senior Associate at Bespoke Group Africa, an organisation dedicated to the strategic procurement outsourcing of projects.

Two decades after I began my work in procurement (I was involved in business performance management and measurement prior to joining the procurement family), I can still remember how surprised I was to find that many business owners believed that not using an allocated budget meant that they were saving money.

Unfortunately, this kind of thinking still exists.

How can procurement managers guide corporate travellers towards better travel choices in 2019?

NicoleAdonis_100.jpgDirect feedback from frequent corporate travellers can be a powerful tool in the arsenal of a corporate travel procurement manager in their efforts to achieve better compliance and engagement, and to reduce the human cost of frequent travel.

FCM Travel Solutions South Africa GM Nicole Adonis unpacks the importance of traveller feedback as a performance measure in this month's SmartProcurement, as well as leveraging behavioural economics to encourage travel choices that are policy friendly.

The management of procurement value

SergiiDovgalenko_100.jpgIt is now apparent that procurement can deliver an extensive value proposition in addition to traditional savings and compliance. Procurement has the potential to be a revenue centre, empower suppliers' product innovation, manage risks, contribute to customer satisfaction and so much more.

Traditional procurement strategy that pragmatically concentrates on return on investment (ROI) and the enablers of ROI does not sufficiently elaborate on the variety of value elements that can be unlocked.

A step towards introducing this new dimension of value elements is to develop a classification of different values.

A group of authors from Bain & Company, in their article The Elements of Value, has undertaken such an approach and built the Value Pyramid, which can be customised for procurement.

Sergii Dovgalenko (FCIPS), Head of Procurement, Etihad Airways, takes us through the process at a high level:

6 mistakes that procurement makes when crafting a travel RFP

LloydBarkhuizen_small.jpgThe arduous RFP (Request for Proposal) process is a bit like being forced to eat your greens as a child. You don't want to do it, but you're continually told that it's good for you.

But, that's not necessarily the case. RFPs are only 'good' for you and your business if you execute them properly. In this month's SmartProcurement, Lloyd Barkhuizen, Director: South Africa and Africa, FCM Travel Solutions, outlines six common pitfalls to avoid when inviting suppliers to pitch for your organisation's travel contract.

Join us at Smart Procurement World's Gauteng Indaba on 18 & 19 September where Lloyd Barkhuizen will discuss how to use big data to make more informed decisions around travel spend, traveller friction and travel programme efficiencies.

Supply chain complexity drivers are also profitability drivers

TafaraSvosve.jpgNo one introduces complexity into their supply chains just for the sake of it. Complexity emerges as organisations pursue their profit goals. Within every strategy or action that an organisation pursues to improve profitability, lies a hidden cost of complexity, which supply chain practitioners must be aware of, capture and deal with. This is necessary because complexity drivers are also profitability drivers, explains Tafara Svosve (MSc Supply Chain Management, CMILT), in this month's SmartProcurement.

How to procure the right travel partner

EuanMcNeil_100.jpgThey say people do business with people they like. That may be true in organisations that have a rather flexible approach to procurement, but in the world of travel management it's often more to do with the bottom line than who plays a better game of golf...

Selecting the right Travel Management Company (TMC) to support your organisation can often be a daunting and drawn-out process, especially when you struggle to differentiate the services offered by each TMC, says ‎Euan McNeil, GM FCM Travel Solutions South Africa, a division of Flight Centre Travel Group. "The secret to finding the right match for you is to understand that what you put in, is what you get out."

Importance of logistics in supply chains: a micro perspective

TafaraSvosve.jpgToday companies face increasing levels of competitive pressure and challenges to maintain and improve profitability. There is also increasing pressure from customers and shareholders, necessitating that managers seek ways of reducing costs, while at the same time improving performance.

In a series of SmartProcurement articles, Tafara Svosve (Msc Supply Chain Management; CMILT) will focus on the role of logistics in supply chains. Our goal is to help our readers identify skills gaps they need to close to improve their logistics operations and, hopefully, improve the overall logistics performance index of their countries on a global scale.

How are you measuring your corporate travel ROI?

EuanMcNeil_HS.jpgTravel managers have traditionally been encouraged to keep their travel costs under control and to not use travel as a tool to achieve results.

These notions are being challenged by travel management companies, which believe that travel should be seen as an investment instead of purely a cost. After all, how can a business grow and achieve its goals without business travel?

In many company structures today, travel remains a fixed cost, lumped as a procurement department responsibility.

Understanding the role of Procurement will help agencies secure more client wins

JohannaMcDowell.jpgThis was the finding of Scopen Africa, whose information - obtained from the Agency Scope 2017/2018 study - indicates that 54% of advertising and media agency negotiation processes are led by marketing, while in 41% of those processes both parties (marketing and procurement) are present. The study also found that 63.7% of marketers are influenced by an agency's offering and 36.3% make their final decision based on the agency's costs, which is why procurement needs to be involved.

Procurement needs to be taken seriously by agencies, owing to its focus on selecting suppliers that are viable as well as having sustainable business models and a good track record.

When agencies are looking for business opportunities, being in direct contact with procurement will be useful, advises Johanna McDowell, Partner at Scopen Africa and CEO of The IAS (The Independent Agency Search and Selection Company).

Frenemies - making 'cents' of advertising spend

SimbarasheMsonzah.jpgThe digital marketing category has opened businesses up to new opportunities and challenges. While marketing now has the capability to reach more customers, procurement now has the numbers and visibility of the supply value chain for the marketing category. However, the digital revolution has also handed the procurement function a chance to reset historical squabbles and confrontations with colleagues in marketing.

So, what can business executives expect from these frenemies?

"Well, for one thing, they should be measuring digital advertising's return on investment (ROI) by tracking metrics that impact directly on profit and revenue", says Simbarashe Msonzah, Independent Procurement Consultant and Executive Committee Member of the CIPS Gauteng Branch.


 

 

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