Your Guide to Optimizing Category Management in Procurement (During Covid-19)

Category management in procurement is an integral part of the procurement strategy in which procurement managers take specific products or services and divide them into certain categories.

This technique is often used in the retail world and can be a tough term to define, as it can mean different things to different industries. 

Retail was (and still is) an industry hit particularly hard by Covid-19, so scrambling for optimization is a must. Read on to learn more about category management and how to optimize it during Covid-19.

Category Management in Procurement: Category Management Best Practices


Whether we’re speaking about your procurement gateway before Covid, during, or after the pandemic, there are some best practices when it comes to category management in procurement that should be followed to best optimize and streamline the process. This really involves formalization of the category management process, which is something that should be taken step-by-step.

Consider the following:

  • Run spend analysis. This should be a given but is a critical first step in the process. Most companies already understand their direct spend well so be sure to include your indirect spend as well.
  • Define spend categories. You can further tighten things into subcategories, such as travel and entertainment, security, medical, professional services, etc.
  • Market analysis. Part of your optimization of category management should be a constant analysis of the market to ensure that you are aware of any market shifts or new entrants to the space. This can be done once or twice a year, depending on the importance of each category to your company.
  • How to improve. Having integrated procurement technologies at your disposal without knowing how to improve and implement changes doesn’t mean much. Once you catch maverick spend, it’s time to rein it in. Are you keeping up with your supply chain’s ever-changing needs? This is what you need to think about once you review reports.

Category Management in Procurement: The Covid-19 Response


Everyone in every industry was completely unprepared for the basic shutdown of the entire world. Global shutdowns had a ripple effect on raw materials everywhere that were felt across the board, and well after a year of the beginning of the pandemic, industries are still feeling the burn. This leads to different ways of approaching category management.

When it comes to contracts and procurement, you want to make sure automation is on point. So, you’re using cloud-based contract management software that integrates with your category and procurement management needs and your entire procurement suite.

Other things you should be embracing in category management include visibility. More than ever, transparency is important not only with your team but also with your internal stakeholders. With stock and supply still being short in some areas, collaboration is key.

As a procurement manager, it’s also important to listen to customers. Of course, customer feedback has always been a key element, but their “new normal” is just as diversified as yours, and you need to keep a steady eye on their ever-changing needs.


Category Management in Procurement: How to Utilize Software


One of the best tools to help bridge the Covid-19 gap regarding category management in procurement is the right type of software. Depending on the nature of your business and the type of software you’re using, you should consider some of these tasks:


  • Identify your strategic categories and suppliers. Now more than ever you need to make sure you are focused on the categories and suppliers that are strategic to your organization. 
  • Create vendor KPIs to track performance, as it’s more important than ever to prevent supply chain disruptions in your categories
  • Customize your category management software so that you get feedback from spend analysis in real-time so you can make decisions on the fly
  • Integrate category management with other procurement software so that everything works together 
  • Centralize all your procurement data into one place to keep things easy and streamlined



Centralization is one of the key terms here because things can change suddenly in the middle of a pandemic, so having everything centralized, particularly your data, makes it easier for you and your team to make decisions quickly.Image of a dry erase board calendar for an article about Your Guide to Optimizing Category Management in Procurement (During Covid-19).

To hear more about optimizing category management in procurement or requesting a software demo, contact EC Sourcing Group today at 973-936-9672. We want you to reimagine the way you think about procurement.