Category Management Process Quiz
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Questions and Answers

What is the primary focus of Category Management?

  • Building buying channels
  • Executing category strategy
  • Defining category portfolio management & segmentation (correct)
  • Developing business alignment

    • What is the purpose of the Kraljic matrix in Category Management?

  • To categorize procurement items sourced by the organization (correct)
  • To define category portfolio management
  • To develop buying channels
  • To guide procurement activities

    • What does the sourcing strategy for procurement aim to align with?

  • Buying channels
  • Business alignment
  • Procurement categories
  • Category management strategy (correct)

    • What does the Category Management process aim to define and assign to strategic procurement categories?

    <p>Buying channels</p> Signup and view all the answers

    What is the objective of developing a system that ensures periodic review of procurement categories?

    <p>In line with business need and supply risk profiles</p> Signup and view all the answers

    What is the main function of the sourcing strategy in Category Management?

    <p>Guide procurement activities in the business.</p> Signup and view all the answers

    What does the Kraljic matrix serve as in Category Management?

    <p>A categorization tool for procurement items.</p> Signup and view all the answers

    What does Category Management primarily aim to enhance in strategic sourcing?

    <p>Strategic sourcing of goods, works, and services.</p> Signup and view all the answers

    What is the main purpose of developing a system that ensures periodic review of procurement categories?

    <p>In line with business need and supply risk profiles.</p> Signup and view all the answers

    What is the key focus of the Kraljic matrix in Category Management?

    <p>Categorize procurement items sourced by the organization.</p> Signup and view all the answers

    What are the approaches for addressing bottleneck items in procurement categories?

    <p>Over-ordering when available, applying lean methods, and carrying backup suppliers</p> Signup and view all the answers

    What aspects are considered in category analysis and strategy development?

    <p>Category baseline, cost analysis, supplier performance metrics, and risk profiles</p> Signup and view all the answers

    What are the essential aspects of category management related to innovation and ethical sourcing?

    <p>Collaborating with strategic suppliers to identify cost-effective initiatives and promoting circular supply chains, reduction of carbon footprint, and ethical sourcing</p> Signup and view all the answers

    What defines the buying channels for all strategic procurement categories?

    <p>Factors like locations of need, financial thresholds, and complexity</p> Signup and view all the answers

    What informs a review of procurement categories and subsequent updates to category and buying strategy?

    <p>Annual reporting and analysis of procurement data including expense and accounts payable</p> Signup and view all the answers

    How are uncategorized goods or services handled in the procurement process?

    <p>Analyze against existing categories, prepare a motivation for a new category, review and approve or deny the new category request.</p> Signup and view all the answers

    What is considered when periodically reviewing listed categories in procurement?

    <p>Evaluate sourcing strategies; consider category consolidation or separation with justification.</p> Signup and view all the answers

    What defines leverage items in procurement categories?

    <p>High profit impact; low supply risk; reasonable number of suppliers; easily substitutable offerings.</p> Signup and view all the answers

    How are strategic items characterized in procurement categories?

    <p>High profit impact; high supply risk; requiring unique contracts.</p> Signup and view all the answers

    What is the focus for routine items or non-critical items in procurement categories?

    <p>Focus on efficiency; reducing administrative burden with techniques like e-auctioning.</p> Signup and view all the answers

    What is the basis of measurement for the timeliness of procurement item categorization?

    <p>Time elapsed from the identification of an uncategorized procurement to formal categorization</p> Signup and view all the answers

    What is the timeframe for the completeness of procurement categories performance measure?

    <p>As required</p> Signup and view all the answers

    What is the SN for the Timeliness of category Review performance measure?

    <p>3</p> Signup and view all the answers

    What is the basis of measurement for the completeness of procurement categories?

    <p>Number of material omissions and errors in the procurement categories</p> Signup and view all the answers

    What is the input document required for Category Management?

    <p>Procurement Plan</p> Signup and view all the answers

    What is the output document required for New Category Request?

    <p>N-4</p> Signup and view all the answers

    What is the timeframe for conducting annual category review?

    <p>Annual Nov 30</p> Signup and view all the answers

    What is the input document required for Purchase Requisition?

    <p>As required Business Unit N-5 34 NNPC Limited SCM Processes and Procedures 3.3 Category Management Input &amp; Output Documents</p> Signup and view all the answers

    What is the basis of measurement for timeliness of category review?

    <p>Latest time to conduct annual category review</p> Signup and view all the answers

    What is the output document required as part of documented categorization of procurement?

    <p>N-4</p> Signup and view all the answers

    Study Notes

    • Procurement categories are reviewed annually or more frequently for classified items based on supply volumes, supply risk, and profit impact.
    • Strategic items have high profit impact and supply risk, requiring unique contracts and collaborative relationships with suppliers. Consideration for purchasing approaches includes using full purchasing power, substituting products or suppliers, and long-term supplier commitment.
    • Leverage items have high profit impact and low supply risk, with a reasonable number of suppliers and easily substitutable offerings. Approach includes negotiating lower prices, developing long-term relationships, and leveraging balance of power.
    • Bottleneck items have low profit impact and high supply risk. Address this by over-ordering when available, applying lean methods, and carrying backup suppliers.
    • Routine items or non-critical items have low impact on profitability and low supply risk. Focus on efficiency and reducing administrative burden with techniques like e-auctioning and framework agreements.
    • Category analysis and strategy consider key factors like category baseline, cost analysis, supplier performance metrics, and risk profiles in developing sourcing strategies.
    • Innovation and ethical sourcing are essential aspects of category management, with a focus on collaborating with strategic suppliers to identify cost-effective initiatives and promoting circular supply chains, reduction of carbon footprint, and ethical sourcing.
    • Buying channels are defined for all strategic procurement categories based on factors like locations of need, financial thresholds, and complexity.
    • Annual reporting and analysis of procurement data, including expense and accounts payable, category performance, inventory, and overall spend, informs a review of procurement categories and subsequent updates to category and buying strategy.
    • Upon identification of an uncategorized goods, service, or works, follow procedures to analyze against existing categories, prepare a motivation for a new category, and review and approve or deny the new category request.
    • Periodically review listed categories, evaluate sourcing strategies, and consider category consolidation or separation with justification.

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    Description

    Test your knowledge of the category management process, including defining category portfolio management, building business alignment, performing category analysis, and developing category strategy. Understand the objectives and benefits of procurement categorization.

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