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Questions and Answers
What is the primary focus of Category Management?
What is the purpose of the Kraljic matrix in Category Management?
What does the sourcing strategy for procurement aim to align with?
What does the Category Management process aim to define and assign to strategic procurement categories?
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What is the objective of developing a system that ensures periodic review of procurement categories?
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What is the main function of the sourcing strategy in Category Management?
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What does the Kraljic matrix serve as in Category Management?
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What does Category Management primarily aim to enhance in strategic sourcing?
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What is the main purpose of developing a system that ensures periodic review of procurement categories?
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What is the key focus of the Kraljic matrix in Category Management?
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What are the approaches for addressing bottleneck items in procurement categories?
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What aspects are considered in category analysis and strategy development?
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What are the essential aspects of category management related to innovation and ethical sourcing?
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What defines the buying channels for all strategic procurement categories?
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What informs a review of procurement categories and subsequent updates to category and buying strategy?
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How are uncategorized goods or services handled in the procurement process?
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What is considered when periodically reviewing listed categories in procurement?
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What defines leverage items in procurement categories?
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How are strategic items characterized in procurement categories?
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What is the focus for routine items or non-critical items in procurement categories?
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What is the basis of measurement for the timeliness of procurement item categorization?
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What is the timeframe for the completeness of procurement categories performance measure?
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What is the SN for the Timeliness of category Review performance measure?
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What is the basis of measurement for the completeness of procurement categories?
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What is the input document required for Category Management?
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What is the output document required for New Category Request?
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What is the timeframe for conducting annual category review?
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What is the input document required for Purchase Requisition?
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What is the basis of measurement for timeliness of category review?
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What is the output document required as part of documented categorization of procurement?
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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.
