Procurement Strategy - 10 Reasons Why You Should Use Category Management

Category Management is an approach to Procurement that is gaining ground in both the public and private sectors. In Category Management products or services that have similar characteristics and are bought from similar supply markets are grouped together and treated as a discrete group or category.

These categories are then more manageable from a procurement perspective because the items in a category require the same supplier market intelligence, the same sourcing strategies and similar supplier relationship management programmes.

Although these activities are not new their application may require a change to current organisation structures and roles and responsibilities. Like any successful change, the benefits need to be sold to the rest of the organisation. Here are 10 reasons you can use to do this.

1. It links customer requirements with supply market capabilities.
Once you know what core supplier capabilities deliver your customer requirements you can identify and work with those suppliers that are "best of breed" in that capability.

2. It enables the business requirements definition or specification to be developed so that it delivers best value.
Defining your business requirements is a team game in that it identifies both the user requirements and commercial expectations. A balance between the two is what delivers best value.

3. It ensures that the right skills and experience are applied to the right activity within the category management process.
Category management creates the critical mass needed to have experts for each of the activities in this process rather than generalists having to do a wide range of them.

4. It ensures that all relevant spend is included in the category so that your leverage is maximised.
Without category management there is a danger that the purchase of individual items are spread across your organisation in quantities that are too small to get volume related benefits.

5. It allows you to anticipate and plan for changes in technology.
By knowing how customer requirements might change (and what that means for technology) and what your major suppliers are planning, you can identify any gaps that might occur in the future between the technology needed and what is available.

Do this soon enough and you can stimulate your suppliers to do something about it. Identify supplier innovations early enough and you can help shape the offering made to your customers.

6. It reduces risk.
Creating categories and putting them under the proper management of experts enables you to spot any trends or developments that might create a commercial risk and do something to prevent or mitigate it.

7. It develops the right supply capability both for today and tomorrow.
This is similar to the technology reason. If you can get an understanding of what capabilities are going to change over the next few years and what suppliers plan, you can influence both.

8. It helps to build good communications across the entire value chain.
We should not forget that value chains are made up of people. Category management gives you the visibility and opportunity to communicate the right message in the right way to the right people to get the result you want.

9. It builds trust and co-working across all of the value chain.
Trust comes from delivering your promises and not being unfair. Understanding your categories means that you can set goals for everyone in the value chain that meet their needs as well as yours and is within their capability.

10. It ensures that many supply options are considered rather than just the obvious one.
When someone is responsible for developing a commercial sourcing solution for a user need but they do not have the right experience, it can be too easy to jump to the first solution that springs to mind. The category management process ensures that options are considered.

By : Stephen_C_Carter

Start a Cleaning Business - Acquiring & Servicing Customers is Key

If you want to start a cleaning business, you will not only need to acquire new customers but also retain them. Did you know that it costs ten times less to sell to an existing customer than a new customer?

This may seem obvious, however, studies confirm that less than half of companies or people in business really care about customer service. Therefore, here is some advice.

• Listen to the customer. Listen to their needs, their desires, their fears, their frustrations. When was the last survey done among your customers?

• The customer is always right. Really? Of course not! The customer is always right in the sense that if he decides to spend his money elsewhere, you lose the business, so...

• Three words to avoid. The three worst words to say to a client are: "This is not our job!"; "We've always done it like that!"; "Sorry, it's our policy!". Never forget that a dissatisfied customer speaks, on average, to eleven other people about his experience with suppliers of service or hard goods.

• Manage complaints. Remember that for one customer who complains, 28 other clients have had the same thoughts but chose to say nothing.

• Say thank you. It is important not to take customers for granted. Create a sense of loyalty among existing customers. Put in place a recognition program to thank your best customers, at least once a year.

When you start a cleaning business, the most important principle to adopt is to offer a service of exceptional quality so that after a certain time, through word-of-mouth, it is no longer necessary to invest time and money to promote your services.

You need to spend a lot of energy and money to better know your customers, from day one of their acquisition. In the cleaning industry, service and customer relationship are paramount.

The other important element to start a cleaning business and quickly generate significant revenues is the ability to acquire new customers. To a great extent, your success is a function of the level of demand in a given market.

At your fingertips is the opportunity to take advantage of a virtually unknown industry that very few people in the cleaning industry even know exist. This is a super opportunity to generate significant revenues within an industry that is not saturated, namely real estate foreclosures.

Every day, mortgage companies require that foreclosed properties be secured via lock changes, that minor repairs be performed and that the property be cleaned up for the future new owner.

In the month of June 2009 alone, 32% more default notices, scheduled auctions and bank repossessions were reported on properties compared to 2008. This increase meant that 360,149 U.S. properties, only in that month, potentially needed cleaning and maintenance work.

Financial institutions have a desperate need for reliable independent cleaning contractors in states and local communities to perform foreclosure cleanouts. The demand in this market is huge and it is virtually untapped.

This makes the process of new customer acquisition to start a cleaning business so much easier and faster when the level of competition is low.

By : Marc_Fields