Supplier Category Management: Driving Value Through the Procurement Organization

- March 2012

Abstract: Today’s sourcing and procurement function has the ability to be so much more than just the buying arm of the enterprise, focused only on getting the lowest cost. Shifting the focus to what the business needs to accomplish its goals can enable procurement to take into account elements such as supplier quality and reliability. By emphasizing efforts in categories that are critical to the business, the procurement and sourcing organization can build and manage supplier relationships that deliver results for the business. This report discusses 14 best practices used by leading organizations that demonstrate meaningful alignment between procurement and the overall business structure. It also includes in-depth case studies of the following best-practice organizations: ATMI, FMC Technologies Inc., and Merck.

Keywords: Purchasing; Procurement; Sourcing; Supplier certification; Supplier relationship management; Supplier partnerships; Supply chain management

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