“If you don’t know where you are going any road can take you there.”
In many companies, procurement too often finds itself acting in reaction to the business. Short term priorities are driven by requestors that have overlooked procurement planning. These requests frequently demand completed contracts to be ushered through legal…by Friday. Annual goals are driven by executive cost cutting objectives, and are focused on ‘in-year’ savings. This limits procurement’s true effectiveness and value proposition to the organization. Procurement leaders are able to get ahead of this process by developing a 3-5 year plan, called a category roadmap, which details how they would like to build a solid foundation with the client and manage the company’s resources and suppliers.
The category roadmap process starts with an understanding of internal stakeholders’ needs, objectives, and priorities, allowing procurement to define an ideal end-state. This overarching vision should include a description of the products/services, KPI’s, available data, planned projects etc. Some questions procurement may ask include:
- What large projects are stakeholders planning for the coming year? In 3 years?
- What are the biggest issues in their organization that procurement may solve?
- What are the biggest risks the stakeholders may incur while reaching their goals?
- What currently demands the majority of their time/attention?
These discussions will also help in building a relationship with stakeholders. It is important to uncover the projects that procurement should be involved with early, so that the procurement group can have the greatest impact on costs and make resource planning decisions over the upcoming 6-12 months.
Next, procurement must have a realistic picture of the current situation, including:
- What are the products and services involved?
- What is the current value of the relationship between procurement and stakeholder or vendor?
- Who are the internal and external stakeholders?
- How do they feel about the current relationship?
- How would they be affected by a change in strategy?
- What is working well and what are the opportunities for growth?
- What are the potential roadblocks in the relationship and what would need to take place for them to lessen or be overcome? (existing contracts, proprietary designs, capabilities)
With a good understanding of where you are and where you need to go, you can begin developing a category roadmap.
Each roadmap will be different; however, you should be able to define and outline the products and services that need to be provided by your supplier. This will allow you to verify that your current supplier is able provide you what you need to be successful. Alternatively, it will identify and illustrate the need to further develop the supply base or find new suppliers. You will be able to include the KPI’s and requirements in your RFP’s to ensure your needs are met. You should also determine who is likely to be a supporter of change and who you may need to convince.
A category road map is not a tactical category plan that defines your timelines, but rather a strategic guide that helps present your category plan and interactions with your internal stakeholders and suppliers.
