Category Strategy Project Report
CATEGORY ANALYSIS
Using all previous sections of the report, plus interviews with your case company, describe the category analysis. Note that sometimes your analysis will be more qualitative, sometimes more quantitative. The section should provide background for a 1-2 year plan for managing the sourcing of the selected spend category. DO NOT STATE YOUR PLAN IN THIS SECTION. You are expected to present the information a buyer should have in order to negotiate contracts and manage supply of this specific category intelligently. This should not be solely a factual presentation of category data but should reflect your concept of the function of a buyer. Therefore, in selecting and presenting the facts, you should indicate what use a buyer might make of these facts.
Conduct a thorough analysis but only include information and findings that are pertinent. Do not just report a finding; discuss what it specifically means to a buyer of this category for this organization. Recognize that the various analyses are interdependent and integrated to a great extent; for example, price of most categories is very much a function of supply and demand.
(Note: This is team report, in this section, I need to write Spend Analysis, Demand Analysis and Supply Market Analysis)
Spend Analysis
Describe how the company’s spend (quantitatively / qualitatively) relates to this category (see Chapter 6). At minimum, articulate (1) the scope and source of data used, (2) the major and minor suppliers in terms of total spend, (3) how spend varies from expectations (e.g., contract compliance), and (4) suggested areas of opportunity BASED ON THIS ANALYSIS. ( Spend Analysis discusses Pareto Analysis related to the category – e.g. show category relevant to others, show supplier spend within the category, etc. )
Demand Analysis
Understand all aspects of demand for this category and how this will influence your recommendation. What factors drive the need for this category and what requirements exist surrounding it (volume, quality, service, etc)? How does it relate to the overall business unit strategy and what stakeholders exist for successful supply of this category? Discuss historical trends in demand for your category and a graph to visualize demand. Where do you project demand to be in the near future. Make sure you analyze the “right” demand; e.g., if your company buys this category globally, then I would expect an analysis of world-wide demand. ( Demand analysis captures essence of why category is needed and/or future volume projections; make should uses QFD)
Quality Function Deployment (QFD)
1. What’s needed
2. Why is matters
3. How accomplished
4. Where affects
5. Where relates
6. Importance
Supply Market Analysis
Apply an appropriate analytical tool or model to help you understand the supply market related to this category. Porter’s Five Forces analysis would be appropriate models, using the supply market of this category as the focus of analysis (not the organization). Then analyze your organization’s position as a buyer in that market. The goal is to understand all aspects of supply and how this will influence your recommendation. What quality/service characteristics of this category exist to meet the demand? Discuss historical trends in supply for your category and a graph to visualize supply. Where do you project supply to be in the near future? (Make should use Porter’s Five Forces)