Category Management in Purchasing and Supply Management


The concept reviews tools and processes that can deliver value and cost savings when sourcing and purchasing. It is created to help practitioners to understand markets, analyse spend, and make better purchasing decisions.

Concept Overview

Category Management in Purchasing and Supply Management

Category Management in Purchasing and Supply Management Definition

Category management is a strategic process-based approach that "focuses on the vast majority of an organisation's spend on goods and services with third-party suppliers" (O'Brien, 2009:2). In application to procurement and supply management (P&SM;), category management refers to organising the resources of the procurement team to focus on the organisation's supply market (as opposed to internal customers or departmental functions) in order to fully leverage purchasing decisions (CIPS: Category management).

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Business Application

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Further Reading

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Category Management in Purchasing and Supply Management References (4 of up to 20) *

  • Birtwistle, G., Siddiqui, N. and Fiorito, S.S. (2003) Quick response: Perceptions of UK fashion retailers. International Journal of Retail & Distribution Management, Vol.31(2), pp.118-128.
  • Chun, D.Y. and Cadeaux, J. (2010) How supplier category management policy influences category sales performance. Asia Pacific Journal of Marketing and Logistics, Vol.22(2), pp.222-231.
  • CIPS: Category management.
  • Dunne, P.M., Lusch, R.F. and Carver, J.R. (2010) Retailing. 7th ed. South Western Educational Publishing.

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Related Concept: Total Cost of Ownership (TCO)

Total Cost of Ownership is a methodology that looks beyond the purchase price to include many other related costs. The concept reviews the basic of the total cost of ownership and ways to implement it.