Category management in procurement: transforming procurement into a strategic performance lever

In a European context marked by the growing complexity of supply chains, constant pressure on costs and the demand for greater responsibility in terms of CSR, companies must rethink their procurement strategy. Category management has emerged as an essential strategic approach. By going beyond the purely operational framework, it transforms the procurement function into a powerful lever for performance, risk management and sustainable collaboration with suppliers.

Understanding category management procurement: principles and challenges

Procurement departments must rethink their practices to support the overall performance of the company. Category management procurement positions itself as a strategic response to these new challenges.

Definition of category management

Category management, or management by category, refers to a structured method that involves grouping procurement into homogeneous families of products or services. This approach enables optimised and more strategic spend management. Rather than addressing each purchase in isolation, this discipline offers a holistic approach, focused on performance by category.

It is based on long-term management logic, taking into account the specific challenges of each category: cost, quality, innovation, supplier dependence, sustainability, etc. By assigning responsibility for each segment to a category manager, companies can thus adopt a proactive approach, based on in-depth analysis and better internal and external collaboration.

Key principles of management by category

Category management procurement is based on several fundamental pillars:

• Spend analysis: an essential step to identify optimisation opportunities and prioritise high-value actions.
• Procurement segmentation: grouping needs into coherent categories enables the development of a strategy tailored to each area.
• Definition of differentiated strategies: each category requires a bespoke approach, depending on its challenges and impact for the company.
• Dedicated governance: the category manager, a true strategic manager, oversees implementation, ensures the link with suppliers and guarantees the overall coherence of actions.

Why adopt a category management procurement approach? The benefits for the company

Category management procurement is not limited to a simple reorganisation of processes. It represents a genuine strategic performance lever for companies, transforming the procurement function into a driver of sustainable value creation.

Cost optimisation and value creation

One of the first tangible benefits of category management procurement lies in cost optimisation. Through rigorous analysis of expenditure by category, companies more easily identify redundancies, pricing inconsistencies or underutilised volumes. This approach enables needs to be pooled, suppliers to be rationalised and more advantageous conditions to be secured. But beyond simple cost savings, a genuine value creation logic is established, by aligning procurement strategic objectives with those of the company.

Expert quote

“When you think about it, the title of Purchasing Manager only reflects a small part of the role's real potential. […] I think the role of Purchasing Manager is evolving towards one with a greater range of responsibilities. It will no longer focus exclusively on price, leadership, timing, and quality but will add value to a company's whole product manufacturing process."

Philippe de Grossouvre, EMEA Northern Europe Business Development Director, Corcentric

Improved collaboration with suppliers

Category management fosters a more balanced and collaborative relationship with suppliers. By adopting a holistic approach by category, category managers can identify key partners, co-construct long-term strategies and integrate common objectives in terms of innovation, quality or sustainable development. This partnership approach contributes to strengthening the overall performance of the value chain, whilst reducing risks related to critical dependencies.

Expert quote

"Procurement departments cannot act alone. They must be able to rely on their internal and external ecosystem in a process of mutual enrichment"

Magali Blaise, PMO Group Director of Global Procurement, Supply chain and Performance at Orange

Supply chain resilience and agility

The current environment is unstable, marked by frequent supply disruptions. Category management procurement provides better visibility and increased flexibility. By adapting strategies according to the specificities of each product or service, companies strengthen their capacity for anticipation and their agility in the face of market uncertainties. This structured approach enables a more strategic sourcing, identification of viable alternatives and building more robust risk management.

Implementing an effective category management procurement programme

A successful category management strategy depends on rigorous and progressive implementation.

Step 1 – Spend analysis and segmentation

The first phase consists of carrying out an in-depth spend analysis. This audit enables understanding of the current structure of procurement, identification of high-stake items, spotting of optimisation opportunities and structuring of data. Product or service families are then segmented into homogeneous categories according to defined criteria: nature of goods, supplier risks, business challenges, etc. This step is essential for building coherent strategies oriented towards performance.

Step 2 – Development of strategies by category

Each category requires a specific strategy, defined according to its economic weight, criticality and business needs. The intervention of the category manager is crucial here: they oversee the definition of levers (negotiation, innovation, TCO, sustainable development), identify internal needs, structure governance with stakeholders and lay the foundations for a strategic action plan. The objective is to maximise the value generated whilst securing supplies.

Step 3 – Active supplier management and performance indicators

The implementation of strategies requires regular monitoring and active supplier management. It is crucial to establish performance indicators (KPIs) adapted to each category: total cost, service level, innovation, CSR impact, etc. These indicators enable procurement managers to effectively manage their results, correct gaps and continuously adjust actions.

The Manutan example

This is precisely what Agnès Martin, Head of Category Management at Manutan Group, does on a daily basis with her clients: "By establishing supplier performance monitoring indicators and sharing the results with them, we engage the partners' responsibility to adopt corrective measures and visualise progress. This is an approach that must take place transparently and fairly across the entire chain."

Step 4 – Use of digital tools

To facilitate data management, automate tasks and improve collaboration, digital tools are indispensable. Dedicated solutions provide a consolidated view of spending, clear supplier management and better alignment between procurement teams, business and finance. Technology reinforces the agility of category management procurement and promotes informed decisions based on reliable data.

Use case: improving procurement performance through category management procurement

To concretely illustrate the benefits of category management procurement, here is the experience feedback from a company that has successfully transformed its procurement practices into a genuine lever for performance and competitiveness.

Company context

The company studied operates in the industrial equipment sector, with an extensive product portfolio and a European presence. It faced growing pressure on its margins, fragmented procurement management and redundancy of products across its various subsidiaries. The procurement teams were fragmented, with no consolidated view of expenditure, and supplier relationships lacked coherence. The objective was twofold: to achieve structural savings whilst improving the quality of purchased products.

Implementation of the approach

To structure its transformation, the company deployed a comprehensive category management procurement programme, led by an experienced category manager and reinforced by Manutan's expertise and solutions.

The first step consisted of a detailed spend analysis and segmentation of procurement according to usage, function and criticality. It is precisely here that Manutan's methodology proved crucial:

1. Rationalisation of long tail spend with Manutan

Manutan grouped products into homogeneous families (PPE, hygiene, packaging, tools, furniture...), enabling a consolidated view of expenditure. Their category managers identified duplicates, pooling possibilities and suppliers to rationalise. Result: reduction in the number of suppliers, simplified logistics, economies of scale.

1. Total Cost of Ownership (TCO) optimisation

Beyond price, Manutan assessed the total cost of products (storage, maintenance, delivery, end of life...) and recommended more ergonomic, sustainable and profitable solutions. Result: reduction in hidden costs and improved productivity.

1. Co-construction of procurement strategies

Manutan's category managers worked hand in hand with the company's procurement teams: on-site audits, development of strategies by category, standardisation of specifications, eco-responsible substitution, creation of performance indicators. Result: better procurement governance and strategic alignment.

1. Integration of CSR and sustainability

Thanks to Manutan's environmental scoring and their network of European suppliers, the approach integrated CSR criteria from the design of categories. Result: reduced carbon footprint and improved CSR indicators.

1. Data-driven management and digitalisation

Manutan's digital tools enabled real-time spend management, orders and procurement KPIs, facilitating analysis and decision-making. Result: strengthened visibility and simplified management.

Results obtained

In less than 18 months, the results were significant:

• 12% reduction in procurement costs, thanks to better negotiation, a reduction in unnecessary products and supplier panel rationalisation.
• Reduction in supplier panel, dropping from 150 to 90 suppliers on targeted categories.
• Improvement in overall performance, both in terms of product quality and delivery time reliability.
• TCO optimisation, enabling sustainable performance rather than a simple one-off gain.
• Strengthened CSR commitments, thanks to the integration of eco-responsible alternatives.

This case demonstrates that when properly managed and supported by an expert partner such as Manutan, category management procurement becomes a powerful strategic lever, capable of rapidly generating sustainable gains, whilst creating a virtuous dynamic within the procurement function.

As you will have understood, effective category management procurement generates concrete and sustainable results. It thus emerges as an essential strategic lever for strengthening performance, resilience and value creation.