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Category Intervention: Translating Category Intelligence into Tailored, Value-Driven Action

Posted by: 
Abheek Datta
 | Apr 2021

Category intelligence can help you identify challenges you didn’t see coming. Category intervention enables you to solve them – and save costs.

Category intelligence is an essential tool for modern day procurement teams. It gives you visibility of the forces impacting the goods and markets you depend on, helping you anticipate changes, optimise spending, and build more resilient and efficient category strategies.

But, when it comes to cutting costs and enabling procurement excellence, looking externally at what’s going on in your categories and amongst your suppliers isn’t always enough.

That’s where category intervention comes in.

Category intervention complements, builds on, and contextualises category intelligence by using your data to look inwards at your spend, demand and procurement processes. It helps you understand the unique actions you could take to seize emerging opportunities and drive down procurement costs.

For example, category intelligence can help you identify a particularly volatile category that your team is managing – one that demands greater attention and focus. Category intervention then goes a step further. By looking at how resources could be better allocated across your team to enable additional focus, you can ensure that your procurement experts are spending their time on the categories in greatest need of their attention.

It bridges the all-important gap between insight and action, proactively seeking out challenges in your categories and your operations, and providing you with clear next steps to help tackle them.

Color Pencils on isolated backround

How The Smart Cube delivers category intervention

The category intervention process begins by gathering your internal data, and analysing it alongside external category and supplier intelligence. Our specialists also leverage The Smart Cube’s own resource repository – including a huge volume of category knowledge and assets, built up over years, and numerous subscribed databases – to add value to the information gathering process.

From there, opportunities are surfaced, and recommendations are created to help you see where your spend, sourcing strategies or demand management could be optimised or changed to save costs and better support your goals.

Our team then works with you to help you prioritise which recommendations to pursue, holding workshop sessions to gather input and ensure that the actions you take deliver the forecasted value.

Ultimately, this process is built around your team and your needs. But when you engage in a category intervention with The Smart Cube, you always benefit from:

  • Deep analytical insight: Using a combination of category intelligence and your own procurement and supply chain data, we provide analytics that can help you clearly see cost-saving opportunities, and the potential value they represent.
  • Action feasibility testing: When our team provides recommended next steps and actions, we use the data you provide us with to model their feasibility. Not every action or change will be practically applicable in every business or scenario, so we make it clear what should work for you, and which actions are worth your attention.
  • Value-driven recommendations: Category intervention is all about helping procurement hit its internal targets, and delivering measurable value for the business. Every recommendation we generate is supported by data about its potential value, helping you prioritise actions easily, and build compelling business cases for change.
  • A blend of remote and on-site support: A lot of category intervention support can be delivered remotely. But for those looking to enable long-term improvements, our team can integrate with your own, and provide direct on-site support.

Category intervention in action

One of The Smart Cube’s oldest clients asked us to partner its internal productivity team to support the Lab Supplies category team to accelerate delivery of their targets, and assist with developing and implementing a category sourcing strategy at the global level.

Laboratory Scientists in a Coverall Conducting a Research

Our team developed a list of savings levers – including price harmonisation, alignment of contract terms, duo/trio sourcing, and multi-vendor services – and calculated the potential savings each one could deliver. Then, a shortlist of levers was identified through workshop sessions with key client stakeholders, where our team communicated the business case for each.

We even developed an implementation and communication plan for the shortlisted changes, ensuring that they were managed and put into action in a way that would deliver the right results for the client and their procurement team.

With our support, the client was able to realise significant benefits. One of the savings initiatives was Duo/Trio sourcing of standard materials for the EU, through which the team created savings opportunities of over $2 million at two of the client’s sites. A roll-out plan was also developed for this initiative, which included negotiations, contract amendments and timelines for achieving the target.

Is category intervention right for you?

In general, procurement teams choose category intervention with one of two goals in mind. They may be wanting to generate meaningful savings in a specific category quickly, to prove the efficacy of enhanced intelligence support. Or, they’re looking to support long-term optimisation, cost savings and improvements across the function.

In the first case, category intervention delivers a clear, action-oriented short-run solution, designed to help teams deliver significant cost savings over a short period of time. Rather than looking at how intelligence could be applied across the function, it places deep focus on a single category, diving into it to uncover powerful opportunities at speed.

For teams experimenting with intelligence solutions, and those looking to solve a specific category challenge, this approach can deliver strong results.

Hand of a man using laptop computer

But it’s the second use case where category intervention really shines. When delivered on an ongoing basis, category intervention brings an extra level of strategic value to category intelligence. Every change your team makes – whether it’s a change of process, reallocation of resources, or exploring a new supplier – is made with a broader goal in mind: building a more efficient, cost-effective procurement function.

In addition to helping you respond quickly to changes in your categories, or emerging supply threats, category intervention helps guide your actions. It ensures that your every response delivers valuable long-term improvements in your function – as well as solving today’s challenges.

Click here to find out more about The Smart Cube’s category intervention approach, or any other aspect of our Category Intelligence solution, or talk to our team today.