Category management is generally referred to as the supreme discipline of strategic procurement: Those who set up an efficient category management system can tap to enormous savings potential for their company. What exactly is behind the term, what challenges entail a category management and how you can set it up according to ECLASS , you can find out here.
The idea behind category management is to manage merchandise categories as strategic business units. Accordingly, all products in a company’s procurement portfolio are bundled into groups based on common features. Material groups should ideally be arranged hierarchically so that a structured view across several levels is possible. Especially in times of digitalization, the bundling of products is an essential factor because only in this way can the same or similar products be identified and perfected, for example for product data optimization or supplier matching.
The terms “product group management” or “material group management” are often used synonymously with category management.
Category management is not as simple as it sounds. It holds more challenges and stumbling blocks than many expect:
To establish a strategic, clear and holistic category management, the veil that has settled over the data graveyards in the companies must first be lifted. This is the only way to transparently retrieve the procurement volumes per material group, per supplier and per company unit.
Since this data is not available at the push of a button in many companies, master data from suppliers often has to be analyzed, harmonized and consolidated first. Depending on the data quality, processes and company software, this preliminary work is very time-consuming and labor-intensive. We at D&TS would be happy to support you in optimizing your basic data.Contact us today
To cluster the procurement portfolio and form material groups, companies either define their own material group keys or use existing standards such as ECLASS. The latter has the advantage that
Subsequently – depending on supply and demand power – strategies are developed for the individual material groups and measures are derived that are useful for achieving the strategy goals. For this purpose, companies use, for example, the purchasing chessboard by A.T. Kearney* (see picture). *https://www.kearney.com/web/the-purchasing-chessboard
D&TS advises and supports you in setting up your material group structure using different methodologies (text analysis, forward and backward setup). Especially when deriving material groups from ECLASS, rules have to be followed and general requirements have to be derived on a company-specific basis. We advise the following if possible:
If these rules are not followed, then the company deprives itself of the possibilities to conduct exact analyses, to realize specific tenders and also to select suppliers precisely. We also support you in applying and supplementing the general requirements for a material group system to your company. This means that
These rules and requirements clearly show that a high level of ECLASS competence is necessary to set up a material group structure according to ECLASS.Contact us today
The substantial advantage of backward construction is that every article in the system is classified up to the fourth level. The material group structure clusters the individual categories and very precise SPEND analyses can be performed. The backward setup enables a detailed and accurate analysis of the ECLASS categories, resulting in an optimal material group structure.
Our standardized approach to data optimization and the introduction of a material group structure is based on our extensive project experience. Our approach is continuously optimized. It provides a project framework, offers initial support, and can be customized for specific companies as needed.
The first and crucial step is to develop a common understanding of your industry and company-specific requirements. With an analysis, we objectively examine your actual condition, e.g.,
and identify the current challenges and opportunities. In the subsequent target analysis, the individual recommendations for action are determined for your specific classification system (material group system).
To establish a clear category management, the necessary transparency in the data must first be created. The preparation of master data in the form of harmonization is thus the basis for all further steps. In the process, the relevant data is bundled and designations are harmonized.
Prior to classification, the rules and requirements for the classification system are defined, such as limiting the classification standard to certain areas, adding additional classes, removing/expanding features and keywords, etc.
D&TS then classifies the different materials (standard and catalog parts) according to the standard classification system ECLASS, a defined company-specific structure or a mixed form. Company-specific classes are to be developed for drawing parts, based on different methods (according to ECLASS, according to geometric similarities or according to process techniques, e.g., milled part, turned part, etc.). During classification, the materials go through several steps, with the optimum result being achieved by automatic preparation (e.g., comparison with manufacturer catalogs) and an additional manual check.
If you also need properties for the relevant classes, these can be transferred from ECLASS. In addition, D&TS supplies fully defined and practice-oriented lists of characteristics. Missing property content can be taken from the ClassCOCKPIT Knowledge Database (constantly growing database with catalogs of manufacturers/suppliers).
D&TS offers software solutions that support the construction of the material group structure and the classification process. With the ClassCOCKPIT SAP software, you can integrate your own classification system into SAP. You quickly and simply create your structure in the form of classes and properties in the SAP system.
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