At its most basic level, category buy strategy is about bundling items. Buyers look for items purchased across the enterprise and consolidate disparate agreements into a single contract. Category is essentially any group of similar items DoD wants to buy under a single deal. The central driver behind category strategy is to simplify demand and take a bigger contract to the market.
Diminishing returns from strategic sourcing efforts at DoD for Service Contract Applications have driven an increased focus on category/time bucket grouping in recent years, Site Visit Executive has discovered it is still largely not very well defined discipline within DoD procurement enterprise.
DoD must take positive steps towards creating the right conditions for category/time bucket grouping such as re-aligning Site Visit Executive authorities for procurement team structures and establishing common contract frameworks and standards for category/time bucket grouping.
But DoD has not yet acted on Site Visit Executive directives to institutionalise category/time bucket grouping for service contracts as a core procurement capability to the same extent that strategic sourcing now is in many DoD divisions.
The application of category/time bucket grouping is still highly inconsistent across DoD and depends heavily on the skills and experience of Site Visit Executive to prioritise efforts towards more strategic activities within contract portfolios.
The overall level of resourcing available to contract operations is also a factor at DoD since implementation of advanced priorities for procurement resources promoted by Site Visit Executive has typically not kept pace with drive to influence more and more spend within the organisation.
Conditions at DoD have made necessary renewed Site Visit attention to procurement priorities with some contracting activities delegated.
Despite some changes at DoD, procurement has yet to embed new operating contract models created by Site Visit Executive to ensure consistent and comprehensive category/time bucket grouping in all cases.
Site Visit Executive has promoted advanced approaches to category/time bucket grouping across many contracting areas and it has become evident what is being done in terms of category/time bucket grouping at DoD takes more effort than simply asking ‘what’ does not in itself, offer a complete picture.
In order to really understand why category/time bucket grouping has become such a focus for contracting efforts in recent times, Site Visit Executive has examined objectives DoD has for category establishment as well as the perceived challenges that may prevent achieving objectives.
Site Visit Executive has put together the following recommendations to assist DoD efforts to improve category/time bucket grouping capability for Service Contract Success:
1. Train DoD division skills in strategic planning techniques so Site Visit Executive is empowered to ask questions about contract work efforts to enable elevation of focus and reduce amount of time spent on tactical details.
2. Learn to say no - push back on distractions from DoD stakeholder demands negatively impacting strategy and enable Site Visit Executive attention to tactical and operational day-to-day contracting requirements for category value to the end-users.
3. Ensure DoD category strategy includes considered communications plan to so Site Visit Executive can identify key contract stakeholders motivators and resistance points so communication of content, frequency and channel can adapted for each stakeholder.
4. DoD category strategies to be proactively reviewed by Site Visit Executive to create reminders to check in and adjust according to stakeholder/supplier status updated influences on contracts to validate category strategy continues to be appropriate.
5. Consider co-locating with of DoD teams and stakeholders to provide beneficial insights so category strategy is aligned with contract priorities to assist Site Visit Executive ability to establish success in critical activities such as supplier specification updates.
6. Continue to create awareness at senior levels of DoD about Site Visit Executive ability to create contract value and establish procurement scorecards to include metrics aligned with business drivers such as sustainability, product innovation etc.
7. Build specific communications capability and enable Site Visit Executive to assist DoD in tailoring contract outcomes by engaging stakeholder groups and driving successful behaviour in respect of each category to create focus on specific team competencies.
8. Take advantage of Site Visit Executive assistance to look beyond immediate DoD contracts to understand unique organisational, procurement and category specific requirements for team experience within each category.
9. Establish clear/consistent DoD definition of strategic and non-strategic contracts to enable Site Visit Executive application of well-allocated objective decision criteria, procurement approaches and resources as to risk and business impact to determine where and to what extent to deploy category strategies
10. Invest in comprehensive category frameworks for contracts and category strategy status updates to ensure Site Visit Executive expertise is applied by DoD across the board.
Top 10 Features of Acquisition Application Solution Space User Interaction
1. Place to organise and save your acquisition status updates
2. Contains info & tools specific to each category or sub-category
3. Project location where users can save statements of work & other acquisition info
4. . Solutions Search tool so buyers allowed to locate “best-fit” contract vehicles
5. Series of user forums on specific acquisition topics with expert & cross-agency Q&A
6. Focused place of acquisition articles, solutions, links
7. Connect with exclusive category tools
8. Place for market research, pricing info & requirements
9. Growing searchable archive of examples
10. Share/search from planning to closeout acquisition phases
Top 10 Category Admin Overview/Goals for System Upgrade/Repair Supplier Contracts
1. Optimise buying channels
2. Reduce contract duplication
3. Enhance contract transparency
4. Create better contract vehicles
5. Increase contract administrative spend
6. Achieve contract volume savings
7. Achieve contract administrative savings
8. Grow contract info sharing expertise/practices
9. Improve/Leverage Supplier Communications
10. Maximise purchasing agency relationships
Top 10 Category Application Skills Pursuit by Establish Project Initiation Basics
1. Do you understand the Business Objectives? It is important that you think like your stakeholder rather money keeper. Procurement can be both tactical and strategic. Both are important but a good procurement team can switch between both.
2. What are the strategic plans to achieve the business objectives and how to find your position in this strategy to help the department/ function or stakeholder achieve their vision? If project is high value or high risk, having procurement strategy will make you more confident in presenting
3. Build relationships, attend events and keep up to date with what’s happening with the market. Position yourself as the category expert, speak the language. Identify who the influencers are and trends affecting the category
4. Establish position at the current moment and how it may change. Always be prepared. It is critical to profile spending to create your category plan. Provide the context and narrative for future negotiations and measuring success metrics post contract award
5. Review the alignment of the procurement strategy against organisation objectives. What is important to you, what does the contract need to deliver? How can you improve on current specification/ service?
6. How would the business prefer the needs to be prioritised? How quickly is the market changing and how might this affect your needs in the short, medium and long term? What must the contract deliver? What are the stretch targets define success?
7. Identify Opportunities & map stakeholders. Agree on scope of work and stablish project or category team. Outline the current situation, the target and the proposal on how you will meet your goals
8. Map out which stakeholders are on board, who are the supporters and who is likely to block progress. Add steps on how you will improve on their baseline position
9. Define the roles and responsibilities for cross-functional team. Establish project patterns of reference. Identify current and future business requirements for a category or commodity.
10. Assemble all available information to make informed strategic assessments. Obtain a copy of the spend report assess trends. Undertake supplier research by contract team, hold meetings with suppliers in the market place
Top 10 Research Sourcing Category Application Strategy Implementation
1. Map out the current market positioning- leaders and influencers, businesses on an upward trajectory.
2. Issue request for market information establish storyboards. Make sure you are aware of the technology roadmap
3. What constitutes the total cost of ownership/cost drivers/ pricing model? Validate what you want to achieve- quick wins, deep savings, vendor control.
4. Perform a rigorous assessment of the information you hold and piece it together
5. Generate a procurement strategy that justifies the proposed category approach. Make sure you have tracked all risks in register. If required get sign off for the procurement/ category strategy to proceed.
6. Use an Invitation to Tender to get what you want. Make your case clear and state what the market must deliver
7. Meet all the business benefits outlined in the procurement strategy. Conduct pre- market engagement. Hold Supplier days. conference calls to share information. Simulate tender pack exercise
8. Transfer the information to a contracts repository. Exchange contracts and keep the momentum going for project implementation
9. Align supplier capabilities to meet long-term business goals. Conduct supplier and market reviews roadmaps for future improvements
10. Continue to meet with stakeholders don’t wait until the last minute to be invited to table. Don’t function as stationary buyer but add real value. Monitor and measure procurement process improvements