Category Management in Procurement: A Practical Introduction
Category management groups spend so you can develop a strategy for each. Learn the steps and where to start.
Category Management in Procurement: A Practical Introduction
Quick answer: Category management is a strategic approach that groups related spend into categories (e.g. IT, office supplies, logistics) and develops a tailored sourcing strategy for each, so effort and negotiation focus where they deliver the most value.
Instead of treating every purchase individually, category management manages spend in logical groups.
The steps
- Segment spend into categories.
- Profile each — size, suppliers, market, risk.
- Prioritise using spend and opportunity (a Kraljic-style view helps).
- Build a strategy per category (consolidate, negotiate, standardise).
- Execute and review on a cycle.
Where to start
Begin with a high-spend, fragmented category — often office supplies or IT — where consolidation delivers quick wins.
Category management turns scattered buying into deliberate strategy, one category at a time.
It relies on the visibility from spend analysis and supports vendor consolidation.
Related guides
Frequently asked questions
- What is category management in procurement?
- Category management groups related spend into categories and develops a specific sourcing strategy for each, so procurement effort and negotiation are focused where they create the most value.
- How do I choose which category to start with?
- Start with a category that is both high-spend and fragmented across many suppliers — such as office supplies or IT — because consolidating and standardising it usually delivers fast, visible savings.
- What is the Kraljic matrix?
- The Kraljic matrix classifies categories by profit impact and supply risk into four quadrants, helping procurement decide whether to focus on cost, security of supply, or supplier partnership for each category.