Category Management in Shipping

Liam HerbertDirector, Product ManagementContent & Ranking Algorithm

What is Category Management?

“Category Management is a strategic approach which organises procurement resources to focus on specific areas of spend. This enables category managers to focus their time and conduct in depth market analysis to fully leverage their procurement decisions on behalf of the whole organisation”Source: CIPS

Identify Opportunities

Sustain BenefitsCapture Benefits

Category Management Process

Category Definition

Analyse Strategy Execution Review

What are the benefits of Category Management?

• Better supplier control

• Reduce risk

• Opportunity identification

• Quality Control

• Improved pricing

• Monitor and optimise consumption

• Develop expertise

• Spend control and improved budgetary forecasting

Fundamental elements for effective Category Management

Category Management

Cross-functional (Stakeholder) commitment

Business Intelligence

Functional resource allocation

Sourcing Strategy

Sourcing Strategy

• Standardised sourcing process

• Effective communication

• Market Intelligence– Which suppliers?

– What options are available?

• Clear goals and objectives– Understanding your clients need

• Execution– RFx process

– Contract Management

• Review

Stakeholder Commitment

• Cross-functional support– Vessel crew

– Technical Dept

– HSEQ

– Operations

– Procurement

– Logistics

– Finance

• Senior Management ‘Buy-In’

• All share the same goal and objectives

Resources

• Expertise– Supplier Relationship Management

– Contract Management

• Allocation by category

• Global or Regional

• Effective ERP system utilisation

• Functional hierarchy with clear roles and responsibilities

Business Intelligence

• Structured data / Taxonomy– Ideally centralised in one database

– Clean data

• Reporting mechanism

• Ability to analyse your spend, by:– Supplier

– Brand/Manufacturer

– Product

– Location

– Date range

Procurement in Shipping

How is Category Management adopted in Shipping?

• Differs according to buyer persona and procurement maturity– Ship Owners

• Costs directly impact the bottom line

• Maintaining asset value and longevity

• TCO programs

• More control governing data

– Ship Managers• Operating within clients budget

• Process efficiency– Minimise CAPEX and overheads

• Cost savings are passed to their clients

• High focus on cost avoidance

• Clients can have differing requirements

• Managing multiple systems

• Data is driven from the financial rather than the procurement system

Typical categories of spend under contract

Lubes21.8%

Gases0.7%

Provisions10.8%

Charts & Pubs1.0%

M/E Spares8.4%A/E Spares

5.0%Chemicals

2.3%Paints1.7%

Non-Contracted48.3%

Category Opportunity Mapping

Low

Easy

High

Relative Ease of Execution

Bu

sin

ess

Be

nef

it P

ote

nti

al

6

7

1

4

5

32

9

810

Category:1 = Lube Oils2 = Chemicals3 = Paints4 = Provisions5 = Engine Spares6 = Tech. Stores7 = Pumps8 = Boilers9 = Compressors10 = Separators

Opportunity:Volume aggregationOptimise spend & consumptionSupplier Consolidation

Shape size indicates relative spend

Hard

Where does ShipServ add value?

Supplier Recommendations

Filter by Category

Supplier Recommendations

Filter by Category AND Brand

Supplier Recommendations

Monitoring and Analytics

• Spend Analytics– Supplier

– Date range, year on year

– Ship

– Brand/Manufacturer

– Quality

– Product and Product Type

– Location

• Opportunity identification

• Provide tools and reports to optimise your spend

Monitoring and Analytics - Pumps

*Illustrated data is a sample and not representative of market size*

Monitoring and Analytics - Pumps

• Analysing spend by looking into specifics may uncover potential areas of your spend to review– Brand spend broken down by office

*Illustrated data is a sample and not representative of market size*

Summary

• Understanding your data is fundamental to effective category management

• Working with ShipServ will help you to identify opportunities

• If you are interested in learning more about what we can do to support your category management initiatives, please get in contact with your account manager or myself.

Thank you for listening