Question
It is required to make a selection of an example of a category of procurement or a product, service or works that are bought by an organisation for creating a plan category
This also include plan of implementation, challenges faced and strategies for their mitigation.
Solution
Table of Contents
Executive Summary 3
1.0 Introduction 4
2.0 Background of Organisation and Selected Category of a Product 5
2.1 About the Department of Culture and Tourism (DCT) Abu Dhabi 5
2.2 Current Role and Responsibilities in DCT 5
2.3 Introduction to the Category of Spend and Rationale for Selection 5
3.0 Category Plan 6
3.1 Kraljic Portfolio Matrix of Facilities Management 6
3.1.1 Supplier Positioning 7
3.1.2 Supplier View on Buyer Needs 7
3.1.3 Supplier Classification 8
3.2 Market Structure 8
3.3 Overall Cost of Ownership Analysis 9
3.4 Porter’s Five Forces for FM Category Plan 10
3.5 SWOT Analysis in the FM category Plan in Procurement Process 11
3.6 STEEPLE Analysis in the FM category Plan in Procurement Process 12
4.0 Strategic Sourcing of FM Products and Services Category 13
5.0 Category Plan Implementation, Challenges and Solutions 14
5.1 Prioritizing Customer Needs in the Organisation 14
5.2 Building a Functional Level of Trust with Suppliers 14
5.3 Measuring Success of Category Plan 14
5.4 Category Role and Definition 15
6.0 Conclusion and Recommendations 15
6.1 Conclusion 15
6.2 Recommendations 15
Executive Summary
In this assessment, a category plan for facilities management (FM) for DCT company procurement has been established. The category planning has been developed based on the set organisation procurement objectives and key customer stakeholders needs. The rationale for this is their impact on influencing the set sourcing strategies and initiatives for managing the contracts. Apart from the customer needs and organisation objectives, the category plan has also been based on the need to harness value maximization, reduction of prevailing risks and effectiveness in management of goods and services management. The scope of the category procurement of FM products and the categories has also been identified. For supplier positioning, tools such as Kraljic Portfolio Matrix, SWOT, Porters 5 framework, Pestel and STP for business environment have been adopted. This is inclusive of the key facts and insights on category spend, strategic sourcing levels to identify the total cost of ownership analysis being carried out. This is also inclusive of an implementation plan already developed, different challenges faced in plan implementation and approaches for mitigating the challenges. From the findings of analysis, critical recommendations have been offered essential to improve the category plan for DCT in the procurement of FM in their overall operations. These recommendations include a redeveloped supplier relationship management, and a continuous improvement in the overall category planning process.
1.0 Introduction
Category planning refers to the process that harnesses category plan development in line with the set objectives of an organisation to gain in value maximization, reduction of risks and management of supply of goods and services. This is supported by CIPS (2013) definition that category planning is aligned with business objectives and its development being on the basis of key stakeholders. Also, successful category plans have a direct influence on sourcing strategies and distinct initiatives for contract management. To affirm this, O’brien (2019) defined category management as a supplier process involved in categories management including the strategic business units and to produce an enhanced business results through customer delivery process. The category management strategies are as shown in figure 1 below;
Figure 1: Category Management Model
For the first step which is initiation and preparation, the managers are sourced for rationalizing their suppliers, aggregation of buying power, to drive prices down and improve the supplier performance against the contracts. In the second step that involves identifying opportunities, the suppliers and distributors are engaged as partners hence facilitating creation and management of customer-oriented category plans. The other steps involve category profile, aligning and improving the category, market research and intelligence. Based on this study background, the intention of this assessment is to create a category plan of FM products procured by DCT in Abu Dhabi UAE. Also, an implementation plan and faced challenges in the implementation of the plan would be identified and challenges for mitigating the process.
2.0 Background of Organisation and Selected Category of a Product
2.1 About the Department of Culture and Tourism (DCT) Abu Dhabi
Established in 2012, DCT – Abu Dhabi manages the emirate’s tourism sector and markets the emirate internationally through a wide range of activities and major events, aimed at attracting both culturally sensitive visitors and increased investment. Through its three key sectors: Tourism, Culture and National Library, DCT works extensively to regulate, support, develop and market Abu Dhabi’s tourism industry through a range of activities aimed at promoting and preserving the emirate’s distinctive heritage and culture (DCT, 2019). The company statute is set-up in alignment with the Abu Dhabi Economic Vision 2030 with a strategy of offering immense contributions to the economic diversification of a country, collaborative operations with different stakeholders in marketing their tourism industry in Abu locally and internationally.
2.2 Current Role and Responsibilities in DCT
The author is a business partner in the tourism sector regulated by DCT. They represent the face of supply management (procurement) department to the end-users with their objective being ensuring the transfer of information in an organised and structured manner between the stakeholders (end-users and sourcing team). Also, the author main responsibilities are also inclusive but not limited to planning of the purchasing requirements for the end-users, strategizing on the sourcing process and assisting the end-user in making the right (best-value) decisions in the award phase. Taking this into account, the author has an ideal opportunity of sourcing essential information to guide the understanding of the selected category of spend and the planning process.
2.3 Introduction to the Category of Spend and Rationale for Selection
In DCT, the procurement department has categorised the purchases into general, hard and soft purchases. From these products, the Facilities Management (FM) was selected as the category of spend. The sourcing tree of the identified category of spend is as shown in table 1 below;…
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