Category Management in manufacturing companies: new application of an old retail practice

Abstract

The topic of category management in manufacturing has been widely discussed in recent years, but not in academic papers. The methodology of category management for manufacturing companies has not been clearly defined yet. Traditional category management (CM) in retail involves effective management of the margin of goods, which is achieved by concentrating control over purchase, pricing, promotion and marketing in the hands of a category manager. It is obvious that the whole set of tools of traditional retail category management is impossible to apply to the purchases of industrial companies due to a number of specific restrictions: some of the goods purchased by the industrial enterprise are modified in the process of production, and the others are acquired not for external, but for the needs of company internal consumer. Therefore, it is necessary to make a number of clarifications in the methodology of category management for industrial companies concerning the toolkit and implementation algorithm used. By analyzing the theory of traditional CM and summarizing the experience of industrial companies we outline the methodology of implementing CM in manufacturing companies that will become a basics for further efficiency evaluation of this practice.