If applied effectively throughout an entire organisation, the results can be significantly greater than traditional transactional based purchasing negotiations, however the discipline of category management is sorely misunderstood.
There is no single founder or originator, but the methodology first appeared in the automotive sector and has since been developed and adopted by organisations worldwide.
Category management has been defined as “an evolving methodology that drives sourcing strategy in progressive organisations today”.
[2] The Chartered Institute of Procurement & Supply (CIPS) defines category management as: Writing in 2007, CIPS argued in favour of a level of specialisation and precision which at the time it considered to be a "less fashionable" approach to the use of limited procurement resources, and similarly CIPS Australia notes from research undertaken in 2010 that "Category managers struggle to focus and specialise when their portfolio has too much breadth (they are managing multiple categories with few, if any, synergies) or too much depth (they are tasked with end-to-end procurement responsibility including strategic, tactical and operational requirements).
The ability to gain insights from specialist organisations with category expertise often makes outsourcing this activity attractive.
Sir Philip Green, in his "Efficiency Review" of UK government spending (2010), recommended that "centralised procurement [should be] mandated for common categories to leverage ... buying power and achieve best practice".