Navigating financial and budgetary challenges is becoming increasingly complex for colleges and universities. Concerns about enrollment, changes in governmental policy, rising costs, and even global unrest are affecting how colleges and universities need to evolve their procurement practices.
Academic institutions must find innovative ways to reduce spend to meet budget constraints while ensuring they have the goods and services they need to thrive. For procurement teams at large institutions and finance teams at smaller schools, this is a delicate balancing act—made harder by increasing pressure to control costs.
Taking a category approach and focusing on strategic procurement can make a significant difference in helping you achieve these goals.
A category approach to procurement involves grouping similar goods or services into categories, allowing you to optimize their sourcing and management. This changes procurement from viewing purchases as individual transactions to aligning them with a broader strategy. It is a structured approach to streamline procurement and delivers higher value.
Procurement teams assess each category’s performance, identify cost-saving opportunities, and collaborate with suppliers to improve quality and efficiency in procurement. It’s a holistic way to approach procurement, which drives more strategic decision-making.
Given the complexity and scale of procurement needs in universities and colleges, category management offers a way to better align purchasing with institutional goals. By understanding the unique needs of each department and creating sourcing strategies based on these needs, procurement teams can leverage category experience to deliver better value.
Category management in procurement for higher ed typically focuses on long-term relationships with suppliers to solidify supply chains, reduce costs, and find innovative solutions to challenges.
While both strategic procurement and category management share a goal of optimizing higher-ed procurement, they differ in scope and approach.
Strategic procurement focuses on aligning purchasing with the institution’s long-term objectives. It involves creating a vision, setting goals, and determining procurement strategies that contribute to the institution’s mission.
Category management in procurement for higher ed takes a more granular approach. It focuses on managing specific product or service categories as independent business units. A category manager is immersed in particular categories to gain a better understanding and manage supplier relationships.
In short, strategic procurement is the overarching strategy. Category management is a way to execute the strategy.
Category management offers several critical advantages to higher education institutions:
A category manager is responsible for managing end-to-end procurement for specific categories of goods or services. Their responsibilities typically include:
An effective category manager must fully understand the importance of category management in higher ed procurement. They need a mix of skills to analyze and support college and university initiatives, including:
Implementing category management in procurement for higher ed requires a structured approach. Each step in the process contributes to efficiency and helps schools achieve their procurement goals. Here are some of the key steps to get started.
Before diving into category management, it’s crucial to evaluate the existing procurement processes within the institution. This involves reviewing past procurement activities, identifying inefficiencies, and identifying areas that require improvement. A comprehensive assessment will provide the foundation for creating a more effective and strategic procurement system.
A university might begin by conducting a spend analysis, reviewing purchasing data from various departments such as IT, facilities management, and academic supplies. If a university identifies that multiple departments are purchasing similar office supplies from different vendors, for example, it may highlight a need for consolidation—achieving cost reductions through volume buying.
The next step is to group institutional spend into logical categories. This helps to organize procurement activities and allows category managers to focus on specific areas of spend. For example, schools can categorize spending into logical categories, such as:
| PROCUREMENT CATEGORIES IN HIGHER EDUCATION | ||
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Athletics
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Facilities & MRO
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Financial Services
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Food & Food Services
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Information Technology (IT)
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Logistics & Travel
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Office & Classrooms
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Professional & Admin Services
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Research & Scientific
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While your categories might be different, segmentation allows for targeted strategies in each category, making it easier to . Knowing what’s in the product development pipeline for these categories can help shape procurement and avoid supply chain concerns.
With spend categories defined, the next step is to appoint category managers with the expertise and skills needed to oversee each category. These professionals will be responsible for developing and executing procurement strategies for their respective categories, managing supplier relationships, and ensuring that the procurement process aligns with institutional objectives.
A category manager becomes the point person for category development.
The next step is to develop tailored sourcing strategies for each category. These strategies should focus on:
Within categories, competitive solicitation is important to achieve cost savings, but category managers should focus on long-term cost of ownership and value rather than just immediate reductions.
Strategic sourcing can be a challenge, which is where specialized expertise comes in. Category managers can look for opportunities to consolidate spending to achieve better volume pricing and bring more spend under contract. At the same time, they can keep a close eye on supply chains and source alternative suppliers in case of problems and force competitive pricing.
Category management strategies work best when you approach them in a collaborative manner. Engaging faculty, department heads, finance teams, and other internal stakeholders helps to understand specific requirements, challenges, and preferences.
Before finalizing an IT procurement strategy, for example, the category manager should meet with faculty members and IT staff to understand the technology needs of different academic programs. This ensures that the chosen software or hardware aligns with the curriculum requirements and that there is sufficient support for the technology after implementation.
Category management is a continuous process of monitoring, optimizing, and refining procurement strategies. It is essential to track and assess supplier performance and identify opportunities for improvement.
Through regular evaluations, category managers can adjust strategies as needed—whether by renegotiating contracts, adjusting category goals, or seeking out new suppliers offering better value.
While larger schools may have the resources for dedicated category specialists, many small schools do not have that advantage. A significant number of academic institutions don’t have dedicated procurement teams and handle purchasing through department heads and finance departments.
However, smaller institutions can still get the benefits from category management strategies. By focusing on high-impact or high-spend categories, a targeted approach can maximize returns. Smaller schools also can augment their procurement by partnering with cooperative purchasing organizations that combine demand from multiple colleges and universities.
E&I Cooperative Services is the only sourcing cooperative focusing solely on the education sector. As a non-profit and member-owned organization, E&I represents more than 6,000 member institutions. By aggregating demand from colleges, universities, and K-12 school districts, E&I can competitively solicit products and services to achieve significant cost reductions from top-tier suppliers and negotiate more favorable terms.
E&I Cooperative Services offers extensive expertise across multiple categories, simplifying the sourcing and contracting process for its members. Procurement professionals and category experts identify the goods and services member institutions need, creating education-focused competitively solicited contracts to help its members streamline the procurement process. With a broad selection of categories to choose from. E&I helps institutions ,find alternate sources to meet their goals. For example, if your institution prioritizes sustainability or supplier diversity, you may find additional resources to achieve these objectives. .
Since E&I acts as an extension of your procurement and finance teams, you can also find goods and services to fulfill emerging needs, such as help meet evolving compliance regulations for Title IX.
Category expertise provides deeper insight into products, product development, and industry trends. This helps you make better decisions about your procurement needs.
Another valuable resource for E&I members is a no-cost Strategic Spend Assessment (SSA). By analyzing spend categories against E&I’s cooperative agreements, members can find areas to consolidate spend, bring more spend under contract, or find additional ways to save money. SSAs also help you develop strategic roadmaps to align future spending opportunities.
What is category management in education procurement?
Category management in procurement for higher ed combines goods and services into logical categories to optimize spending and align with institutional goals.
What is a category manager in higher ed procurement?
A category manager is responsible for overseeing the procurement strategy, supplier relationships, and sourcing for a specific category of goods or services.
How does category management improve efficiency?
Category management improves efficiency by consolidating purchasing, streamlining supplier relationships, and reducing administrative workload.
How does category management improve supply chain resiliency?
By working closely with suppliers and diversifying sources, category management helps institutions mitigate risks, ensuring they have access to alternative suppliers and can adapt to changing market conditions, improving overall supply chain resilience.
Connect with the category management experts at E&I Cooperatives Services to discuss your higher education procurement needs.
