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Jonathan O’Brien , Category Management in Purchasing: A Strategic Approach

to Maximize Business Profitability, Kogan page, London (2009) ISBN
9780749452575 320pp

Article  in  Journal of Purchasing and Supply Management · June 2010

DOI: 10.1016/j.pursup.2010.03.005

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 ARTICLE IN PRESS
Journal of Purchasing & Supply Management 16 (2010) 149
Contents lists available at ScienceDirect
Journal of Purchasing & Supply Management
journal homepage: www.elsevier.com/locate/pursup
Book review
Category Management in Purchasing: A Strategic Approach to
Maximize Business Profitability, Jonathan O’Brien. Kogan page,
London (2009). 320pp, ISBN: 9780749452575
Category management refers to the collaborative process
between suppliers and retailers, aimed at managing categories
instead of individual products or brands. However, the book
‘category management in purchasing’ has a quite different scope,
it is not written from a retailing perspective. The book deals with
issues of spend management, purchasing portfolio management
and change management for all types of organizations. According
to the author, Jonathan O’Brien, category management is ‘‘the
practice of segmenting the main areas of organizational spend on
bought-in goods and services (y), seeking out and implementing
breakthrough opportunities that will generate significant value
for the organizations’’ (p. 2). Value might take the form of
leveraging price reductions, reducing total cost of ownership,
reducing supply chain risk or securing increased innovation from
the supply chain.
The book contains 10 chapters, a glossary and two real-life
case studies. Chapter 1 introduces key concepts and emphasizes
the relevance of category management today. Chapter 2 discusses
three foundations (sourcing strategically, managing the market,
driving change) and four pillars of category management (break-
through thinking, customer focus, cross-functional teams, facts
and data). The introducing chapters stress that category manage-
ment is all about radical improvements and the management of
change.
The core of the book is a step-by-step approach for the
implementation of category management (chapter 3). The
category management process consists of 5 stages of which all
labels start with the letter ‘‘i’’. The first or initiation stage is
presented in chapter 4. It is about the planning and scope of the
project, and most important the cross-functional team formation.
The project team should deploy a number of tools and
preparatory analyses, such as STP (Situation-Target-Proposal),
stakeholder mapping, communications planning, analysis of the
balance of power between the buyer and supplier, defining the
business requirements. Chapter 2 explores the second stage
insight, examining the need for gathering (market, supplier and
organizational) data to gain a greater understanding of the
category. An interesting part is supplier conditioning: the process
of setting boundaries in the mind of suppliers, in order to
stimulate favorite responses and to achieve a greater overall
benefit (according to O’Brien one could call it ‘‘a mild form of
manipulation’’, p. 98). Another important activity is determining
where the value is added in the supply chain and identifying
opportunities. Additional analyses are PPCA (purchase price cost
analysis), breakdown of overheads, external environment analysis
doi:10.1016/j.pursup.2010.03.005
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(Porter’s competitive forces analysis), and most prominent
Kraljic’s portfolio analysis. Chapter 6 explores the third stage
innovation, aimed at generating different solutions and future
sourcing strategies. The fourth stage implementation is discussed
in chapter 7. This stage contains a series of activities, including
the preparation of a detailed implementation plan, the manage-
ment of change, identifying and contracting (new) suppliers.
The final step is the improvement stage with a focus on the
management of supplier relationships and continuous improve-
ment. Chapter 9 concentrates on the governance and support
structure; chapter 10 takes a look at the future, considering the
challenges facing organizations and the developing role of
category management.
Jonathan O’Brien is director and co-owner of a purchasing
consultancy and training provider. The book represents the
culmination of O’Brien’s years of experience working in purchas-
ing. The book aims to provide the reader with a thorough insight
into the principles and application of category management. The
book is targeted at (purchasing) practitioners ‘‘making buying
decisions’’, helping them to identify and implement ‘‘new power-
ful sourcing arrangements that realize significant benefits’’ (back
cover), not so much at an audience in the academic world. This
conclusion is confirmed by the limited list of references, contain-
ing mainly management books and no journal papers. Missing in
the book are references to other publications and theories, for
instance the MSU-model or more advanced purchasing portfolio
models. What is missing too is a focus and a more comprehensive
view on developing (differentiated) purchasing strategies, the
conditions favouring them and the anticipated results. The book
provides a list of 11 unlike and incomparable possibilities (‘typical
options’, p. 170), without referring to conditions or portfolio/
matrix positions. The case studies are not convincing in that
respect.
This raises the question about the contribution of the book to
the current body of knowledge. I can imagine that this book, with
additional instructions of an experienced practitioner, would
create a practical guide to category management in purchasing. A
positive feature of this book consists of the many practical tools
and detailed recommendations. In addition, the emphasis on the
management of change and ‘making it happen’ will be appre-
ciated by many practitioners. However, the scope and the benefits
of the book are too limited to make it of a substantial interest to
an academic audience.
Cees J. Gelderman
Department of Management Sciences, Open University of the
Netherlands, the Netherlands
E-mail address: kees.gelderman@ou.nl