Modification History
Release |
TP Version |
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1 |
PSP12V1 |
Primary release. |
Unit Descriptor
This unit covers planning and implementing procurement category management processes for an organisation.
Category management involves allocating the goods and services procured by an organisation to a category determined by an appropriate and recognised basis. This in turn allows all procurement processes for this category of goods or services to be managed in a way that best suits the characteristics of that particular category. There are many ways to implement categories for procurement, including by type of good or service, by business function, geographically or by other characteristic such as pricing flexibility.
In practice planning and implementing for category management should be integrated within the organisation’s strategic, corporate and budget planning. The process will also be specifically impacted by procurement plans, legislation, regulation, policy and procedures. Broader government policy and government to government agreements may also impact.
Analysis of relevant markets and identification and incorporation of market information into the planning processes is an essential element.
Consideration and incorporation of Corporate Social Responsibility (CSR) principles, sustainment and environmental issues are also essential.
No licensing, legislative, regulatory or certification requirements apply to this unit.
Application of the Unit
The unit applies to those engaged in specialist procurement and contracting roles and is equally applicable to those in broader logistics roles.
Licensing/Regulatory Information
Not applicable.
Pre-Requisites
Not applicable.
Employability Skills Information
This unit contains employability skills.
Elements and Performance Criteria Pre-Content
Elements describe the essential outcomes of a unit of competency. |
Performance criteria describe the performance needed to demonstrate the achievement of the element. Where bold italicised text is used, further information is detailed in the range statement. Assessment of performance is to be consistent with evidence guide. |
Elements and Performance Criteria
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1 Plan for category management |
1.1 Identify and assess organisational structures and business requirements from corporate planning documents in the context of suitability to adopt category management approaches for procurement and contract management. 1.2 Develop and use effective communication strategies to engage with internal stakeholders, external and market stakeholders about category management approaches, product/services to be category managed, market and supply chain conditions. 1.3 Develop a category management plan based on category management principles for each category to be managed that includes outcome based, transparent and manageable performance metrics for category managed items and services. 1.4 Obtain senior management approval for the category management plan. 1.5 Develop outcome based processes and guidelines to support category management. 1.6 Identify staff skills and training and development opportunities related to category management and incorporate these into professional development plans. 1.7 Identify and interrogate organisational Enterprise Resource Planning (ERP) and document management systems in order to gather and analyse data pertaining to the level of spend on various procurement types. |
2 Define categories |
2.1 Identify and analyse current procurement options adopted by the organisation and other procurement options that are available in the marketplace. 2.2 Identify market, procurement and contract management trends, opportunities and risks relevant to categories. 2.3 Identify and engage relevant internal stakeholders to assist in defining categories. 2.4 Define procurement categories using a recognised basis. 2.5 Identify and implement appropriate systems to support category and contract managers. |
3 Implement category management |
3.1 Develop market strategies for categories and act on them as appropriate to the organisation. 3.2 Implement the category management plan. 3.3 Implement strategies to manage and maintain productive relationships with identified suppliers. 3.4 Resolve operational issues raised by contract users and suppliers. 3.5 Capture and analyse data from a range of sources about the category performance against the performance metrics on a regular basis and report category performance to appropriate corporate systems. 3.6 Regularly review buying organisation, industry and market category positions to identify trends , opportunities and risks and adjust direction as indicated by the results of the review. |
4 Review category management |
4.1 Review and monitor performance metrics on a regular basis to ensure efficiency and effectiveness is achieved and maintained in category management processes. 4.2 Consult appropriately with stakeholders, provide performance feedback and recommend corrective or improvement actions as necessary. 4.3 Monitor buying organisation, industry and market performance and ensure organisational strategies are modified where appropriate. 4.4 Monitor staff skills and provide appropriate skilling upgrades. |
Required Skills and Knowledge
This section describes the skills and knowledge required for this unit. |
Required skills |
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Required knowledge |
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Evidence Guide
The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package. |
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Overview of assessment |
Competency must be demonstrated through an ability to predict future organisational needs from the market, based on the analysis of past and current organisational and market data. A clear understanding of commercial and business trends and behaviours is required. Current planning, emerging legislative, regulatory, social, business and market trends must also be assessed in order to predict future market activities. Strategies must be developed to facilitate appropriate arrangements for category management planning and implementation to complement and enhance the achievement of organisational outcomes in a more efficient and effective manner. |
Critical aspects for assessment and evidence required to demonstrate competency in this unit |
Assessment must confirm an ability to:
Consistency in performance Competency can be demonstrated by providing evidence of undertaking a range of relevant work tasks in an actual or simulated procurement environment on a least two separate occasions. |
Context of and specific resources for assessment |
This unit of competency is to be assessed in the workplace or a simulated workplace environment. Participants may need to access:
Case studies that incorporate challenges on which to develop strategies to deal with future sources of goods and/or services and the methods that may need to be employed to secure future requirements. |
Method of assessment |
Suggested assessment methods include:
In all cases, practical assessment should be supported by questioning to assess underpinning knowledge and those aspects of competency which are difficult to assess directly. Questioning techniques should suit the language and literacy levels of the candidate, but not compromise the integrity of the assessment. |
Guidance information for assessment |
Evidence must be gathered over time in a range of contexts to ensure the person can achieve the unit outcome and apply the competency in different situations or environments. Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended.
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Range Statement
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included. |
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Corporate planning documents may include: |
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Suitability may include: |
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Category management means: |
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Communication strategies consider: |
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Internal stakeholders may include: |
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External and market stakeholders may include: |
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Category management plan may include: |
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Category management principles means: |
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Outcome based means: |
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Performance metrics may include: |
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Senior managemen t may include: |
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Staff skills may be: |
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Enterprise Resource Planning (ERP)and document management systems may include: |
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Level of spend includes: |
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Procurement options may include: |
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Trends, opportunities and risks relevant to categories includes: |
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Recognised basis may include: |
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Appropriate systems should consider: |
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Market strategies may include: |
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Strategies to manage and maintain productive relationships may include: |
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Sources may include: |
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Category performance may include: |
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Trends, opportunities and risks may include: |
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Efficiency and effectiveness may include: |
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Consult appropriately may include: |
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Organisational strategies may include: |
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Unit Sector(s)
Procurement and Contract Management
Custom Content Section
Not applicable.