Category Management Toolkit: Demand Management Process†
What is Demand Management Process?
The Demand Management process is an approach to managing external spend through the targeting of the rationale, quantity and specification of purchases rather than the price. Typically this involves aligning challenged business requirements with products or services procured.
Where does it fit in with Category Management?
- Supplier Performance Management
What is included in this guide?
- The Demand Management process
- Key Stakeholder Involvement
- Sample Plan
- Stage Review
(Demand Management Process Summary)
The Demand Management Process
Demand Management process is applicable to all commodities where internal demand and consumption can be influenced to reduce costs. It requires strong buy-in and implementation by stakeholders (budget holders). The process is run through a cross-functional team in a manner consistent with Category Management – see Key Stakeholder Involvement section below for more details.
A Demand Management cycle can be triggered by a variety of events, such as:
- Need for cost reduction
- In support of a strategic sourcing / category management initiative
- Change in external market (technology, suppliers).
Examples of Demand Management application include:
- Travel – make better use of technology and lower cost alternatives
- Energy – reduce energy consumption through technology and good practice/education
- Office equipment – match the equipment to the office need.
The process is a six stage, cross-functional approach, to manage external spend through the targeting of the rationale, quantity and specification of purchases rather than the price, typically through the alignment of challenged business requirements with products or services procured.
(Demand Management Process)