Taken as a whole, the US government represents the largest buyer in the world. While there are many unique purchasing needs across the various federal agencies, there is roughly $287 billion in areas of common spending. Within the past several years, the Office of Management and Budget (OMB) classified those areas into categories to be managed government-wide, with the goal of driving more efficient buying decisions.
The concept, already used within a variety of business organizations, is known as category management. The US government developed 10 categories in total; information technology, professional services, security and protection, facilities and construction, industrial products and services, office management, transportation and logistics services, travel and lodging, human capital, and medical.
Although each category has touchpoints in different departments throughout the federal enterprise, one department or agency is designated as the category lead, and puts forward an executive--the category manager--to drive the reform effort.
In the following interview Lisa Roberts, the Category Manager for Transportation and Logistics Services, highlights her experiences developing the category's functionality and kick-starting its strategic initiatives. The conversation has been edited for length and clarity.
DTJ: Thanks for taking the time to interview today. To start, could you outline the history of category management within the federal government, and what it's meant to accomplish?
Ms. Roberts: Absolutely. First I want to say thanks to the NDTA for its support to the DOD. NDTA has been an important partner, and we have that common interest in providing joint logistics solutions to support America's warfighters, so thank you for that.
Category management has its roots in the Office of Management and Budget's strategic sourcing initiative, going back to 2003. It was in 2014, though, that the OMB shifted from strategic sourcing--which is really about managing purchases that are priced individually across thousands of procurement units--to managing entire categories of goods and services through common spend and total cost through category management.
Today, strategic sourcing is just one of the key levers of category management that's used to create supply chain value. The other levers include things like demand management and supplier relationship management. But think of category management as a federal-wide initiative, spearheaded by OMB, that just gets us working together on common spend areas to buy smarter and more like a single enterprise.
It has been a concept that's been around for some time, and DOD is not the only user of category management. There are many commercial companies that employ the category management principles when they buy and manage commodities. And then there are other governments like the UK that have also had success with category management.
So there are lots of benefits to it. It can help reduce duplication; it can align requirements to better manage demand; it can leverage buying power.
The other benefit is it puts data and metrics in one place to help organizations make better business decisions. And then for industry, it hopefully makes it easier to do business with the government, through increased...