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Category managers are laser-focused on consumer needs and wants. But meeting those needs and wants goes way past buying. It also requires them to integrate a wide variety of internal and external stakeholder disciplines, all working toward the shared goal of making customers happy. Industry experts say best-in-class grocery retailers don’t silo category managers off from other stakeholders but give them the latitude to truly become the strategic leader for their product categories.

Peter Leech

“Category managers are at the heart of a grocery chain’s operations and ensure that grocers build strong, reliable vendor and distributor relationships that improve terms and supply chain efficiency,” says Peter Leech, managing director of digital commerce and retail at The Partnering Group in Lake Forest, Ill.

Internally, they lead cross-departmental functions, helping to synch up marketing, sales, and the supply chain. “A great category plan is only as good as the ultimate execution,” says Leech. “So, while the category manager’s direct responsibilities are not necessarily inclusive of these related functions, they are heavily dependent upon them. Therefore, it would be wise to devote time to assessing where things may break down and taking additional steps to set up others for success through awareness and timely communication.”

GETTING ON THE SAME PAGE

Forecasting and inventory management can be a challenge, he continues. “If the logistics team isn’t aware of the increased demand from a promotional campaign, they might not secure enough transportation, leading to potential sales losses. Another issue often arises from vendor compliance, where suppliers may not meet the agreed standards or timelines, impacting inventory and sales performance,” says Leech. “The old adage is that ‘you can’t sell from an empty wagon.’ Without proper communication, the product to support an activity may be late or of insufficient quantity, thus sub-optimizing the desired outcome.”

Category management plans include a strong focus on having ample supplies on hand to meet consumer demand.

‘Category managers are at the heart of a grocery chain’s operations and ensure that grocers build strong, reliable vendor and distributor relationships that improve terms and supply chain efficiency.’

Leech suggests category managers lead joint business planning (JBP) initiatives to integrate cross-function internal teams with corresponding ones on the vendor side. This helps the organizations become more closely aligned on demand, he says. Leech also supports not letting the perfect become the enemy of the good. “If a full joint business plan is not possible, there are key elements of cross-functional planning which can still be deployed,” he says.

JBP proponents say it is one of the most effective ways for vendors and retailers to align their missions, driving profitable growth in the process. Proponents caution that JBP is not a one-and-done annual exercise but an ongoing process to minimize costs and maximize bottom-line results. They remind even those familiar with JBP that it is a continuing learning process and requires retailers and vendors to standardize the procedure, agree on shareables and provide ongoing training to realize the full potential of the initiative.

Graeme McVie

A category manager’s contacts with external stakeholders in the supply chain’s performance might encompass warehouse and direct store delivery (DSD) product suppliers, distributors, and other partners such as  third-party logistics (3PLs) firms, says Graeme McVie, senior managing director of global data and analytics at Logic Information Systems, Minneapolis.

The internal stakeholder list includes in-house “supply chain and logistics colleagues responsible for tracking, ordering, receiving, processing, distributing and replenishing inventory,” he adds. And it extends to colleagues in store operations who “can provide up-to-the-minute feedback on unexpected sales patterns or inventory situations” and those fulfilling orders placed online for pickup.

Marketing is a critical touchstone, says McVie, who suggests category managers communicate with colleagues to understand how advertising and consumer promotions impact on demand, sales, and inventory.

“Retailers have been investing in supply chain forecasting/optimization solutions to obtain accurate forecasts for likely sales, which can then be translated into more accurate orders,” says McVie. “These traditional supply chain forecasting/optimization solutions have provided reliable and accurate forecasts for regular demand, but they have sometimes been less accurate when it comes to forecasting promotion or markdown/clearance volumes and the broader impact that promotions or markdowns/ clearance can have across other items in the category [due to] cannibalization and halo effects.”

As a result, he continues, “More retailers are now adopting advanced promotion/markdown/clearance planning/forecasting/optimization solutions and integrating these forecasts into their supply chain forecasts.”

HOW GOOD IS YOUR DATA?

Good data is at the core of successful replenishment strategies, according to Georges F. Mirza, founder-principal and product strategy and innovation advisor at Chandler, Ariz.-based ComTask.

Georges Mirza

“Don’t think you’ll come up with a 10-year roadmap and stick to it. You’ve got to be agile and adjust along the way,” says Mirza.“We say we have data. We have great AI (artificial intelligence), and it can do all these things. But look at the data that the AI is working with. It’s not relevant or accurate enough to give you the right answers. So until you get that, you’re working off assumptions, and that’s not likely to lead to positive results.”

‘A great category plan is only as good as the ultimate execution. So, while the category manager’s direct responsibilities are not necessarily inclusive of these related functions, they are heavily dependent upon them.’

Retailers with reliable data have plenty of tools to help support the supply process. “Leading grocers are leveraging ERP (enterprise resource planning) systems to integrate operations, including inventory, order processing, and logistics,” says Leech. “Data analytics is another critical area; using predictive analytics and AI/ML (machine learning) helps category managers, sourcing teams, and store operations better understand demand forecasts and adjust inventory accordingly.”

McVie adds that a growing number of retailers are investing in “supply chain control tower capabilities that provide visibility to inventory and logistics information at all internal and external supply chain nodes.”
Cloud-based data platforms are also positively impacting the secure sharing of data and insights with suppliers and logistics partners, says McVie.

DELIVERING IN THE LAST MILE

The experts also point to the role of category managers in helping grocers navigate the last-mile challenge.

“Category managers influence last-mile delivery by working closely with space management and retail operations to optimize store layouts and product placements for quick restocking and ensuring freezer, bunker and chiller holding power is managed with discipline,” says Leech. “Category managers must prune their assortments to avoid SKU proliferation and ensure proper facings on best sellers and highly valued, unique items. Partnering with local suppliers also plays a crucial role in reducing transportation times,” he adds.

In addition, says McVie, “Category managers can play an important role in connecting what is happening in their stores with what is happening in the upstream supply chain. By rapidly identifying issues that are happening with their stores and then communicating any out-of-stock or over-stock situations to suppliers, they enable the suppliers to make any appropriate last-minute adjustments to deliveries. This is especially important when products are delivered by DSD and retail servicing personnel are going to be onsite on a frequent basis and can make adjustments in relatively short order.”