How AstraZeneca is Digitizing its Category Management Framework
- Category Management
- Life Sciences and Pharma
AstraZeneca, a global biopharmaceutical company, recently undertook a massive project to overhaul their category management strategy. Led by Tom Smolko, Associate Director of Procurement, the project aimed to increase the value of category management while adhering to many of AstraZeneca’s mission and core values. AstraZeneca’s goal is to deliver life-changing medicine to patients around the world while putting science first and being entrepreneurial.
In 2019, the procurement team saw the opportunity to further develop their category approach while applying a clinical framework to the project. With a scientific mentality, they set out to digitize the process and drive clear results for the organization.
Rethinking and Relaunching
When Tom Smolko was asked to begin managing new categories at AstraZeneca, he found himself questioning the process. Starting out, learning a new area of purchasing, he focused on just iterating on previous strategies. But in time he came to realize that there was more to gain by starting from the bottom. When the organization brought in a new CPO, the team as a whole took a harder look at how they were developing category strategies in the first place.
The team quickly established some clear goals. First, they wanted to make sure their strategies became reality – they wanted to drive through to full implementation. Second, they wanted to make sure their framework was comprehensive. That meant incorporating category segmentation, risk reduction, specific targeting and more.
The procurement team established their goals and approach by mid-2019, and set out to implement it over the next several months.
Combining with Technology Implementation
The leading question for Tom Smolko and his team was simple: how can we take this category management approach and align it with our technology? The end goal was to make sure that the team could enable the business as a whole to realize the value that they were creating.
One of the first steps was using technology to improve internal communications. AstraZeneca built a framework website for guides, templates, best practices and more to be shared internally, helping align various teams to their central goals.
Launching the Basics
The next step was to launch a full strategic procurement technology platform with category management at the center. The team wanted to tie together all the value-driving pieces along the procurement lifecycle, but to position category management centrally. When implementing their solution suite, they put category management front and center on the homepage, while other workflow steps like sourcing and supplier management were all based on it.
They also put an emphasis on future-proofing the system by taking a deliberate approach to data. They added custom data fields for essential areas that have made it easier to search, report and track progress. As a result, they can more accurately track the impact of their efforts and pass that information up to the executive level.
Finally, the organization focused on training. This involved skills-based training as well as technology education. They used the software onboarding process to reinforce skills and best practices, embedding the new category approach at every stage. The result was increased adoption and compliance. All of this launched successfully in the first quarter of 2020.
A Look to The Future
As AstraZeneca continues to advance their category management approach, they aim to focus on connecting their strategy plans to operational execution. According to Smolko, a large piece of the puzzle is tracking activities from end to end in order to measure the complete lifecycle value creation. From there, they’ll dig into more technical advancements including cognitive automation, which will accelerate routine tasks and provide more savings opportunities.
Analytics play a key role in the plan for AstraZeneca. Cross-platform analytics provide the basis for the entire platform. Smolko indicated that embedded analysis tools, which can analyze data from multiple stages of the procurement lifecycle, will be a major part of future implementation efforts. These analysis and assessment tools also feed into recommendation engines. By drawing on big data, recommendation engines can provide quick business decisions at the click of a button, helping human users to react more quickly to changing scenarios.