The Category Levers Triangle

1. Introduction

Procurement professionals know that category management is essential for maximising value from external spend. To manage a category effectively, you need a strategy and a plan—and for that, you must know which levers to pull.

Expectations for category managers have evolved. While they have long been responsible for ensuring quality, availability, and service, as well as driving year-on-year TCO reductions with bottom-line impact, they are now also expected to contribute to business development, innovation, sustainability, and risk management.

As responsibilities expand, so must the tools category managers rely on. To address this challenge, this article introduces the Category Levers Triangle — a structured, intuitive, and practical framework. It draws on insights from existing models while adding elements to create a more comprehensive approach that covers all key value areas relevant today.

The following section describes the model. The terminology used aligns with common procurement language. However, as procurement often lacks precise definitions, Appendix I clarifies key terms to avoid confusion, while Appendix II provides further details on the framework’s purpose and rationale.

2. The Framework Structure and Logic

2.1 Overview

The following sections describe the different lever levels, starting with the three Level 1 levers, followed by a summary of all 12 Level 2 levers. Across these 12 Level 2 levers, there are a total of 130 Level 3 levers. This article presents three Level 2 levers in full detail, including all their corresponding Level 3 levers. These three examples illustrate the depth and practicality of the framework, showcasing how each lever can provide concrete, actionable strategies for category managers.

2.2 Level 1 levers

The three main levers represent the key elements for maximising value realisation:

• Shape & Scope – Shape and refine the category scope to unlock value potential by optimising supply models, sourcing collaboration approaches, specifications, volumes, and circularity principles.
• Secure & Commit – Secure value through optimised supplier selection and commitment mechanisms, creating optimal conditions for value realisation.
• Realise & Enhance – Strengthen contract execution, compliance, supplier performance management, and category governance to realise and enhance value beyond contractual commitments.

This first level is intentionally broad rather than highly specific. It helps users assess where category management improvements are needed. Are bold actions required to reshape and redefine the category? Are alternative supplier selection, negotiation, or agreement approaches necessary? Or is the biggest opportunity in optimising execution to ensure commitments deliver value?

2.3 Level 2 levers

Level 1 Shape & Scope is divided into the following four Level 2 levers:

• Supply Model Transformation - Transform the supply model, redefine the company’s role in the supply chain, and enable new sourcing collaboration models.
• Circularity Integration - Integrate circular economy principles into procurement to enhance sustainability and cost efficiency.
• Specification Change - Optimise product and service specifications through innovation, harmonisation, standardisation, and modularisation.
• Volume Leverage - Adjust volumes for sourcing and supplier negotiations to maximise leverage.

Level 2 Secure & Commit is divided into the following four Level 2 levers:

• Minimum Requirements Optimisation - Define and refine minimum quality, service, logistics, and ESG requirements for suppliers.
• Supplier Base Optimisation - Ensure that the right suppliers participate in sourcing processes and optimise the supplier base to balance competition, diversification, and consolidation.
• Competitive Selection Management - Apply advanced pricing analysis, RFX techniques, e-auctions, and negotiation strategies.
• Supplier Contracting & Relationship Improvement - Optimise supplier contracts and relationship strategies to maximise value, mitigate risks, and ensure long-term alignment.

Level 2 Realise & Enhance is divided into the following four Level 2 levers:

• Contract Management Optimisation - Ensure full realisation of contracted value through structured contract management and enforcement.
• Collaborative Value Creation - Enhance collaboration between internal functions and suppliers to generate additional value beyond contractual agreements.
• Internal Demand and Compliance Management - Develop and enforce strategies to optimise demand and ensure compliance with internal policies.
• Category Organisation Optimisation - Enhance internal organisation and governance within the category framework.

The Level 2 descriptions remain high-level, but they help users quickly identify which levers may drive improvement.

2.4 Level 3 levers - Examples

In the following paragraphs, three Level 2 levers are presented in full detail, including all their corresponding Level 3 levers. These levers offer specific, concrete actions to create value and are often the most practical for developing clear and actionable strategies.

Example 1: Specification Change

Level 2 Specification Change is divided into four groups, each with three Level 3 levers:

Cost and Value Optimisation

• Make a product obsolete by eliminating its function altogether.
• Optimise costs during the design phase, ensuring that only value-adding features remain (value engineering).
• Analyse existing products and services to eliminate unnecessary costs while maintaining required functionality and performance (value analysis).

Innovation

• Deliver the same function through a different, substitute product.
• Deliver the same function through an alternative existing technology.
• Develop the same function through new technology or an innovative concept.

Design for X

• Design products to enhance key attributes such as quality, functionality, service, and sustainability.
• Design products for ease of manufacturing to enhance production efficiency.
• Design products to align with sourcing strategies and supplier capabilities.

Standardisation and Modularity

• Harmonise specifications to reduce complexity and improve interoperability.
• Standardise specifications, avoiding unnecessary customisation and complexity.
• Establish modular designs or building-block approaches to enhance flexibility and reusability.

Example 2: Supplier Base Optimisation

Level 2 Supplier Base Optimisation is divided into three groups, each with up to four Level 3 levers:

Supplier Communication and Engagement

• Clearly communicate total spend potential to inform suppliers.
• Highlight additional benefits and opportunities for new suppliers to encourage participation.
• Use the threat of competitive bidding to engage incumbent suppliers.

Diversification and Competitive Sourcing

• Involve more suppliers in competitive bidding.
• Engage non-traditional suppliers or start-ups.
• Engage suppliers from regions and markets with competitive sourcing advantages.
• Involve local suppliers to reduce emissions and shorten lead times.

Supplier Consolidation and Risk Mitigation

• Consolidate volume with fewer suppliers.
• Redistribute volume among suppliers to consolidate spend with selected partners.
• Qualify multiple suppliers (from different regions) to increase sourcing options and reduce supply risks.
• Award business to multiple suppliers to foster competition throughout the contract duration.

Example 3: Collaborative Value Creation

Level 2 Collaborative Value Creation is divided into four groups, each with three Level 3 levers:

Innovation and Product Development

• Involve suppliers early in product/service development to foster innovation.
• Collaborate with suppliers on product development to optimise quality, costs, sustainability, and other key attributes.

Business and Sales Development

• Connect suppliers with sales and customers to enable innovation and identify market opportunities.
• Leverage supplier market intelligence to uncover new business opportunities.
• Use supplier partnerships to strengthen the brand’s marketing efforts.
• Leverage procurement relationships to facilitate cross-selling opportunities for the company’s sales team (supplier-to-customer conversion).

Sustainability and Risk Management

• Work jointly with suppliers to drive sustainability improvements.
• Collaborate with suppliers to manage commodity price fluctuations and mitigate risks across the supply chain.

Operations Optimisation

• Improve demand forecasting and planning processes in collaboration with suppliers.
• Optimise order sizes and frequency.
• Implement consignment stock.
• Implement vendor-managed inventory (VMI) systems.
• Optimise inbound and outbound logistics.
• Adopt low-emission freight solutions, such as electric vehicles and alternative fuels, to improve sustainability performance.
• Work with suppliers to reduce waste, improve process efficiency, and implement just-in-time (JIT) manufacturing.
• Optimise requisition-to-pay processes through digitalisation and automation where feasible.

Supplier Development and Relationship Management

• Help improve supplier performance by sharing best practices, training, and other support (supplier development).
• Enhance relationships with key suppliers through targeted engagement initiatives.

3. Key Takeaways

In the previous sections, an alternative three-level lever framework was introduced. The Category Levers Triangle is designed specifically for category managers, covering all key value areas relevant today. It helps users systematically identify levers to reshape and redefine the category, select suppliers and establish commitments, and realise and enhance value.

By applying this framework, procurement teams can take a structured approach to generating ideas for category management optimisation, ensuring that value is not only identified and captured in commitments but also is realised and enhanced.

Whether you are developing a new category strategy or refining an existing one, consider which levers can unlock the greatest potential for your organisation.

This article provided an overview of the framework, including the three Level 1 levers and a summary of all 12 Level 2 levers. Additionally, three of these Level 2 levers were presented in full detail, including all their corresponding Level 3 levers. The remaining nine Level 2 levers were summarised but not explored in depth, leaving much more to discover. To learn more about these additional levers or how this framework can support your category strategy development, please reach out.

Appendix I - Definitions

The Procurement function uses many different terms, but their meanings can vary depending on geography or organisation. To avoid confusion, here are definitions of terms used in this article:

• Procurement refers to the overarching process of acquiring goods and services from external suppliers. It encompasses all of the processes described below.
• Category refers to a group of purchases typically sourced from the same set of suppliers.
• Category value includes outcomes such as total cost of ownership (TCO) reduction and improvements in business development, innovation, sustainability, and risk management.
• Category management is a cross-functional approach to managing categories. It consists of developing a plan, which is implemented through sourcing and contracting projects, contract and supplier management, and the requisition-to-pay process.
• Sourcing and contracting involves identifying, evaluating, and selecting suppliers, as well as agreeing on commitments. While competitive supplier selection is the most common approach, collaborative methods are also included.
• Value realisation refers to capturing value by executing agreements, for example, by placing orders under contracts with improved conditions. (Simply agreeing on a better contract does not constitute value realisation.)
• Contract and supplier management refers to the processes that follow contracting, ensuring that obligations are met, value is realised, and where possible, enhanced.
• Category plan is a document that includes: Internal analysis of spend, requirements, specifications, contracts, and internal processes.; External analysis of the supply market, value chain, cost drivers, cost structures, suppliers, competition levels, trends, and regulatory factors; A category strategy that defines the desired future state and the proposed approaches to achieving it, including a combination of levers to pull; Concrete initiatives with a defined scope, goals, approach, and deliverables; a timeline with milestones; risks and mitigation actions; and required resources.
• Category manager refers to the person responsible for managing a category. The role primarily involves strategic tasks but may also include tactical activities such as running tenders. It typically does not cover operational tasks but requires overseeing these processes and optimising them in collaboration with the operational team.

Appendix II - Purpose and Rationale

The framework is designed as a practical tool to help users generate ideas for their category strategy, which typically involves combining multiple levers into a tailored approach.

The levers are not category-specific, and some may be more relevant to certain categories than others. Additionally, the wording is generic, meaning users may need to adapt it to align with terms commonly used and understood by their category stakeholders.

The levers mentioned in this article do not include examples of technology and tooling. This may seem inconsistent, as other operating model levers—such as process, governance, and organisational levers—are referenced selectively. However, technology and tools have been omitted purely for practical reasons. Including them would be highly repetitive, as they are relevant to almost every lever, enhancing both efficiency and results.

Many existing frameworks offer valuable guidance, some publicly available and others proprietary. The framework proposed in this article has several key aspects that differentiate it from those the author is familiar with:

• Target audience – The framework is tailored for procurement professionals responsible for managing categories.
• Structure – Often levers are grouped based on factors such as business/profit impact vs. risk/supply market complexity, as in the Kraljic matrix. While this is useful, category strategies often require a combination of levers, and some may not always align with the matrix. For example, a “leverage strategy” for low-complexity, high-impact categories may need to evolve from pure leverage to supplier collaboration once cost optimisation through leverage reaches its limits. This framework organises levers differently. It is structured around three main levers that are simple and intuitive for category managers, helping users identify where improvements are needed. Are bold actions required to reshape and redefine the category? Are alternative supplier selection, negotiation, or agreement approaches necessary? Or is execution the bottleneck?
• Value realisation – Explicitly included as a key focus area. Lever 3, Realise & Enhance, ensures value realisation and enhancement, addressing a common bottleneck in procurement. For example, optimising specifications, selecting the best suppliers, and agreeing on well-structured contracts can still fail to deliver results due to ineffective implementation, weak contract management, poor supplier management, or flawed requisition-to-pay processes.
• Comprehensive – The framework encompasses a wide range of levers that can be applied to category strategy development. It consists of three Level 1 levers and 12 Level 2 levers. Across these 12 Level 2 levers, there are a total of 130 Level 3 levers, ensuring a comprehensive approach. With ESG and regulatory compliance playing an increasingly important role in procurement, the framework explicitly includes dedicated levers for these areas. It also incorporates levers that drive business development and innovation. Additionally, it addresses governance, mandates, and category organisation—critical success factors that are often overlooked.