Category Analytics Solution

Optimize spend through analytics across multiple procurement categories

Companies managing billions in spend look to their CPO (Chief Procurement Officer) and procurement teams to find the spend optimization actions that will have the most impact. But with the massive amounts of data being generated and the numerous possible levers for different spend categories, it’s difficult to know what areas to concentrate on and where the greatest potential lies.

Category Analytics Solution (CAS) analyzes category-specific transactional data from a company’s spending to determine the most effective actions teams can take to immediately optimize spend and hit their targets. It covers category-specific commercial, demand, and process levers.

50+

deployments

globally across multiple sectors since 2018

5-20%

typical savings identified

in 1-4 weeks across multiple levers

~20%

increase

in identified savings vs. Excel-based analytics

Video

Last-mile small-parcels category video

This video shows a demo of the CAS platform for the small-parcel-and-courier-shipments spend category.

How Category Analytics Solution works

Analyze transactions

CAS runs in-depth sourcing analytics on millions of transactions and applies a set of proven, category-specific levers to identify and size savings opportunities across all TCO levers

Solution expertise

A CAS expert works with the category team to aggregate all the transactional spend data from many disparate sources (spend data in point solutions, data from suppliers, and any user-generated data from spreadsheets), and uploads it into a central, cloud-based CAS platform for analysis

Find baseline

CAS uses machine learning to categorize and harmonize spend for a reliable and comparable baseline for advanced analytics to be able to draw meaningful insights

External analysis

The spend data is compared with external indices, cleansheet cost models, and third-party benchmarks to determine savings potential

Identify savings opportunities

CAS surfaces the actions with the greatest potential savings and allows users to drill down into the data to unearth further granular insights

Flexible functionality

A dynamic web-based user interface allows users to drill down into the data set; generate spend charts, bottom-up savings calculations, and what-if analysis; monitor value capture; and run spend analysis reports (ready for supplier negotiations)

Refresh data

Category teams can refresh the data-set periodically and use CAS to digitally manage the spend and opportunities in their category

Features

The CAS Platform offers powerful visualizations and analytics to ensure users continue to unearth critical savings opportunities

Multiple dimensions

Views of transactional spend data across multiple dimensions to better understand the category

Savings dashboard

A savings overview across commercial, demand, and process levers and scenarios

Drill-down capability

Ability to drill down into transactional data to uncover actionable opportunities

Our impact

Driving significant impact for an advanced industries company

Unlocking opportunities for a leading retailer in North America

Why CAS?

Best of McKinsey IP

CAS leverages McKinsey’s deep experience from thousands of category optimization engagements to estimate and identify cost savings. We’ve built McKinsey’s IP for each category across commercial, demand, supply, and process levers directly into the tool to ensure our analysis uses the latest industry knowledge.

Full transparency into spend categories

The CAS platform provides a central location for users to perform complex calculations and advanced analytics on their company’s spend data at a transactional level. By automating much of the savings identification process and applying powerful analytics to a company’s entire transactional data set, CAS frees up time for category managers to uncover new insights and take immediate action.

Best-in-class resources

CAS combines advanced analytics with guidance from category experts, strategy resources, and training programs to ensure that users make the most out of the insights generated from the platform.

Continuous insights

CAS offers a cloud-based solution to ensure clients see continuous improvement well after the platform is deployed. After users act on the initial savings actions, they can upload new data periodically to identify new opportunities and continue drilling down into the most up-to-date information. Any new updates to benchmarks, levers, analytics and user-interface are immediately available to all users.