Maverick spend, sometimes Rogue Spending, Non-compliant Purchasing, Off-contract Buying, Ad-hoc Purchasing or Independent Sourcing, refers to the practice of purchasing goods or services outside of the established procurement policies, procedures, and controls of an organization. This can include purchases made without proper authorization, outside of approved supplier contracts, or without the use of preferred suppliers.

Maverick spend can lead to a range of negative outcomes for an organization, including higher costs, reduced process efficiency, decreased compliance, and increased risk. When purchases are made outside of the established procurement process, it can be difficult for procurement professionals to manage supplier performance effectively, negotiate favorable pricing, or identify opportunities for cost savings.

To address maverick spend, organizations typically implement policies and procedures to promote compliance with procurement policies, and specialized software to help monitor and manage procurement activities. This can include the use of spend analytics, supplier management systems, and e-procurement platforms to streamline the procurement process and improve visibility into purchasing activities.

By reducing maverick spend and increasing compliance with procurement policies, organizations can improve their financial performance, reduce waste and inefficiency, and better manage risk.

Best Alternative to a Negotiated Agreement (BATNA) is a term used in negotiation theory to describe a party's course of action if a negotiation fails to produce an agreement. In other words, BATNA is the next best option available to a party if a negotiation does not result in a satisfactory outcome.

BATNA is important in negotiations because it provides a standard against which the proposed agreement can be evaluated. If the proposed agreement is better than a party's BATNA, it may be in that party's interest to accept it. If the proposed agreement is worse than a party's BATNA, then it may be in that party's interest to reject the agreement and pursue their BATNA instead.

A strong BATNA is considered an important negotiation skill, as it gives a party more leverage in negotiations and improves their chances of achieving a favorable outcome. Therefore, it is recommended that parties identify and evaluate their BATNAs before entering into a negotiation.

A Bill of Materials (BOM) is a comprehensive list of all the components, raw materials, sub-assemblies, and parts needed to manufacture a finished product. It is an essential document used in manufacturing and production planning, outlining the quantities required to produce a single product unit.

The BOM includes detailed information about each item, including part numbers, descriptions, quantities, and unit costs. It also includes information on how the components are assembled, including the order of assembly and any special instructions or processes that are required.

BOMs help manufacturers plan and manage inventory, purchase materials, and schedule production activities. They also serve as a reference for quality control, allowing manufacturers to verify that all components are present and accounted for before assembly and to ensure that finished products meet their design specifications.

BOMs can be used for many products, from simple assemblies to complex products with thousands of components. They are an essential tool for manufacturers and are used in various industries, including automotive, electronics, aerospace, and consumer goods.

Category hierarchy, sometimes Category Mapping, Category Tree or Category Taxonomy, in procurement refers to the hierarchical structure used to organize and manage procurement categories based on their level of importance, complexity, and spend. A category hierarchy typically consists of multiple levels, with each level representing a different level of detail or granularity.

At the top of the hierarchy are high-level categories, such as "raw materials," "finished goods," or "services." These categories are then further divided into subcategories based on more specific characteristics, such as "steel" or "plastics" under "raw materials," or "marketing services" or "IT services" under "services."

Each level of the category hierarchy represents a different level of granularity and detail, with higher-level categories being broader and more general and lower-level categories being more specific and detailed. A well-designed category hierarchy can help procurement professionals to understand their procurement spend better, identify opportunities for cost savings and process improvements, and develop more effective sourcing strategies.

Category management is a strategic procurement approach organizations use to effectively manage their spending across various categories of goods and services. It involves analyzing and segmenting the organization's spending into categories and then developing and implementing procurement strategies for each category.

Category management aims to optimize the procurement process by identifying opportunities for cost savings, improving supplier relationships, and enhancing the quality of goods and services acquired. This approach enables organizations to focus on each category's unique characteristics, such as supply market complexity, supplier base, and demand patterns, to drive better outcomes.

Category management typically involves a cross-functional team of procurement professionals, business stakeholders, and subject matter experts who collaborate to develop and execute the category strategy. This approach allows organizations to align their procurement objectives with broader business goals.

Category hierarchy, sometimes Category Mapping, Category Tree or Category Taxonomy, in procurement refers to the hierarchical structure used to organize and manage procurement categories based on their level of importance, complexity, and spend. A category hierarchy typically consists of multiple levels, with each level representing a different level of detail or granularity.

At the top of the hierarchy are high-level categories, such as "raw materials," "finished goods," or "services." These categories are then further divided into subcategories based on more specific characteristics, such as "steel" or "plastics" under "raw materials," or "marketing services" or "IT services" under "services."

Each level of the category hierarchy represents a different level of granularity and detail, with higher-level categories being broader and more general and lower-level categories being more specific and detailed. A well-designed category hierarchy can help procurement professionals to understand their procurement spend better, identify opportunities for cost savings and process improvements, and develop more effective sourcing strategies.

Category strategy in procurement refers to a structured approach for managing a specific category of goods or services that a company purchases from suppliers. The objective of category strategy is to optimize the value of procurement in terms of cost, quality, and risk management.

A category strategy typically involves a thorough analysis of the category, including factors such as market dynamics, supplier performance, industry trends, and regulatory requirements. The procurement team then develops a strategy that aligns with the company's overall business objectives and goals.

The strategy may include actions such as supplier consolidation, negotiation of better contracts, investment in new technologies or processes, or the development of alternative sources of supply. The procurement team will also define key performance indicators (KPIs) to measure the success of the strategy and ensure ongoing performance improvement.

Effective category strategy requires a deep understanding of the category and its specific characteristics and the ability to analyze and interpret complex data sets. It also requires collaboration with internal stakeholders and suppliers to identify opportunities for improvement and drive change.