Want better procurement outcomes? Start with better relationships

In today’s rapidly shifting global landscape, the success of a procurement organization hinges on much more than just securing the best price or managing contracts efficiently. At the heart of long-term procurement excellence lies something often underestimated: strong, strategic relationships—especially with suppliers.

Procurement professionals are increasingly recognizing that robust supplier relationships are not just a nice to have but a vital element of risk mitigation, innovation, compliance, and cost control. It is much more than just a transactional relationship and instead a relationship built on trust, communication and collaboration. One of the keys to building these relationships is the digitization of functions.

“A recent report by DPW reveals that digitization has particularly accelerated in supplier relationship management, with more and more businesses introducing solutions to streamline supplier communications,” explains Alexandra Lafaurie, vp of product management at JAGGAER. “This trend is partially fueled by geopolitical uncertainty caused by a number of factors that range from the impact of the Covid-19 pandemic to supply chain bottlenecks in the Red Sea and, most recently, the impact of tariffs both effective and threatened.”

In other words, external pressures are making supplier relationship management (SRM) a strategic priority. Organizations that previously viewed supplier interactions as transactional are now adopting a more collaborative approach—one that leverages communication and trust to drive resilience and growth.

Relationships as a risk mitigation strategy

Supply chain disruptions are no longer rare, one-off events. From global health crises to regional instability and shifting trade policies, uncertainty has become the norm. In this context, Lafaurie points out that strong supplier relationships are not just about avoiding bottlenecks.

“Businesses have clearly grasped the importance of supply chain relationships to prevent risk, but the benefits can actually span so much further than simply avoiding bottlenecks or production halts,” she says.

One of those key benefits is compliance. With increasing regulatory requirements—covering everything from emissions to labor standards to material sourcing—organizations need real-time visibility into their suppliers’ operations. This is where technology and trust intersect.

“Having open and clear communication lines with suppliers is key to ensuring continued compliance,” Lafaurie notes. “Systems that enable the automatic updating of certifications or that streamline the collection of new compliance data such as confirmation of origin for raw materials, and improve visibility over production processes play a critical role.”

Visibility into compliance is important as global regulations are requiring businesses to accurately measure Scope 3 emissions and comply with anti-modern slavery standards, the Uyghur Forced Labor Prevention Act, or EU regulations such as CSRD, CSDD and the EU Regulation on Deforestation-free products.

From compliance to collaboration

While risk prevention and compliance are essential, the real power of supplier relationships lies in their potential to unlock new value. Lafaurie says that consistent and collaborative communication can drive cost savings, innovation and even improve sustainability.

“Transparency and collaboration with suppliers can unlock added value and lower costs,” she says. “Specifically, regularly interfacing with suppliers can help identify sources closer to home, reducing the cost of shipping and emissions or after sales services.”

This collaboration also can lead to new friendshoring opportunities that “will limit the crunch of tariffs on margins,” Lafaurie notes.

When suppliers are treated as partners rather than vendors, they become contributors to strategy. They might suggest more sustainable packaging materials, more efficient production processes, or regional suppliers that cut emissions and lead times. These improvements can ripple through the supply chain, boosting not just the bottom line but also brand reputation and customer satisfaction.

“Even if the option discussed is not necessarily cheaper,” Lafaurie adds, “the improvement to the product may be so significant that with a small increment it is possible to hugely improve quality or service.”

The future of procurement is relational

As procurement organizations invest in digital tools to improve SRM, the goal isn’t to replace human interaction—but to enhance it. Technology can automate data collection, certification tracking, and performance monitoring, but it’s the human relationships that drive collaboration, creativity, and long-term success.

“Relationships upstream and downstream in the supply chain are rich in intelligence and opportunity, but businesses need to grasp them without overburdening staff with new duties,” Lafaurie says. “Those that are able to leverage this data will not only weather the headwinds of a changing geopolitical environment but will be able to access innovation and cost-efficiencies that were previously unthinkable.”

The message is clear: building and nurturing supplier relationships is no longer a soft skill—it’s a competitive advantage. Procurement teams that prioritize open communication, transparency, and mutual value creation are better positioned to navigate disruption, meet compliance demands, and uncover opportunities for innovation and growth.

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