Procurement now plays a central role in shaping customer experience, business continuity, innovation, and even brand reputation. At the heart of this shift is one defining factor: the strength and maturity of supplier relationships.
In a recent Procurement Magazine article, author Louise Collins highlights the paradigm shift surrounding customer success and procurement. Specifically, she speaks to the fact that suppliers now deliver more than half of the end customer journey. That level of influence means that the performance, reliability, and alignment of suppliers have a direct impact on customer satisfaction. As a result, strong supplier relationships are becoming the most important indicator of future procurement success.
The shift in supplier influence represents one of the most significant changes in modern procurement. The State of Flux 2025 Global SRM Research Report highlights that while supplier impact on business outcomes continues to grow, only 6% of organizations demonstrate mature SRM capabilities. There certainly is a general understanding of the importance of supplier relationships, but most businesses have not yet developed the structures and practices needed to manage them strategically.
Alan Day, Chairman and Founder of State of Flux, summarized the shift clearly in the Procurement Magazine article: “Suppliers are now an extension of the customer experience”. This means suppliers are no longer just external vendors supporting operations. They are, in many cases, an invisible but critical part of the customer-facing value chain.
Their performance touches quality, speed, sustainability, safety, and overall trust. Organizations that recognize this reality are building deeper, more transparent supplier relationships that lead to greater innovation and measurable business advantages.
The tension between cost savings and innovation has long created challenges for manufacturing and procurement teams. During our recent webinar,, panelist Michael Lucas, Lead Engineer at Manufacturing Catalyst, explained why this tension negatively affects efficiency.
“Tactical cost cutting tends to make things more expensive in the longer term,” he said. “Innovation and agility lead to cost savings, not the other way around.”
This perspective aligns closely with the findings in the State of Flux report, which recommends a strategic refocus from transactional cost reduction toward long term value creation and resilience. Procurement is uniquely positioned to influence this shift because supplier relationships are often the point where cost, quality, capability, and innovation intersect.
When suppliers are treated as true partners rather than interchangeable vendors, organizations can unlock value such as better component design, improved quality, alternative sourcing strategies, and shared investment in innovation. These gains rarely come from short term or adversarial procurement practices. Instead, they grow out of long-term trust and aligned objectives.
Supplier collaboration is one of the clearest paths to achieving innovation and operational agility. The State of Flux report highlights several case studies showing how companies are embedding SRM practices across their entire business to co-create value with suppliers.
Air Canada, for example, applies joint planning and performance governance with its suppliers, helping them improve speed and service quality. Vodafone is building a structured, three phase SRM framework that introduces new working methods and applies them to strategic partners. Their goal is to ensure that the value negotiated at the start of a contract is maintained throughout its lifecycle and to unlock additional value through closer collaboration.
Michael Lucas reinforced this perspective during the Veriscape webinar. “Partnering with your suppliers opens up opportunities you might not otherwise access,” he noted. Collaboration can highlight opportunities for better product design, simpler workflows, and solutions to problems that internal teams may not see on their own.
It is clear that when teams across the supply chain communicate openly, share data, and work toward shared outcomes, organizations can react faster to disruptions, scale new ideas quickly, and maintain quality and speed even under pressure.
Visibility remains one of the most talked about goals in procurement, and for good reason. Without visibility into supplier performance, risk, and delivery milestones, procurement becomes reactive rather than strategic. The State of Flux report identifies strengthening SRM foundations, including consistent frameworks and governance, as a top priority for organizations hoping to modernize their procurement capabilities.
Michael Lucas expanded on this topic during the webinar, noting that visibility improves naturally when suppliers are treated as partners. Once trust and collaboration are established, digital tools become the accelerant that turns information into strategic advantage.
His recommendation: layer digital systems over supplier partnerships to enable real time tracking that can be filtered into meaningful insights. Presenting this data in an easy-to-use format helps procurement teams stay focused on what matters most rather than being overwhelmed by endless streams of raw data.
This viewpoint aligns strongly with Veriscape’s emphasis on visibility. Data only becomes valuable when it is actionable. Tools that clarify, simplify, and connect procurement processes make it easier for teams to collaborate internally and externally with suppliers.
The connection between supplier management and brand integrity continues to grow. George Booth, Chief Procurement Officer at Lloyds Banking Group, explained in the Procurement Magazine article that “our brand reputation is often in the hands of our suppliers”. With thousands of suppliers supporting operations, any lapse in safety, sustainability, or performance could directly impact customer trust and long-term reputation.
This is especially relevant as organizations commit to ambitious sustainability and net zero goals. Suppliers play a critical role in helping businesses meet their environmental and social governance targets. Strong supplier relationships ensure alignment on values, compliance, transparency, and shared responsibility for outcomes.
Looking ahead, capability building across the procurement ecosystem will be essential. When asked about future opportunities for collaboration, Michael Lucas noted that rapid upskilling will be non-negotiable.
“Everyone is going to need to get better, faster,” he said. “If we can get collaboration between solution providers, resellers, and businesses, that will allow us to build capability much more quickly.”
Veriscape CEO Pradeep Sriganesh echoed this sentiment, emphasizing that while cross partner collaboration can start off rocky, it ultimately strengthens the procurement team. With more exposure to tools, partners, and shared problem solving, procurement professionals gain confidence and expertise. Over time, this capability becomes a strategic advantage.
It’s easy to see just how far procurement has moved beyond its legacy role as a cost control function. With suppliers increasingly impacting customer experience, organizations need deeper collaboration, better visibility, stronger governance, and long-term relationship strategies.
Although SRM maturity remains low in most organizations, those that invest in capability building and supplier partnership development will gain a significant competitive edge.
Strong supplier relationships are no longer optional. They are the foundation of modern customer centric procurement. Organizations that invest in them today will be the ones best positioned to drive innovation and sustainable success in the future.