Procurement has an established role in securing products and services at the best possible cost. But achieving that consistently depends on more than negotiation. It relies on suppliers delivering reliably, communicating clearly and working collaboratively when challenges arise.
In many organisations, procurement professionals manage more external relationships than the sales team. That means procurement often becomes the face of the business to suppliers. When relationships are managed well, the organisation benefits from stronger performance, fewer issues and better long-term value. When they are managed poorly, service, cost, delivery and reputation can all suffer.
Why supplier relationships need different levels of attention
Not every supplier relationship should be managed in the same way. Some suppliers are low-risk and routine, while others are critical to business operations. The key is understanding which relationships need deeper engagement and which can be managed efficiently with lighter touch processes.
To do this well, procurement teams need to understand the importance of the product or service being purchased and the impact it has on the organisation. This helps allocate the right amount of time, resource and attention to the relationship.
Using the Kraljic model to prioritise suppliers
Figure 1: Model adapted from Kraljic, 1983
The Kraljic model is a useful way to assess products and services based on risk and value. It helps procurement teams identify which suppliers require closer management and which are less critical.
For example, a supplier providing a core product or service will usually require far more attention than a supplier providing routine items. The same applies when looking at the relationship spectrum. A strategic alliance-style relationship requires more focus and collaboration than an arm’s length relationship.
Figure 2: The Relationship Spectrum
Focus SRM effort on strategic and bottleneck suppliers
Strategic and bottleneck suppliers should take up the majority of SRM time. These suppliers are often integral to business performance, and disruptions can create serious operational and commercial risk.
Strong relationships with key suppliers do not happen automatically. Issues will still occur, as they do in any supply relationship. What matters is how both sides respond. The strongest partnerships are built through joint problem solving, open communication and a focus on outcomes rather than blame.
What strong supplier relationships look like in practice
Suppliers that are critical to the business should go through robust due diligence before onboarding. That process should give insight into how the supplier operates, their culture, and how decisions are made within their organisation. Understanding these factors makes it easier to develop a relationship that works long term.
Once onboarded, suppliers benefit from clear communication, accurate forecasting, and being paid on time. They also want to work with organisations that behave ethically and take sustainability seriously.
In return, suppliers are more likely to communicate proactively, share risks early, and go the extra mile when needed. Over time, this builds trust and openness. When trust exists, changes such as amending a purchase order or adjusting a specification are often easier to manage because both sides understand the partnership and expectations.
At its best, supplier management becomes a two-way relationship built on reciprocity and shared success.
Figure 3: Buyer and supplier power matrix
Avoiding complacency
Even when a supplier relationship is working well, it is important not to become complacent. Communication still needs to stay consistent, forecasting should remain accurate, and expectations should be reviewed regularly.
Managing supplier relationships is ongoing work. When it is done efficiently and consistently, procurement teams build stronger supplier performance and long-term resilience across the business.
If you’d like to build your procurement knowledge further, our CIPS Diploma in Procurement and Supply is a structured route to developing the skills, confidence and credibility to progress in the profession.