Supplier Collaboration: the key ingredient for procurement success

Supplier Collaboration: the key ingredient for procurement success

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Procurement’s portfolio has expanded rapidly in recent years. 

The demands placed on procurement have expanded into sustainability, resilience and innovation. 

An observation on Kraljic’s ‘Supplier Cooperation’ 

Vizibl reflects on Peter Kraljic’s 1983 purchasing portfolio matrix, which suggests ‘cooperation with suppliers’ can strengthen business relationships over time and enable both parties to ‘capitalise on shared resources’. 

‘Meaningful relationships are mission critical’ 
Welcome to Supply Management in 2022: Supplier Collaboration 

The pandemic’s impact highlighted the need for collaboration, where Kraljic’s observations on segmentation are supported. Collaboration between companies and suppliers provides access to: 

  • Improved cost and quality management  
  • Early access to existing IP and future innovation  
  • Sustained supply in times of shortage  
  • Engagement and co-operation with supply chain sustainability initiatives 
‘Supplier-sourced innovation is typically commercialised 40% faster than home grown ideas. With suppliers, this increased speed to market is frequently achieved at lower cost.’ 

Supplier collaboration is crucial for procurement, more now than ever. Companies can leverage key supplier relationships for long-term gain, where they need to foster more collaborative working relationships to extract true value – for both parties. 

As technological change accelerates, so do company initiatives to reduce the often harmful impacts of activities within their supply chain.  

Typically upwards of 80% of carbon emissions originate in the supply chain of the average large company.’ 

Perfecting and ensuring procurement success is an ongoing journey, where companies are faced with changing requirements to do more for their stakeholders and the planet. The key ingredient of supplier collaboration will always be key, as digitalisation connects companies with more diverse suppliers, to leverage relationships to reach their own goals and continue building on its capabilities.  

Collaboration with suppliers is no longer a ‘nice to have’ – it’s an organisational imperative. 

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