Supplier management: six best practices to improve procurement outcomes

Supplier partnerships play a core role in your procurement operations since you rely on them to get high-quality goods and services without delay and undue expense. However, shifts in supply demand and fast-paced industries mean your organization has to be efficient, agile, and strategic with how you work with suppliers. To keep up with these changes, maintain long-term organizational growth, and ensure procurement maturity, effective supplier management is critical.

Yet managing suppliers involves more than knowing who to work with and when. It also includes maintaining complete visibility into your spend, contract compliance, and network structure, all of which can be difficult to juggle with decentralized or manual workflows. However, a unified purchasing solution can put all these moving parts under one roof. With it, you can boost supplier information management, secure financial and operational control, and set up your organization for long-term growth.

What is supplier management?

Supplier management is your strategy to source, onboard, and coordinate vendors. It can include factors like monitoring non-contract spend, consolidating suppliers, and centralizing tail spend. These are the key components of supplier management:

• Sourcing: Identify and select the best suppliers for your purchasing needs 

• Onboarding: Introduce new suppliers to your network via a standardized process 

• Monitoring: Track vendor performance to ensure they follow contracted expectations 

• Compliance: Use performance metrics to assess supplier risk and reliability

   

Supplier performance impacts the quality of goods and services, cost savings, and on-time deliveries. Because of this, vendors play a core role in your strategy for long-term procurement maturity.

Supplier management vs. procurement

Procurement refers to the overarching process of acquiring goods and services, including everything from strategic sourcing to invoice reconciliation. Supplier management fits into this strategy by coordinating everything related to vendors. In efficient operations, your supplier management, procurement process, and purchasing workflow work together seamlessly to bolster contract management, quality control, and cost reduction. But before you can reap the benefits of an optimized procurement operation, you need a firm hold on supplier management. 

Why effective supplier management matters

Today’s procurement faces challenges that make supplier management and dependency critical. The following areas demonstrate why supplier collaboration may be a priority so you can achieve your business goals and supply chain management:

Mitigate supply chain risk

Geopolitical conflict, extreme weather disruptions, rising trade barriers, and labor shortages all contribute to supply chain unrest that can trickle down to impact your network. These wide-scale risks often impact your vendors first. Any disruptions they encounter can eventually interrupt your operations, unless your organization can foresee and mitigate supply chain shifts.

Yet supply chain risk management can be a huge undertaking that includes monitoring how major global events might impact the Global Supply Chain Pressure Index, planning scenarios to combat future risks, and controlling your supply chain boundaries. Visibility into these areas helps you make informed decisions, such as when to pivot to a different supplier or which goods to stock up on, and Amazon Business can assist with gaining this insight.

Amazon Business has a large network of suppliers to help strengthen your supply chain. For example, if a go-to supplier experiences a sudden disruption, your buyers can pivot quickly to find high-quality products and services at reasonable prices. This agility is a key part of building your organization’s supply chain resilience. 

Streamline digital transformation

Digital workflows fuel organizational growth and smarter business buying. According to a 2025 report from The Organisation of Economic Co-operation and Development, the ability to integrate across procurement systems is a high priority and helps drive the increasing adoption of digital tooling. Not only can digitized processes streamline procurement operations so you can focus on initiatives to encourage enterprise growth, but they also lower your total risk. Unified purchasing solutions, such as Amazon Business, help simplify your efforts to digitize workflows through robust integrations. 

Amazon Business integrates with over 300 procurement systems, supporting you in building a personalized procurement tech stack that unifies purchasing and supplier data. With centralized information, you can identify and reduce non-contract and tail spend, as well as uncover opportunities to consolidate orders or vendors to help you stay on budget. Additionally, your team can leverage these data-driven insights to boost vendor performance management, which is an important component of your organization’s long-term supplier relationship management (SRM) strategy. 

Enforce contract compliance and product quality

External vendor contract compliance ensures every order and delivery abides by purchasing and regulatory policies, and maintains product quality and on-time deliveries. On the other hand, internal contract compliance makes sure buyers only purchase from contracted vendors.

But before you can focus your efforts on building a contracted supplier base that aligns with your responsible purchasing expectations, you need spending insight. This kind of purchasing data helps you lower maverick spend, get an accurate sense of your organizational needs, and find opportunities to consolidate and save. Once you have a solid grasp on your spending, you can leverage solutions like Amazon Business to identify suppliers with certifications that align with your business needs and sustainability values.

Amazon Business highlights certified suppliers. Such transparency helps you review potential vendors and choose the right ones for your responsible purchasing mandates. Vendors with more sustainable procurement habits, who also maintain open communication channels and deliver high-quality goods and services, are crucial for organizational growth, operational efficiency, and a competitive advantage.

6 best practices for strategic supplier management

Supplier management best practices can help you and your team establish a foundation for long-term vendor relationships and procurement maturity. Start by working these six practices into your strategy:

1. Streamline supplier onboarding

Supplier onboarding is often fragmented, which increases the risk of inconsistent vetting, inaccurate information, or contract compliance violations. The best way to remedy these risks is with standardized onboarding. That means every one of your suppliers works through the same process when learning your procurement needs and operations. You can leverage digital workflows to streamline and unify this process.

2. Establish clear KPIs

Poor visibility into supplier performance increases the odds of delays, product quality issues, and overpayments. To boost transparency, use clear key performance indicators (KPIs). Real-time performance insights, like on-time delivery and cost efficiency, provide insight into which suppliers are the best fits for your operations. 

3. Proactively manage risk

Risk management is a core part of collaborating with suppliers. If a vendor is financially insecure or non-compliant with industry standards, for instance, you’ll face a greater risk of network interruptions. To stay proactive, conduct regular risk assessments that involve looking at data points that illuminate compliance, financial stability, and operational reliability.

4. Consolidate fragmented supplier bases

A fragmented network can restrict visibility and create inefficiencies, inflated costs, and compliance complexity. However, vendor consolidation can help relieve these challenges by simplifying supplier management. Past purchasing data can help you uncover consolidation opportunities, such as order redundancies or inefficiencies. By purchasing more goods and services from fewer sources, you may be more likely to have fewer moving parts to coordinate and lower costs. 

5. Leverage automation

Time-consuming manual workflows can slow down procurement, and inefficient processes lead to increased costs and risk of human errors. But automation technology can save your team time and money by handling tedious routine tasks instantly, including purchase approvals, reporting, and invoice reconciliation. By automating these standard tasks, your team will regain time to focus on organizational growth initiatives. 

6. Embed responsible purchasing and diversity goals into supplier selection

Once you’ve centralized tail spend, consolidated suppliers, and lowered non-contract purchases, you can transition to finding suppliers that meet your responsible purchasing and diversity objectives. To do so, select suppliers that are transparent about their sustainable purchasing certifications. That way, you can be confident that your contracted vendors have values that align with yours.

Amazon Business is the procurement solution you need to simplify sourcing more sustainable purchasing vendors. With filters like Climate Pledge Friendly and diversity-certified, it can help you find a supplier that best matches your sustainable purchasing goals and requirements. 

Smart supplier management with Amazon Business

Amazon Business helps organizations find the right suppliers for their needs, aggregate purchasing data, and automate routine parts of the procurement workflow. This solution can also power smarter buying practices through the following functionalities: 

Supplier data centralization

Decentralized supplier data increases the risk of inaccurate information, regulatory violations, and operational delays. It limits visibility into your network and supplier performance. However, you can gain accurate insight by implementing a unified purchasing solution that helps organize vendor data through centralized reporting.

Solutions like Amazon Business organize supplier and purchasing data, so you can uncover how much money you spend with each supplier. That way, you’ll know if you’re hitting your diversity and responsible purchasing requirements or if there’s room to adjust your purchasing practices. 

Spend optimization through analytics

Your team can enhance its purchasing efficiency with Amazon Business Analytics. With a customized analytics dashboard, you can diligently track your budget, forecast demand, and lower rogue spend.

By consolidating this information, you can see both a high-level overview of your supplier network and drill down into the details, like areas of non-contract or tail spend. And with features like Spend Analysis, you can see how much money you spend with each vendor. This insight helps you find ways to consolidate vendors and orders.

Automated approval workflows

With over 300 integrations, Amazon Business can streamline your approval workflow through automation. Features like Guided Buying (a Business Prime feature) allow you to create purchasing policies that align with your organization’s buying policies and objectives.

This solution also marks vendors as “Preferred by your organization” so buyers know which suppliers to prioritize. Additionally, Amazon Business’ Approvals feature helps teams streamline workflows by automatically sending purchases to specific stakeholders based on order parameters. 

From supplier management to supplier relationship management

Supplier relationship management involves building strong long-term relationships with your vendors. It’s often the next step once you have a reliable supplier management strategy. Consider the following factors when determining if your team is ready to focus on SRM and how to get started.

Tactical vs. strategic supplier focus

Supplier management focuses on how you work with vendors in the short term, including contract coordination, cost control, inventory management, and performance tracking. On the other hand, supplier relationship management looks at building long-term connections with vendors and prioritizes building strong, collaborative partnerships. 

Maturity markers for procurement readiness

You need a strong operational foundation before you can focus on supplier relationships. That means having reliable supplier management practices. If you face poor communication, product quality, delays, or lack of transparency, it could be time to focus on using supplier management as your pathway to building lasting relationships with your vendors. 

Next steps for procurement decision makers

With a firm handle on supplier management, your team can prioritize long-term vendor partnerships. To accomplish this, you’ll start by building a base of suppliers that meet your responsible purchasing standards and practice clear communication. These two characteristics support strong partnerships with suppliers, which helps lower your overall risk. It means you and your suppliers can rely on each other and collaborate to sidestep supply chain disruptions, maintain transparent business practices, and build trust. 

Lay the foundation for supplier excellence

Strong, reliable supplier relationships are key to supply chain resiliency and long-term organizational growth. However, you can’t build these partnerships without effective supplier management.

Amazon Business is a trusted solution to help you regain visibility into spend and control that you can use to help with supplier management. The solution can accomplish this through an in-depth business spend analysis that uncovers spending inefficiencies, allowing you to leverage data to manage tail and maverick spend, consolidate vendors, and enhance visibility into vendor performance.

Once you have insight into these areas, Amazon Business’ supplier storefronts can help you find diverse, local, or certified sustainable vendors that best suit your organization’s needs right now and as your organization grows. 

With the help of Amazon Business, you can gain visibility, promote compliance, and prepare for the next stage in procurement maturity. Contact Amazon Business today to learn how the solution can help strengthen your supplier management strategy.