Modern supply chain management: Navigating procurement uncertainty

Ongoing shocks, geopolitical tension, trade policy changes, and extreme weather have made the past few years tumultuous for global supply chains. And though conditions have improved since 2021, progress has again plateaued. 

The 2024 survey by the Federal Reserve Bank of New York found that roughly one‑third of service firms and almost half of manufacturers are still experiencing difficulty obtaining supplies. These numbers underline a simple truth: Volatility is still the norm.

In response, procurement continues to evolve from a tactical purchasing function to a strategic architect of supply chain resilience. Leaders must continue to balance cost control with reliable sourcing, supplier diversification, sustainability, and emerging risks. Achieving this is easier with tools that can help your procurement team strengthen supply chain agility and streamline operations while complementing existing ERP, warehouse, and transportation management systems. 

What is supply chain management?

Supply chain management (SCM) is the centralized coordination of goods and services from raw material sourcing through production, delivery, and returns. Aligning these phases helps organizations reduce costs, improve efficiency, and meet customer expectations.

Modern supply chains often span continents and involve numerous suppliers, logistics providers, and intermediaries. Effective management keeps materials flowing smoothly—even when unexpected events occur. 

SCM also encompasses supplier relationship management, demand forecasting, inventory control and optimization, sustainability, and procurement compliance. Procurement teams play a pivotal role by working with suppliers to negotiate contracts, ensure ethical sourcing, and align purchasing with broader supply chain goals.

Key performance indicators in supply chain management

Measuring performance helps procurement leaders pinpoint inefficiencies and ensure sourcing decisions support overall SCM objectives. Common KPIs include:

• Inventory turnover: This metric articulates how often inventory is sold and replaced within a period. Higher turnover suggests efficient inventory management, whereas low turnover may indicate overstocking or slow‑moving items.

• Order cycle time: This is the average time between placing and receiving an order. Shorter cycle times improve customer satisfaction and working capital efficiency.

• Order accuracy:  Accuracy is the percentage of orders delivered without errors. High accuracy reduces returns and backorders.

• Supplier lead times: Lead times refer to the amount of time between placing an order with a supplier and receiving it. Monitoring lead times helps identify bottlenecks and informs contingency planning.

• Stockout rate: This is the frequency at which inventory shortages occur. Managing this metric prevents lost sales and production stoppages.

• Sustainability metrics: These indicators include metrics like carbon footprint, recycled content, and diversity spend. They help track progress toward responsible purchasing and are increasingly part of procurement KPIs.

Monitoring these metrics provides end-to-end visibility and helps procurement leaders make data‑driven decisions—such as adjusting safety stock levels, diversifying suppliers, or renegotiating contract terms—to improve supply chain performance.

Why supply chains matter more now than ever

The business landscape may seem increasingly uncertain, but new opportunities are emerging. To reduce risk, many organizations are rethinking how they source and manage suppliers. McKinsey's Global Supply Chain Leader Survey found that almost three-quarters of organizations have adopted dual-sourcing strategies and are now securing supply from multiple vendors to avoid disruptions. 

To ensure ongoing resilience, leaders must balance cost efficiency, supplier risk, and operational agility. That means prioritizing responsible sourcing, adopting flexible technologies, and leveraging data to anticipate change. With the right tools and insights, you can build stronger supplier relationships and transform volatility into a competitive advantage.

Supply chain challenges facing procurement leaders (and effective solutions)

While procurement leaders face numerous challenges, they're not insurmountable. Here are some of the most pressing modern supply chain issues and strategies to address them.

Disruption and supplier volatility

Despite some improvements in the past few years, supply disruptions remain widespread. In 2024, Resilinc recorded a 38% year-over-year increase in global supply chain disruptions, driven by events like factory fires, protests, and extreme weather. Yet many organizations still rely on single or offshore suppliers, leaving them vulnerable when disaster strikes. Diversifying your supplier base and building redundancy are now more important than ever.

Solution: Consider a multi‑supplier and multi‑shoring strategy. Solutions like Amazon Business give you access to millions of pre‑vetted sellers—including small, local, and certified sustainable suppliers—making it easier to source alternative materials quickly. Negotiating framework agreements with multiple vendors, maintaining safety stock of critical items, and developing emergency sourcing playbooks can also help you stay ahead of supply chain risks.

Siloed systems and poor visibility

Many organizations manage procurement, finance, logistics, and inventory using disconnected systems. This fragmentation does not support real-time visibility and can complicate decision‑making. Without unified data, procurement leaders may struggle to forecast demand, identify bottlenecks, and measure supplier performance.

Solution: Consolidate procurement workflows onto integrated platforms and invest in data quality. Identify solutions that integrate with ERP systems to bring spend data, approvals, and analytics into one place, helping you unify purchases across locations. For example, Amazon Business Analytics gives you access to dashboards that show spend by category, supplier, and compliance status to help you enforce policies and make strategic decisions. You can also improve visibility by connecting your procurement software with inventory and finance systems and investing in master data governance.

Compliance, SRP, and supplier risk

Regulators and stakeholders are pushing companies to document sustainable and ethical practices. Many procurement teams, however, lack the tools to vet vendors or trace purchases across tiers.

Solution: Collaborate with your legal and sustainability teams to develop supplier risk and compliance programs that establish codes of conduct, assess risks, and monitor certifications. Amazon Business can help you guide buyers to certified local businesses, diverse sellers, or products with sustainability certifications while tracking your spend and reporting on organizational progress towards internal goals or regulatory mandates. However, it's important to conduct your own due diligence, as technology and tools can complement but cannot replace your efforts.

Four best practices for supply chain excellence

1. Data-driven, policy-aligned purchasing

Unified spend visibility and robust approval workflows can be essential for aligning purchasing decisions with corporate strategy. According to PwC, more than half of operations management and supply chain leaders are using AI to anticipate disruption, with 59% citing it as effective for creating value. 

With AI-driven analytics, procurement teams can harness data to make informed decisions, monitor supplier performance, forecast demand, and flag irregularities. Allowing staff to quickly identify products they need that meet your organization’s criteria, using AI/ML through systems, such as Amazon Business, can help reduce maverick spending. 

When leaders analyze KPIs such as order cycle time or inventory turnover, they can fine-tune approval thresholds, negotiate better terms, and allocate budgets more effectively. This helps ensure purchasing decisions directly support broader organizational goals.

2. Agile vendor networks and sourcing resilience

Resilient supply chains rely on diversified vendor networks. McKinsey’s Global Supply Chain Leader Survey shows that 73% of companies have implemented dual‑sourcing strategies, while an IDC prediction suggests that balanced multi‑shoring can improve supply reliability by 15% points in some regions.

Maintaining a mix of local, regional, and global suppliers helps procurement leaders mitigate geopolitical or logistical disruptions. Amazon Business can help by providing access to trusted suppliers, including those with diversity certifications. Businesses should also evaluate supplier financial health and capacity, set up backup suppliers for critical materials, and regularly review supplier performance through scorecards.

3. Flexible purchasing controls for decentralized teams

Hybrid work models and multi‑location operations mean that buying happens across departments and geographies. KPMG anticipates a rise in new intake and orchestration (I&O) technologies by the end of 2025, which layer above existing applications to coordinate workflows across multiple solutions.

To keep pace, supply chain professionals can adopt tools that standardize requests, automate approvals, and provide consistent visibility regardless of location. Amazon Business supports decentralized purchasing with configurable approval workflows, role‑based access controls, and budget thresholds. By empowering employees to self‑serve within defined parameters, organizations can speed procurement while maintaining purchasing compliance.

4. Reliable, customizable delivery

Modern supply chains demand reliable delivery schedules to keep production lines running and prevent stockouts. To minimize disruption, procurement leaders often coordinate recurring orders or schedule shipments to align with manufacturing cycles. 

Amazon Business offers Recurring Delivery and multiple delivery options that allow organizations to set regular reorder intervals or select specific delivery windows. These features can reduce manual reordering, optimize inventory levels, and support just‑in‑time production. When used alongside spend analytics, they can also help procurement teams forecast demand and negotiate better terms with suppliers.

Procurement as a driver of resilient supply chains

Modern supply chain management is about more than moving goods from point A to point B. It's about empowering procurement teams to lead, adapt to risk, drive efficiency, and meet SRP goals. With data-backed decisions and supplier diversification at the forefront, procurement now plays a central role in building supply chain networks that can bend without breaking.

Looking to strengthen your supply chain with smarter procurement? Discover how Amazon Business can help your organization improve resilience, simplify purchasing, and gain full control over spend. Contact the Amazon Business team today.

Frequently asked questions (FAQ)

How does procurement influence the efficiency of supply chain operations?

Procurement decisions can directly impact lead times, inventory levels, order fulfillment speed, and the overall flow of goods through the supply chain. 

By negotiating favorable terms, selecting reliable suppliers, and ensuring policy compliance, procurement can reduce order cycle times, minimize stockouts, and improve on‑time delivery. 

Adopting data‑driven tools and KPIs, such as inventory turnover and order accuracy, helps teams identify inefficiencies and respond quickly to disruptions. These efforts often work in tandem with warehouse management systems to keep operations running smoothly.

What are the key components of an effective supply chain strategy?

An effective strategy encompasses supply chain planning, sourcing, manufacturing, delivery, and returns. 

Here are a few components to keep top of mind:

• Supplier relationship management and diversifying suppliers

• Continuous risk assessment

• Adoption of new technologies, like AI and robust analytics

• Mapping supply chains to ensure SRP compliance

• Integrating procurement and logistics management systems

• Aligning with customer needs and customer demand planning

• Minimizing supply chain waste

Solutions like Amazon Business can help support end-to-end sourcing and spend management, while organizations can simultaneously invest in talent development and robust risk‑management processes.

How can procurement teams manage supply chain risks effectively?

Effective risk management combines proactive planning with real-time visibility. 

Key steps include:

• Diversify supply sources: Adopt dual‑sourcing and multi‑shoring strategies to reduce dependence on a single supplier or region.

• Invest in digital tools: Leverage spend analytics, AI, and digital twins to monitor supplier performance and predict disruptions. Remember that successful technology adoption requires integration and high-quality data.

• Strengthen supplier relationships: Collaborate with suppliers to understand their capabilities, support innovation, and negotiate contingency plans. Consider local and certified diverse suppliers via buying solutions like Amazon Business.

• Monitor compliance: Develop supplier codes of conduct, audit partnerships, and track SRP and diversity metrics. Layer in tools like Amazon Business’ buying policies to steer buyers to sellers with desired attributes while performing your own due diligence.

• Establish agile processes: Create clear escalation paths and decision frameworks so teams can react quickly when disruptions occur.

These initiatives not only reduce disruption but also support profitability and long-term resilience across operations.