State of Flux 2025: Customer Satisfaction Drives Procurement

Procurement’s role in shaping customer experience has expanded considerably with suppliers now delivering more than half of the end-customer journey.

According to the 2025 Global Supplier Relationship Management (SRM) Research from State of Flux, this change requires a strategic refocus from transactional cost-cutting towards fostering long-term value and resilience.

The report gathered insights from 484 procurement and supply chain professionals across 335 companies.

The findings highlight a considerable gap between ambition and current practice. While the influence of suppliers on business outcomes is growing, only 6% of organisations demonstrate mature SRM capabilities. This disparity can create risk, inefficiency and missed opportunities for value creation.

Alan Day, Chairman and Founder of State of Flux, explains, “Suppliers are now an extension of the customer experience.

"The organisations that recognise this are building supplier relationships that deliver trust, innovation and measurable business advantage.”

Aligning supplier performance with customer satisfaction

The focus of SRM is moving beyond cost and risk mitigation to become a direct influence on customer experience. For procurement leaders, this means treating suppliers as strategic partners who can act as brand ambassadors.

The report uses case studies from companies like Vodafone and Air Canada to show how embedding SRM across business functions can lead to co-creating value. Air Canada, for example, leverages joint planning and performance governance with its suppliers to enhance service quality and speed.

Vodafone is implementing a structured, three-phase approach that involves developing SRM tools, piloting new working methods and then extending them to strategic suppliers. Vodafone’s objective is to “ensure value negotiated prior to contract execution is maintained throughout the life of the contract… and allow extra value to be unlocked through closer collaboration with suppliers.”

Managing brand reputation

The connection between supplier management and brand integrity is becoming clearer.

George Booth, Chief Procurement Officer at Lloyds Banking Group explains: "Our brand reputation is often in the hands of our suppliers.”

With a procurement team of over 300 managing more than 3,000 suppliers, George links robust supplier assurance and sustainability directly to brand protection.

"We remain absolutely committed to managing our demand for supplier goods and services effectively,” he says, “and working with our suppliers collaboratively on our common journey to net zero.”

His perspective emphasises that where a significant portion of the workforce may be supplier personnel, any lapse in safety or performance can directly impact the customer journey.

As State of Flux notes: “Suppliers often represent your business at the moment it matters most.”

Developing a resilient procurement strategy

The State of Flux report suggests three key priorities for procurement leaders.

First is the need to strengthen the foundations of SRM by building robust capabilities, frameworks and governance structures.

Second, procurement teams should reframe how they measure success, focusing on what suppliers deliver for customers, not just for internal procurement metrics.

The final priority is to actively pursue supplier-led innovation as a route to closing gaps in both customer experience and operational resilience.

This strategic change positions the procurement function at the centre of enterprise value. It is no longer a department solely for negotiating contracts or achieving savings.

Instead, it is a critical function that shapes customer outcomes, manages brand risk and ensures business continuity. The research is consistent: treating suppliers as strategic partners is essential for building resilience, fostering innovation and protecting brand reputation.