Mastering Supplier Management in the Digital Age

In what is an undoubtedly global and fast-moving supply chain environment, effective supplier management is more critical than ever. Organisations must ensure supplier performance, compliance and resilience while also meeting rising expectations around sustainability and ethical sourcing. 

However, managing a complex network of suppliers brings its own set of challenges—from maintaining visibility and mitigating risk to ensuring continuity during disruption. 

As procurement continues to evolve into a strategic function, supplier management has become central to value creation, innovation and long-term success.

Enterprise-wide digital transformation

The topic of supplier management was front and centre during the recent Digital Procurement Strategies Panel at Procurement & Supply Chain LIVE Chicago, hosted by Procurement Magazine and sister title Supply Chain Digital.

Maintaining a focus on tech’s influence on procurement, the panellists unanimously agreed that successful digital procurement strategies must transcend departmental boundaries to become enterprise-wide initiatives. 

Eric Larson, SVP Global Sales at risk management specialist Avetta, emphasised that effective digital procurement requires organisational alignment beyond the procurement function itself.

“What we see as being effective – as you contemplate and deploy digital technologies – is having the alignment of the organisation,” explains Eric. 

“It's not just a procurement initiative; it’s hopefully an organisational and enterprise initiative that has the support and the buy-in of the risk, finance and operations teams."

Javier Carnevali, Chief Procurement Officer at Grupo Herdez, reinforced this perspective, explaining that digital procurement initiatives are fundamentally company-wide projects requiring stakeholder involvement and clear goal definition. 

“It all starts with a strategy,” he says. “These are not specific projects for procurement. It’s important to involve all stakeholders and define the goals we want to achieve.”

The enterprise approach also addresses the complexity of managing diverse supplier ecosystems. 

Mark Schenecker, VP, Direct Materials at Coupa, was able to draw from his experience managing thousands of suppliers across 32 global factories. He noted that, while top-tier suppliers operate like well-oiled machines, the challenge lies in maintaining consistency across smaller suppliers who may only engage periodically – but whose failure could halt production entirely.

Scaling supplier engagement through automation

Digital tools have dramatically expanded procurement teams' capacity to engage with suppliers, particularly in the qualification and onboarding phases.

Jack Spallone, SVP, Sourcing & Procurement at International Vitamin Corporation, described how automation has transformed his team's approach to supplier management, enabling them to process significantly more suppliers than traditional methods would allow. 

"What I can do now is unlock a massive amount of suppliers early on and go through a qualification stage using an AI tool,” he adds. “I can prescribe the questions, the documents required, the minimum requirements and it's going to keep on asking them those questions until they either fail or they answer all of them.

“Once they answer all of them, that's when they're going to get a call from the category manager and start doing supplier developments and potential new supplier engagement.”

This approach has yielded impressive results for his organisation: "We've been able to go from maybe 80 suppliers a year in terms of RFP (request for proposal) to 920 last year.”

Pursuing this automation strategy eliminates mundane administrative tasks while preserving human involvement for value-added activities. 

Once suppliers complete the automated qualification process, category managers can engage in more meaningful discussions about capabilities, volumes and partnership opportunities.

Human-centred tech implementation

Despite the obvious benefits of automation, the panellists stressed that successful digital procurement must remain fundamentally people-first. 

Jack articulated this principle most clearly: "The biggest thing I’ve learned in my 20-plus years in procurement is that your solution has to be human-centred. You can't just throw a robot at your suppliers."

Further emphasising the value of relationships, he says: “The most important thing we do for a living is building relationships, maintaining relationships and extracting and giving value to your supplier ecosystem. If you try to digitalise all of it, end to end, you're losing so much more value than you're gaining."

The human element becomes particularly crucial when dealing with diverse supplier capabilities. 

Mark highlighted the importance of adapting technology interfaces to match supplier capabilities – rather than imposing uniform standards. 

"I worked with a dirt floor manufacturing plant in 2001 in Indonesia,” he reflects. “They had a PC in the corner and that was how they communicated with one of the world's largest hardware OEMs. 

“The idea is to make the technology fit what the supplier is capable of doing, not the other way around. Make it something that becomes a more natural interface."

Decision-making frameworks for automation

The panel discussed practical frameworks for determining when to automate processes versus maintaining human involvement.

Jack proposed a simple but effective principle: "My rule of thumb is ‘nuance = no automation’. On one end of the spectrum, you have negotiation – the opposite of something a machine can do. On the other end of the spectrum, you have document collection, which I love for automation.”

The challenge, Jack explained, lies in the grey areas between these extremes, where specifications may appear identical but operational knowledge reveals critical differences that only experienced practitioners understand.

Javier offered a more structured approach in the form of decision mapping.

“By mapping our decision-making process, we can define whether certain decisions will be taken by a human or could be automated,” he revealed. “We map all the decisions we make in different processes across sourcing and procurement.”

Grupo Herdez’s procurement chief continued with a powerful statement: “Technology will help us to deal with transactions, but you need a human to deal with the relation. In my opinion, we will never delegate that human connection to technology.”

Implementation challenges

The panellists identified change management as the most significant barrier to successful digital procurement implementation. 

Mark noted that this element is consistently underestimated during the project planning stage: “A project might make sense to us [in procurement] and we understand the vision, but getting that out to everyone else – for whom procurement is not their job – is really hard.

Data quality emerged as another critical challenge, with Javier highlighting how organisations often discover incomplete master data management during implementation. 

“When you start a project and carry out these kinds of implementations, you often realise some preparation work was not done,” he notes. “One, for example, could be working on the master data management of the databases of users, suppliers, customers, which need to be fed into these digital platforms.

"Something I always recommend – if you have an implementation partner – is asking what kind of data they will need to start the project.”

Jack advocated for a measured implementation approach, advising “start small”.

He continued: “There are a lot of really cool end-to-end solutions and I do aspire to eventually have one tool that does everything for me, but I’ve learned many times to start small with one solution – at least at the beginning.”

Eric concluded by echoing this sentiment: “It can be tempting to go for everything at once, but you need the discipline to start small and deliver that quick win that builds excitement and buy-in. Then, you have a foundation to take the next step in your evolution.”