5 Common Procurement Challenges and How to Solve Them

Procurement teams don’t fail because they lack process documentation or sophisticated software. They fail because they don’t have people who can navigate supplier relationships, spot risks before they become crises, and make judgement calls when the rulebook doesn’t have answers.

The best procurement strategy in the world means nothing if it’s executed by people who don’t understand why it exists. You can implement category management frameworks and strategic sourcing methodologies, but without professionals who genuinely grasp the commercial implications of their decisions, you’re just creating elaborate paperwork.

Challenge 1: Supplier Relationship Breakdown

Supplier relationships deteriorate when procurement teams treat vendors as interchangeable commodities rather than business partners. This transactional approach creates adversarial dynamics that hurt both parties – suppliers become uncooperative, quality suffers, and innovation disappears.

The problem isn’t the relationship structure itself. It’s having procurement professionals who lack the interpersonal skills or commercial awareness to manage complex partnerships effectively. Someone who’s brilliant at contract terms but terrible at reading situations will damage supplier relationships no matter how good your processes are.

Strong procurement people understand that supplier management is fundamentally about people management. They recognise when to be firm and when to be flexible. They build trust through consistent behaviour rather than formal agreements. These skills can’t be taught in a two-day training course – they’re developed through experience and natural aptitude.

When supplier relationships consistently break down, your first question shouldn’t be “what’s wrong with our process?” It should be “do we have people with the skills to manage these relationships successfully?”

Challenge 2: Cost Control Without Value Destruction

Procurement teams face constant pressure to reduce costs, but aggressive cost-cutting by people who don’t understand the business creates more problems than it solves. Switching to cheaper suppliers who can’t deliver on time, negotiating prices so low that quality suffers, or eliminating contingency that protects against disruption.

The issue is having procurement professionals who understand cost in isolation rather than value in context. Someone focused purely on purchase price will make decisions that save money this quarter while creating operational chaos next year.

Effective procurement people balance cost reduction with risk management, quality maintenance, and long-term relationship sustainability. They know when a cheaper option represents genuine efficiency and when it’s just deferred problems. This commercial judgement separates exceptional procurement professionals from adequate ones.

If your procurement team consistently delivers cost savings that create operational headaches elsewhere, you’ve got a capability problem disguised as success.

Challenge 3: Supply Chain Disruption and Risk Management

Supply chain disruptions reveal which procurement teams have genuinely capable people and which have been getting by on favourable market conditions. When suppliers fail, logistics collapse, or geopolitical events disrupt supply, procurement professionals need to respond quickly with imperfect information.

This requires people who can think strategically under pressure, maintain relationships when things go wrong, and make difficult decisions about trade-offs between cost, speed, and quality. These capabilities don’t appear in job descriptions, but they determine whether your procurement function can handle crises.

Teams with experienced, commercially astute professionals navigate disruptions far better than those with technically proficient but inexperienced staff. The difference isn’t process knowledge – it’s judgement developed through dealing with previous crises and understanding how procurement decisions affect broader business operations.

Challenge 4: Stakeholder Management and Internal Credibility

Procurement teams struggle when internal stakeholders don’t trust their judgement or respect their authority. Budget holders circumvent procurement processes, department heads negotiate directly with suppliers, and strategic initiatives get undermined by people who view procurement as bureaucratic obstruction.

This credibility problem almost always stems from having procurement professionals who lack the business acumen to understand what stakeholders actually need. Someone who focuses on policy compliance over problem-solving will alienate colleagues regardless of how correct their position might be.

Strong procurement people build credibility through demonstrating commercial understanding and delivering tangible value. They speak the language of the business rather than procurement jargon. They understand that their role is enabling business objectives, not enforcing purchasing rules.

When procurement lacks internal credibility, the solution isn’t better processes or clearer policies – it’s having people who can earn respect through commercial competence and collaborative problem-solving.

Challenge 5: Talent Retention and Capability Development

Here’s the challenge that underpins all the others: procurement struggles to retain good people because organisations treat it as a cost centre rather than a strategic function. Talented professionals join with enthusiasm, realise they’re not genuinely valued, and leave for organisations that appreciate their contribution.

This creates perpetual capability gaps. You’re constantly training newcomers who’ll depart once they’ve developed valuable skills. Institutional knowledge disappears. Supplier relationships get disrupted. Strategic initiatives stall because nobody’s been around long enough to see them through.

The retention problem compounds when procurement roles are positioned as administrative positions rather than commercial careers. Good people want progression opportunities, interesting challenges, and recognition for their impact. If your procurement function can’t offer these things, you’ll keep losing people to organisations that can.

The People Solution

Every procurement challenge we’ve discussed has the same root cause: not having the right people with the right capabilities in the right roles. You can implement world-class processes, invest in sophisticated technology, and design brilliant strategies, but none of it matters without people who can execute effectively.

This makes recruitment decisions absolutely critical. Hiring someone who lacks commercial judgement or relationship management skills doesn’t just fill a vacancy inadequately – it actively undermines your procurement function’s effectiveness and credibility.

The challenge is that these crucial capabilities are difficult to assess during recruitment. CVs show qualifications and experience but don’t reveal whether someone has the judgement needed for complex supplier negotiations or the commercial awareness required for stakeholder management.

You need recruitment specialists who understand the difference between someone who can follow procurement processes and someone who can handle the messy reality of commercial relationships, supply chain crises, and stakeholder politics. Working with expert recruiters in supply chain management – like us -who’ve spent years identifying these subtle but crucial differences becomes invaluable.

Why Choose Portfolio Procurement

At Portfolio Procurement, our specialist expertise means we’ve learned to spot the capabilities that don’t appear on CVs but determine success. We understand the difference between someone who can manage a tender process and someone who can build supplier partnerships that deliver genuine competitive advantage.

With 38 years in the industry, we’ve developed networks across procurement and supply chain management that give us access to professionals who combine technical competence with commercial acumen. Rather than just matching job descriptions to CVs, we identify people who’ll strengthen your entire procurement operation.

It’s simple – we understand that procurement challenges aren’t ultimately solved by better processes or smarter technology – they’re solved by having the right people who can apply judgement, build relationships, and deliver commercial outcomes that matter.