Savings start with strategy: compete, collaborate, and become the customer suppliers value most

In building an effective strategy to save for organisations’ growth, we have a strong pillar in our “PRIME strategy” which focuses on increasing supplier competition and to become customer of choice. In this article we shall discuss in depth how organisations can create an healthy environment of competition, collaboration and still save big.

Procurement isn’t just about negotiating the lowest price anymore. Today, it’s about building strong partnerships while keeping healthy competition alive. The ultimate goal? To become a customer of choice- the one suppliers go the extra mile for, they share innovation and help in maintaining competitive advantage. Once suppliers become partners, the business can grow more efficiently and exponentially. The question arise; how you can make that happen? 

With our expertise and experience, we have put together a high level strategy to achieve this:

1. Understand Your Supplier Landscape

Not all suppliers play the same role in your success. Start by segmenting them using tools like the Kraljic Matrix:

• Strategic partners: High impact, high risk – these suppliers are critical for innovation and continuity. Invest in strong relationships.
• Leverage suppliers: High impact, low risk – here, competitive pricing and performance matter most.
• Bottleneck suppliers: Low impact, high risk – focus on risk mitigation and backup plans.
• Non-critical suppliers: Low impact, low risk – streamline processes and keep costs efficient.

This segmentation helps you decide where to collaborate deeply and where to drive competition.

2. Keep Competition Fair and Transparent

Healthy competition ensures suppliers stay motivated without damaging trust:

• Maintain multi-sourcing for key categories to avoid dependency.
• Regularly benchmark costs, quality, and delivery performance to keep everyone sharp.
• Use digital RFQs or e-auctions for standardised products—these tools make pricing transparent and fair.

The key is to make competition structured and respectful, not adversarial.

3. Collaborate for Innovation

Suppliers often hold insights and capabilities you don’t. Tap into that:

• Launch joint development projects for new products or process improvements.
• Share demand forecasts and market trends so suppliers can plan and invest confidently.
• Involve them early in design and specification stages—this reduces costs and accelerates time-to-market.

Collaboration turns suppliers into partners, not just vendors.

4. Build Strong Relationships

A structured Supplier Relationship Management (SRM) program is essential:

• For top-tier suppliers: Hold quarterly business reviews, set joint KPIs, and organise innovation workshops.
• For others: Use performance scorecards and compliance checks to maintain standards.

Recognition matters—celebrate suppliers who excel in innovation, sustainability, and reliability. It builds loyalty and trust.

5. Be the Customer Everyone Wants

Suppliers prioritise customers who make their lives easier:

• Pay on time and offer predictable volumes—cash flow matters.
• Communicate clearly and keep contracts fair—avoid surprises.
• Share strategic goals like sustainability and digitalisation—suppliers want to align with your vision.

When suppliers see you as a partner, not a pressure point, they’ll prioritise you.

6. Use Technology to Stay Connected

Digital tools make collaboration seamless:

• Supplier portals for real-time updates and document sharing.
• Analytics dashboards for performance tracking, risk alerts, and predictive insights.

Technology isn’t just about efficiency—it’s about building transparency and trust.

The Bottom Line

Balancing competition and collaboration isn’t just about cost; it’s about creating mutual value. When you segment suppliers, foster innovation, and build trust, you position your organisation as a customer of choice—the one suppliers want to work with first.