Every CEO I talk to says some version of the same thing: I wish my procurement team were more strategic. Every procurement leader I talk to says some version of the same thing back: I’d love to be strategic, but the truck is late, the COA is missing, and the supplier just repriced the PO. They’re both right. And the second group is doing exactly what the company’s incentives tell them to do. This isn’t a talent problem. It’s a math problem, and it’s fixable.
Here’s the math from one call this week: 1,500 ingredients, 250 suppliers, three buyers. That’s 500 ingredients per person. Another company the same week: 1,400 raw materials, several hundred suppliers, four or five buyers plus an open director seat. These teams keep the lines running on ratios that shouldn’t work. The company never goes down because of them.
Before you conclude the answer is more heads, it isn’t. Nestlé has on the order of a thousand people in procurement, and I’d bet money they would tell you they’re behind too. The backlog of strategic work scales with the number of ingredients, suppliers, and SKUs, and it grows faster than any headcount plan. You cannot hire your way to caught up. The question isn’t how many people you have. It’s how much leverage each one has. (Nestlé’s own answer took six years of data harmonization before any AI worked — mid-market gets a shorter path.)
So if you’ve been wondering why the margin project never starts, here are five signs the problem is the system your team works inside, not the team. None of these are their fault. All of them are fixable.
1. Nobody can tell you what percent of spend got a competitive bid last year
Ask this question this week. At most companies I talk to, the honest answer is somewhere between 2% and 20%. Which means on the other 80% to 98% of spend, you’re paying whatever the incumbent supplier last quoted, and you have no idea whether that’s market.
Your team isn’t hiding this number. They’ve just never been given it as a goal. Teams hit the targets they’re given, and in most procurement seats the only target that gets measured is “don’t run out.” The reasons operators give for not bidding out spend almost all collapse into one: the RFP gets treated as a crisis event instead of a standing process. Fix: make bid coverage a KPI that sits next to on-time delivery. What gets measured gets time.
2. Your top ingredients don’t have a qualified backup supplier
A co-manufacturer CEO told me this week that one of his citric acid suppliers closed its doors overnight. No warning. They buy truckloads. There was no second supplier lined up, so the team dropped everything and scrambled.
Nobody on that team forgot that backups matter. Qualifying a second source takes hours of outreach, samples, spec matching, and QA sign-off, and those hours were spent keeping product on the dock. Fix: don’t try to backstop 1,500 ingredients. Pick the top 20 by spend plus anything single-sourced and scary. One ingredient, one owner, one date. That prioritized approach to dual sourcing is the whole of the mid-market redundancy playbook.
3. Price changes get keyed into the ERP by hand
A supplier emails a new price. A buyer reads the email, opens the ERP, types the number in so accounting has it. Multiply by every price change on every ingredient, forever. One supply chain exec described his Oracle master data to me this way: there’s a lot of information we should be keeping accurate, and nobody has the time.
This is the clearest place where leverage beats headcount. Reading emails and re-typing what’s in them is exactly the kind of repetitive, unstructured work that software can now do — email was always the system of record, and machines can finally read it. Frankly, this is why I started Waystation. But whatever tool you use, the principle holds: if a human is the queue between your suppliers and your systems, the queue loses every time.
4. Your buyers are really project managers
At a lot of mid-market companies, especially co-manufacturers, the person with “buyer” in their title is talking to customers, planning materials, cutting POs, creating work orders, and coordinating ship dates. Sourcing new suppliers is something R&D does while solving a formula, and R&D rightly optimizes for the ingredient that completes the product, not the one at the best price.
That’s three jobs in one seat, and the strategic one always loses. Here’s why: the urgent work has a sender. A supplier, a customer, a QA lead, someone waiting on the other end of every email. The important work has no sender. Nobody emails you asking you to run a bid. So the inbox becomes the to-do list, and the inbox is sorted against you. Fix: separate “get it here on time” from “get it at market price with a backup,” on paper, even if it’s the same person. Different jobs, different rhythms, different measures.
5. The strategic work is waiting on a hire
I hear this constantly: we’ll get to strategic sourcing once the new director starts, once the ERP upgrade lands, once the open seat is filled. Reasonable in the moment. But the regular work is never done. It can’t be. So waiting for a calm quarter to start the important work is the same as never starting. When a team says it’s underwater, that’s a strategy gap, not a staffing shortage.
Your team already knows what to do. What they’ve never had is the air cover to do it. Fix: block the time now. Monday morning, two hours, one ingredient, one bid, one name on it. Small, but it’s the difference between a plan and an intention.
The point
If your procurement team is fighting fires all day, thank them. They’re the reason your lines run. Then change the arithmetic. Not by adding bodies to a backlog that outgrows every headcount plan, but by taking the chasing, the re-typing, and the document wrangling off human hands so the people you already have can finally do the work you actually hired them for.
The margin is sitting there. Your team can see it. Give them the leverage to go get it.
