You renew a contract with a price increase because nobody had time to check the market. You buy an ingredient at spot rates because the replacement supplier never got qualified. Both cost real margin, and both get deprioritized as the urgent takes over.
In most CPG companies, the cause is structural. The first procurement hire is doing three jobs: purchasing, strategic sourcing, and procurement. They are not separated at that size because they can’t be. There isn’t the budget for it.
Purchasing focuses on the day-to-day execution, making sure materials are where they need to be when they need to be there. Strategic sourcing focuses on the sourcing itself: finding and qualifying suppliers, negotiating pricing, and keeping up on market trends to stay ahead of them. Procurement is both the umbrella over those two and a role of its own, covering contract management, supplier partnership, and performance oversight.
That is three distinct sets of work under one job title. Most companies keep it in one seat longer than they should, and then find out the hard way which of the three skill sets they were unknowingly missing.
Three different muscles
Purchasing, strategic sourcing, and procurement are not three rungs on one ladder. Each is a distinct set of responsibilities that larger organizations staff separately, with their own career paths, and each one carries work the others don’t.
Purchasing rewards process discipline and accuracy. The role requires that POs are issued with proper lead time, every time, and that orders land when they need to with only what they need to, every time. A colleague of mine once said he was curious how we ended up with so much less scrap than he had seen in previous roles during times of transition. The answer is not glamorous. It’s checking every line at every co-man ad nauseam and maintaining the highest level of detail. That’s a skill anyone in purchasing needs in order to succeed in the role.
Strategic sourcing rewards market analysis and negotiation skills. The role requires continually finding new suppliers and new opportunities so the cost and quality tradeoff is constantly being met. A perfect example is the time I needed sprouted seeds for an upcoming product launch and couldn’t find everything we needed in that format on the market. It came down to connecting one supplier of one ingredient with a facility that could handle the sprouting, which is what let us launch on time with the ingredient panel we wanted.
Procurement ties it all together and rewards data stewardship and relationship management. The role requires oversight on how suppliers are performing. Are they meeting expectations (and what data is maintained that says yes or no), are they holding up contractual obligations, and are they truly partners you can grow with. I’ve implemented Supplier Partnership Programs in the past, formal project outlines that laid out expectations for how we’d work together. Most suppliers found them beneficial and were more than willing to participate.
What it looks like as an organization evolves
As a company grows, anything urgent naturally overtakes anything strategic. I always say that supply chain is 80% firedrills and 20% strategic work, and I stand by it.
The person in the early-stage procurement role shifts toward purchasing execution because they now have to chase 100 deliveries instead of 20, or manage 50 ingredients instead of 25. They become more constrained and have to focus on the day-to-day to keep the business running. The alternative is downtime charges from a missed production run, or lost revenue from shorted orders. Procurement work at least has someone chasing it: legal needs the contract, finance needs the accrual, a supplier wants their scorecard meeting.
Strategic sourcing has nobody waiting on the other end, which is why it’s the one that goes first. It takes a backseat because it has to, not because it isn’t important. What many companies realize too late is that losing focus here is a cost as well, just less of one up front. It’s margin creep from accepting a price increase you didn’t have time to benchmark, or from buying at spot because you couldn’t qualify a new supplier in time. That’s the same gap that shows up when a team is underwater and stops running RFPs, and it’s how a supplier ends up 30% over market without anyone noticing.
Here’s the part that makes this hard to catch: nobody ever decides to stop doing strategic sourcing. There’s no meeting where someone announces the market check isn’t worth it this quarter. It just doesn’t happen, and then it doesn’t happen again, and eighteen months later you’re renewing at a number nobody loves.
The work didn’t get cut. It just got crowded out, one urgent thing at a time.
The fix isn’t hiring three people
The real question isn’t how to staff three roles. It’s what can carry more of the 80%.
Most mid-market companies can’t hire three people, and telling them to isn’t useful. What actually moves the needle is taking enough of the chasing and rekeying off one person’s plate that the strategic work has somewhere to live. That’s the gap Waystation is built for, and it’s why the pitch isn’t about replacing the seat.
The 80% will always find you. The 20% only happens if someone protects it.
