Procurement operates in an uncertain environment in which disruptions -- which can range from piracy to cybercrime, natural disasters, labor disputes, and more -- pose a constant threat to supply chains. This uncertainty plays a major role in some of the biggest challenges that procurement professionals are facing right now. For example, respondents to our recent procurement survey said that their three biggest challenges are:

There's a lot about these challenges that procurement leaders can't control. You can change how procurement plans for and reacts to cybersecurity risk, but cybercriminals are constantly evolving their methods and approaches. Complexity in data management is largely an internal challenge, but also one over which procurement has relatively little control.

If you're facing supply delays or shortages like nearly half of our respondents, there are several actionable approaches that can help you mitigate the worst impacts. For example, you could find alternate sources of supply or add additional suppliers. Some organizations also work around the problem by redesigning their offerings to remove or minimize inputs that are frequently delayed or unavailable.

While it is important to have these tactics in your playbook and prepare for external risks as much as possible, don't overlook your ability to focus on what you can best control in procurement: the focus of your supplier relationships.

In this article, we specifically examine the measures that procurement tends to use to monitor suppliers and highlight some less common measures that can help add a strategic edge to your supplier relationships.

A large majority of our procurement respondents said that they track supplier responsiveness (91%), on-time delivery (90%) and quality (87%). These measures provide insights that help organizations to evaluate supplier performance in some of the most critical areas (Figure 1).

If you want to deepen your relationships with suppliers, you should also consider measures like innovation in products or services, willingness to introduce collaborative technology, or supply capacity flexibility. Only around half of respondents track each of these measures, but they could be what ends up differentiating you from among your competitors. For example, in an unpredictable procurement environment, the leading edge could very well go to organizations and suppliers that are committed to innovation or those willing to harness the power of new technologies for enhanced intelligence and decision-making support.

We found a small but meaningful difference between direct and indirect procurement when it comes to these measures (Figure 2). Respondents who carry out direct procurement tend to focus on supplier quality the most (39% of respondents, followed by 37% for on-time delivery). For indirect procurement, the focus is more toward on-time delivery (36%), with quality a close second (34%).

These differing areas of focus make sense given the goals of each type of procurement. Direct procurement involves goods, materials, and services that are directly related to the production of goods or services that a business offers. An organization's customer satisfaction, revenue, and reputation are all on the line if goods or raw materials aren't hitting quality targets.

For indirect procurement, timeliness is key because goods and services are meant for internal use by procurement's stakeholders. In this case, procurement's internal reputation, buy-in, and the ability to keep things moving smoothly are all at stake.

Quality and on-time delivery are, of course, important to both groups and each is in a close second relative to the other. Regardless of whether you're carrying out direct or indirect procurement, it's generally not acceptable to have a high-quality item arrive very late or to have an item arrive on time or even early while manifesting numerous defects.

Organizations are still facing an unpredictable external environment and that's not likely to change any time soon. Within many organizations, that external uncertainty is compounded by challenges like enterprise-wide complexity in data management.

In addition to being alert to these challenges, you should concentrate on what you can control: the focus of your supplier relationships. The good news is that most organizations that we surveyed are already measuring and recording the data they need to evaluate suppliers on critical dimensions like quality (for direct procurement) and timeliness (for indirect procurement). The next move is to take action on that information to build better, deeper supplier relationships to help weather the storms.