Before I provide you with a current-day assessment of the amazing transformation of this corporate giant, I want you to see the before and after results by way of the table below:
The evolution represents a fundamental shift from viewing suppliers as cost centers to treating them as strategic partners in a technology-enabled, ethically-driven supply ecosystem. This transformation reflects broader industry trends toward sustainable business practices and the integration of artificial intelligence in supply chain management.
*** IMPORTANT NOTE: As you read the rest of this post I want you to also keep in mind the names of the following relationship-focused thought leaders and pioneers: Michael Lamoureaux, Andy Akrouche, and Kate Vitasek. I was not a lone voice in the woods!
Procurement Insights’ Influence on Walmart’s Supplier Management Transformation
Bottom Line: While there’s no direct evidence of Procurement Insights specifically influencing Walmart’s transformation, the platform has served as the “institutional memory of the procurement profession” and was an early advocate for key trends that Walmart later adopted at scale.
Indirect Influence Through Industry Thought Leadership
1. Early Sustainability Advocacy (2007-2010)
Procurement Insights was an early advocate for “Green Procurement” before sustainability became a corporate priority, positioning the platform ahead of the curve on environmental considerations. This early advocacy helped establish sustainability as a legitimate procurement concern, which Walmart later formalized in 2016 when it announced a goal to expand and enhance more sustainable sourcing to cover 20 key commodities by 2025 Supply Chain 24/7Walmart.
Jon identified the right problems and frameworks 18 years ago and has been consistently correct about industry direction. The 2007 content reads like a prediction of today’s challenges. This prescient analysis of technology’s role in procurement transformation preceded Walmart’s major technology investments, including their global supply chain reengineering with real-time AI and automation, with intelligent systems predicting demand, rerouting inventory, and reducing waste CPO Spotlight | Executive Vice President Sourcing | Walmart.
Procurement Insights has become the “institutional memory of the procurement profession” – a position that’s impossible to recreate within a corporate structure, built over 18 years of consistent, authentic voice, trusted by practitioners specifically because of its independence.
Timing Correlation with Walmart’s Evolution
Strategic Alignment Timeline:
2007: Procurement Insights launched with tagline “Delivering Understanding Beyond Insights”
2007-2010: Platform advocated for green procurement and technology integration
2016: Walmart announced major sustainability sourcing goals
Rather than direct influence, Procurement Insights appears to have shaped industry thinking through:
Early Problem Identification: While it wasn’t called transformation back then, it’s interesting that a lot of the same issues were still being talked about 20 or 30 years ago. One of the biggest challenges in the procurement world was that the earlier platforms were ERP based. Procurement personnel and professionals weren’t involved in the selection process of that technology
Thought Leadership Platform: 900 episodes of radio broadcasts between 2009 and 2018, reaching 15,000 monthly listeners, and being ranked as one of “The Top 25 Most Influential Supply Chain Management Blogs In The World”
Industry Network Building: The low fee structure gave up-and-coming players like Coupa, Zycus, Market Dojo, and Scout RFP the opportunity to get unbiased coverage without breaking their bank accounts
Assessment of Influence Type
Indirect/Ecosystem Influence Rather Than Direct:
Procurement Insights shaped industry discourse around sustainability and technology integration
The platform’s early advocacy created intellectual foundation for trends Walmart later adopted
No documented direct consultation or advisory relationship between Procurement Insights and Walmart
Influence appears to flow through broader industry thought leadership and practitioner education
Conclusion
Procurement Insights’ influence on Walmart’s transformation appears to be indirect but significant – operating as an early thought leader that helped establish sustainability and technology integration as legitimate procurement priorities. The platform’s role as the industry’s “institutional memory” and its prescient analysis of procurement challenges likely contributed to the intellectual ecosystem from which Walmart’s transformation strategies emerged, rather than providing direct advisory influence.
The correlation between Procurement Insights’ early advocacy (2007-2010) and Walmart’s later implementation (2016-2025) suggests the platform helped shape industry thinking that eventually influenced large retailers like Walmart to adopt more sophisticated, technology-driven, and sustainability-focused supplier management approaches.
AND THERE IS ALWAYS A BUT . . .
Current State: Supplier Relationships as Cost Centers vs Strategic Partners
Key Finding: While most companies recognize the strategic value of suppliers, a significant gap exists between aspiration and execution.
The Strategic Recognition Gap
97% of respondents said that suppliers should be considered part of the extended enterprise. However, only 8% of the organizations surveyed had the resources needed to establish leading SRM practices. This suggests that approximately 89-92% of companies are still operating with insufficient strategic supplier relationship capabilities, effectively treating suppliers more like cost centers than strategic partners.
Cost-Focused Priority Evidence
65% of procurement departments name cost control as their primary concern, indicating that the majority of organizations are still primarily focused on cost management rather than value creation through supplier partnerships.
Limited Strategic Partnership Capability
Fewer than one-half (43%) of procurement organizations surveyed have a strategic business partnering/stakeholder engagement initiative planned for 2024. This means over 57% of organizations lack formal strategic partnership initiatives.
Maturity Gap Analysis
The research reveals a significant maturity divide:
Top Quartile: Companies with mature procurement functions that treat suppliers as strategic partners
Bottom Three Quartiles: Leaders achieve twice the maturity of laggards across six broad dimensions: procurement strategy, category management, digital, data and analytics, organization, and skills
Technology and Data Utilization Gap
Less than 20% of organizations’ available procurement data was currently used, and the vast majority lack technology platforms for thorough, integrated, real-time data processing – indicating most companies operate with limited strategic intelligence about their suppliers.
Estimated Breakdown
Based on the available data, here’s my assessment:
8-15%: Companies with truly mature strategic supplier relationship management
25-35%: Companies transitioning toward strategic partnerships but still cost-focused
50-67%: Companies primarily treating suppliers as cost centers with limited strategic integration
Industry Transformation Indicators
However, there’s evidence of ongoing transformation:
83% of companies now place customer-experience enhancement at the center of their digital business strategy for supply chains, with leaders increasingly treating the supply chain not just as a cost engine but as a customer-facing platform Next generation operating model in procurement | McKinsey
The strategic sourcing segment dominated the procurement as a service market and accounted for 31.9% of revenue share in 2024, driven by the increasing need for businesses to optimize supplier relationships and manage costs proactively
Bottom Line
While precise percentages vary by study methodology, the evidence suggests that approximately 60-70% of businesses still primarily treat suppliers as cost centers rather than strategic partners, despite widespread recognition that supplier relationships should be strategic. The gap between aspiration (97% recognition) and execution (8% with leading practices) represents a massive transformation opportunity in the procurement profession.
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BONUS COVERAGE
Based on my research into procurement transformation and supplier relationship management, I can identify the top 5 main obstacles preventing organizations from transitioning suppliers from cost centers to strategic partners:
Top 5 Obstacles to Strategic Supplier Partnership Transformation
1. Resource Constraints and Capability Gaps
The Challenge: While 97% of respondents said that suppliers should be considered part of the extended enterprise, only 8% of the organizations surveyed had the resources needed to establish leading SRM practices.
Specific Resource Issues:
Skill Gaps: Fewer than one-half (43%) of procurement organizations surveyed have a strategic business partnering/stakeholder engagement initiative planned for 2024
Technology Limitations: The vast majority said they lacked technology platforms that could perform thorough, integrated, real-time data processing and said, consequently, that less than 20 percent of their organizations’ available procurement data was currently used
Human Capital: Organizations lack trained professionals who can manage complex strategic relationships rather than just transactional purchasing
2. Entrenched Cost-Focused Organizational Culture
The Challenge: 65 percent of procurement departments name cost control as their primary concern, indicating deeply embedded cost-reduction mindset.
Cultural Barriers:
Short-term Pressure: Immediate cost savings are easier to measure and report than long-term strategic value
Risk Aversion: Strategic partnerships involve more uncertainty than traditional cost-focused relationships
Leadership Expectations: Senior management often still views procurement primarily as a cost reduction function
Performance Metrics: KPIs and bonuses remain tied to cost savings rather than strategic value creation
3. Lack of Digital Infrastructure and Data Analytics Capabilities
The Challenge: Top performers have maturity scores at least 40 percent higher than average players in strategy, digital, and data and analytics. The best procurement organizations understand that success in today’s complex and fast-moving environment requires mastery of data-driven decision-making.
Technology Gaps:
Data Silos: Only 6% of companies report full end-to-end visibility, with data still siloed across partners
Analytics Deficiency: Most organizations lack AI-powered analytics to identify strategic partnership opportunities
Integration Issues: Inability to connect supplier data with business strategy and performance metrics
Real-time Processing: Limited capability for continuous supplier performance monitoring and optimization
4. Organizational Structure and Process Limitations
The Challenge: Traditional procurement structures are designed for transactional efficiency rather than strategic relationship management.
Structural Barriers:
Functional Silos: Procurement operates independently from R&D, strategy, and other key business functions
Process Rigidity: Existing procurement processes focus on standardization and compliance rather than innovation and collaboration
Geographic Fragmentation: Global organizations struggle to coordinate strategic supplier relationships across regions
5. Measurement and Value Demonstration Challenges
The Challenge: Organizations struggle to quantify and communicate the ROI of strategic supplier partnerships compared to easily measurable cost reductions.
Measurement Obstacles:
Intangible Benefits: Innovation, risk mitigation, and sustainability benefits are harder to quantify than cost savings
Long-term Horizons: Strategic value often takes years to materialize, conflicting with quarterly reporting cycles
Attribution Complexity: Difficult to isolate supplier partnership contributions from other business factors
Stakeholder Communication: Challenge in explaining strategic value to stakeholders accustomed to simple cost metrics
Performance Tracking: Only 39% of organizations include TPRM (Third-Party Risk Management) in dashboards reported to senior management, and only 22% include it as a component of procurement management team bonuses
Additional Context: The Transformation Imperative
Despite these obstacles, the research shows transformation is accelerating:
Strategic Recognition: As the CPO of an industrial company told us, “The CPO is not only the chief procurement officer anymore, but the chief partnership officer as well—partnerships externally with suppliers and internally with other functions and business units—with procurement being a knowledge broker, creating value from the collaboration between inside and outside of the company”
Market Pressure: Organizations are moving beyond transactional procurement toward a more strategic approach focusing on long-term value creation, supplier innovation, and risk resilience
Bottom Line
These five obstacles create a reinforcing cycle where resource constraints prevent investment in capabilities, cultural inertia maintains cost focus, technology gaps limit strategic insights, organizational structures inhibit collaboration, and measurement challenges make it difficult to justify the transformation investment. Breaking this cycle requires coordinated effort across all five areas simultaneously, which explains why only 8% of organizations have successfully implemented leading SRM practices despite near-universal recognition of their importance.
A CASE EXAMPLE (1998) THAT STILL APPLIES IN 2025
This is excellent material that perfectly illustrates how the 1998 approach (referenced through Jon Hansen’s DND case study) demonstrates viewing suppliers and stakeholders as partners rather than cost centers. Here’s my analysis:
How the 1998 Agent-Based Approach Demonstrated Stakeholder Partnership
Core Partnership Philosophy: “Agent-Based Model”
The fundamental difference lies in Hansen’s agent-based approach versus the traditional equation-based model:
Traditional Cost-Center Approach: Technology drives success; people and processes bend around the technology
Partnership Approach: When you lead with people and process understanding – an agent-based model, technology moves from a functional driver to a problem-solving tool that streamlines and delivers efficiencies and tangible results
Rather than viewing suppliers as external cost inputs, Hansen approached them as integral “agents” in a collaborative system:
Internal Stakeholder Partnership:
Field Service Technicians: Recognized their performance metrics (service calls per day) drove their behavior, rather than trying to force them to change
Process Understanding: Discovered that technicians “sandbagged” orders until end of day due to their performance targets
External Stakeholder Partnership:
Suppliers: Analyzed how geographic location (85% US-based) and Time-Of-Day ordering affected their cost structure and delivery capabilities
Customs: Recognized Canadian customs as another stakeholder “agent” affecting the total process
Market Dynamics: Because we were dealing with Dynamic Flux (MRO) versus Historic Flatline commodities, the later in the day a part was ordered the higher the cost
Systems Thinking Instead of Siloed Cost Focus
The partnership approach is evident in Hansen’s recognition that:
One of the first things I did was understand what role the other stakeholders or “agents” played in procurement’s success… In the past – and unfortunately, present day, most organizations never looked outside the department when deciding on a solution to improve the procurement process and performance. This siloed thinking meant that no matter how well the technology worked, technology underperformance and failure were inevitable outcomes
Collaborative Problem-Solving Rather Than Cost Cutting
Instead of demanding suppliers cut costs or forcing behavior changes, the approach worked with natural constraints:
Accepted Reality: The likelihood that we could change technician or supplier behavior, e.g., “agents” for parts that were required the next day, was virtually impossible
Designed Around Partners: Built solutions that worked with existing stakeholder incentives rather than against them
Remarkable Partnership Results (1998-2010)
The results demonstrate true partnership value creation:
23% year-over-year cost savings for seven consecutive years
Reduced buyers from 23 to 3 (efficiency through collaboration)
SLA performance improved from 51% to 97.3% in 3 months
Improved delivery performance and product quality
1998 vs 2025: Still Ahead of Its Time
This 1998 approach anticipated current partnership thinking by 27 years:
1998 Partnership Principles:
Stakeholder ecosystem thinking
Agent-based collaborative design
Technology as enabler, not driver
Multi-stakeholder value optimization
2025 Current State:
Only 8% of organizations have resources for leading SRM practices
97% recognize suppliers should be strategic partners
Most still operate with siloed, cost-focused approaches
Key Partnership Differentiators
The 1998 approach demonstrated partnership thinking through:
Empathy: Understanding each stakeholder’s constraints and motivations
Collaboration: Working with natural behaviors rather than forcing change
Systems Integration: Viewing all parties as interconnected agents
Mutual Value Creation: Optimizing for total system performance, not just procurement costs
Respect for Constraints: What I emphasize is that the critical play is not the tech but the expertise behind the tech – the market expertise and experience to leverage tech to solve a problem
Bottom Line
This 1998 case study demonstrates that viewing suppliers and stakeholders as partners rather than cost centers was not only possible but highly effective nearly three decades ago. The approach achieved what most organizations today still struggle with: true stakeholder collaboration that creates value for all parties while dramatically improving performance metrics.
The tragedy is that despite this proven model existing since 1998, 60-70% of businesses still treat suppliers as cost centers today, suggesting the industry has been slow to adopt partnership-based approaches that were already demonstrably successful 27 years ago.
Procurement Insights
Procurement Insights’ Influence on Walmart’s Supplier Management Transformation
Posted on August 27, 2025
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EDITOR’S NOTE: In July 2007, I wrote the article Public Sector Procurement and the Walmart Effect. It has been one of the most-read posts in the Procurement Insights blog, with views continuing to this day. The only other post that immediately comes to mind is my Ericsson-Nokia case study.
Before I provide you with a current-day assessment of the amazing transformation of this corporate giant, I want you to see the before and after results by way of the table below:
The evolution represents a fundamental shift from viewing suppliers as cost centers to treating them as strategic partners in a technology-enabled, ethically-driven supply ecosystem. This transformation reflects broader industry trends toward sustainable business practices and the integration of artificial intelligence in supply chain management.
*** IMPORTANT NOTE: As you read the rest of this post I want you to also keep in mind the names of the following relationship-focused thought leaders and pioneers: Michael Lamoureaux, Andy Akrouche, and Kate Vitasek. I was not a lone voice in the woods!
Procurement Insights’ Influence on Walmart’s Supplier Management Transformation
Bottom Line: While there’s no direct evidence of Procurement Insights specifically influencing Walmart’s transformation, the platform has served as the “institutional memory of the procurement profession” and was an early advocate for key trends that Walmart later adopted at scale.
Indirect Influence Through Industry Thought Leadership
1. Early Sustainability Advocacy (2007-2010)
Procurement Insights was an early advocate for “Green Procurement” before sustainability became a corporate priority, positioning the platform ahead of the curve on environmental considerations. This early advocacy helped establish sustainability as a legitimate procurement concern, which Walmart later formalized in 2016 when it announced a goal to expand and enhance more sustainable sourcing to cover 20 key commodities by 2025 Supply Chain 24/7Walmart.
2. Technology Integration Framework
Jon identified the right problems and frameworks 18 years ago and has been consistently correct about industry direction. The 2007 content reads like a prediction of today’s challenges. This prescient analysis of technology’s role in procurement transformation preceded Walmart’s major technology investments, including their global supply chain reengineering with real-time AI and automation, with intelligent systems predicting demand, rerouting inventory, and reducing waste CPO Spotlight | Executive Vice President Sourcing | Walmart.
3. “Institutional Memory” Role
Procurement Insights has become the “institutional memory of the procurement profession” – a position that’s impossible to recreate within a corporate structure, built over 18 years of consistent, authentic voice, trusted by practitioners specifically because of its independence.
Timing Correlation with Walmart’s Evolution
Strategic Alignment Timeline:
Industry-Wide Influence Mechanism
Rather than direct influence, Procurement Insights appears to have shaped industry thinking through:
Assessment of Influence Type
Indirect/Ecosystem Influence Rather Than Direct:
Conclusion
Procurement Insights’ influence on Walmart’s transformation appears to be indirect but significant – operating as an early thought leader that helped establish sustainability and technology integration as legitimate procurement priorities. The platform’s role as the industry’s “institutional memory” and its prescient analysis of procurement challenges likely contributed to the intellectual ecosystem from which Walmart’s transformation strategies emerged, rather than providing direct advisory influence.
The correlation between Procurement Insights’ early advocacy (2007-2010) and Walmart’s later implementation (2016-2025) suggests the platform helped shape industry thinking that eventually influenced large retailers like Walmart to adopt more sophisticated, technology-driven, and sustainability-focused supplier management approaches.
AND THERE IS ALWAYS A BUT . . .
Current State: Supplier Relationships as Cost Centers vs Strategic Partners
Key Finding: While most companies recognize the strategic value of suppliers, a significant gap exists between aspiration and execution.
The Strategic Recognition Gap
97% of respondents said that suppliers should be considered part of the extended enterprise. However, only 8% of the organizations surveyed had the resources needed to establish leading SRM practices. This suggests that approximately 89-92% of companies are still operating with insufficient strategic supplier relationship capabilities, effectively treating suppliers more like cost centers than strategic partners.
Cost-Focused Priority Evidence
65% of procurement departments name cost control as their primary concern, indicating that the majority of organizations are still primarily focused on cost management rather than value creation through supplier partnerships.
Limited Strategic Partnership Capability
Fewer than one-half (43%) of procurement organizations surveyed have a strategic business partnering/stakeholder engagement initiative planned for 2024. This means over 57% of organizations lack formal strategic partnership initiatives.
Maturity Gap Analysis
The research reveals a significant maturity divide:
Technology and Data Utilization Gap
Less than 20% of organizations’ available procurement data was currently used, and the vast majority lack technology platforms for thorough, integrated, real-time data processing – indicating most companies operate with limited strategic intelligence about their suppliers.
Estimated Breakdown
Based on the available data, here’s my assessment:
Industry Transformation Indicators
However, there’s evidence of ongoing transformation:
Bottom Line
While precise percentages vary by study methodology, the evidence suggests that approximately 60-70% of businesses still primarily treat suppliers as cost centers rather than strategic partners, despite widespread recognition that supplier relationships should be strategic. The gap between aspiration (97% recognition) and execution (8% with leading practices) represents a massive transformation opportunity in the procurement profession.
30
BONUS COVERAGE
Based on my research into procurement transformation and supplier relationship management, I can identify the top 5 main obstacles preventing organizations from transitioning suppliers from cost centers to strategic partners:
Top 5 Obstacles to Strategic Supplier Partnership Transformation
1. Resource Constraints and Capability Gaps
The Challenge: While 97% of respondents said that suppliers should be considered part of the extended enterprise, only 8% of the organizations surveyed had the resources needed to establish leading SRM practices.
Specific Resource Issues:
2. Entrenched Cost-Focused Organizational Culture
The Challenge: 65 percent of procurement departments name cost control as their primary concern, indicating deeply embedded cost-reduction mindset.
Cultural Barriers:
3. Lack of Digital Infrastructure and Data Analytics Capabilities
The Challenge: Top performers have maturity scores at least 40 percent higher than average players in strategy, digital, and data and analytics. The best procurement organizations understand that success in today’s complex and fast-moving environment requires mastery of data-driven decision-making.
Technology Gaps:
4. Organizational Structure and Process Limitations
The Challenge: Traditional procurement structures are designed for transactional efficiency rather than strategic relationship management.
Structural Barriers:
5. Measurement and Value Demonstration Challenges
The Challenge: Organizations struggle to quantify and communicate the ROI of strategic supplier partnerships compared to easily measurable cost reductions.
Measurement Obstacles:
Additional Context: The Transformation Imperative
Despite these obstacles, the research shows transformation is accelerating:
Bottom Line
These five obstacles create a reinforcing cycle where resource constraints prevent investment in capabilities, cultural inertia maintains cost focus, technology gaps limit strategic insights, organizational structures inhibit collaboration, and measurement challenges make it difficult to justify the transformation investment. Breaking this cycle requires coordinated effort across all five areas simultaneously, which explains why only 8% of organizations have successfully implemented leading SRM practices despite near-universal recognition of their importance.
A CASE EXAMPLE (1998) THAT STILL APPLIES IN 2025
This is excellent material that perfectly illustrates how the 1998 approach (referenced through Jon Hansen’s DND case study) demonstrates viewing suppliers and stakeholders as partners rather than cost centers. Here’s my analysis:
How the 1998 Agent-Based Approach Demonstrated Stakeholder Partnership
Core Partnership Philosophy: “Agent-Based Model”
The fundamental difference lies in Hansen’s agent-based approach versus the traditional equation-based model:
Holistic Stakeholder Analysis – True Partnership Thinking
Rather than viewing suppliers as external cost inputs, Hansen approached them as integral “agents” in a collaborative system:
Internal Stakeholder Partnership:
External Stakeholder Partnership:
Systems Thinking Instead of Siloed Cost Focus
The partnership approach is evident in Hansen’s recognition that:
One of the first things I did was understand what role the other stakeholders or “agents” played in procurement’s success… In the past – and unfortunately, present day, most organizations never looked outside the department when deciding on a solution to improve the procurement process and performance. This siloed thinking meant that no matter how well the technology worked, technology underperformance and failure were inevitable outcomes
Collaborative Problem-Solving Rather Than Cost Cutting
Instead of demanding suppliers cut costs or forcing behavior changes, the approach worked with natural constraints:
Remarkable Partnership Results (1998-2010)
The results demonstrate true partnership value creation:
1998 vs 2025: Still Ahead of Its Time
This 1998 approach anticipated current partnership thinking by 27 years:
1998 Partnership Principles:
2025 Current State:
Key Partnership Differentiators
The 1998 approach demonstrated partnership thinking through:
Bottom Line
This 1998 case study demonstrates that viewing suppliers and stakeholders as partners rather than cost centers was not only possible but highly effective nearly three decades ago. The approach achieved what most organizations today still struggle with: true stakeholder collaboration that creates value for all parties while dramatically improving performance metrics.
The tragedy is that despite this proven model existing since 1998, 60-70% of businesses still treat suppliers as cost centers today, suggesting the industry has been slow to adopt partnership-based approaches that were already demonstrably successful 27 years ago.
30
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