Top 5 Procurement Mistakes- And How to Avoid Them

Posted on Mon May 5, 2025.

Procurement is the engine behind every well-oiled business. When it is running smoothly, costs are controlled, suppliers are aligned, and operations thrive. But when mistakes creep in—especially in the non -use of professional strategic sourcing—they can ripple through the

entire organization, costing time, money, and competitive advantage.

Most of the errors derive from the attitude of top management towards the discipline, that needs to adjust to enable the strategic benefits that will emanate.

At Keystone Strategic Sourcing Consulting (Keystone SSC), we’ve worked with companies across South Africa and beyond, helping them identify and resolve procurement blind spots.

Here are the top five procurement mistakes we see most often—plus how to avoid them.

1. Treating Procurement as a Transaction, not a Strategy

Oversight: Many organizations still see procurement as a reactive, order-placing function rather than a proactive, core strategic driver.
Solution: Elevate procurement to the strategic table. Align sourcing decisions with overall business goals and involve procurement early in project planning. This allows for smarter supplier selection, better contract terms, and proactive cost management.

2. Poor Supplier Relationship Management (SRM)

Oversight: Failing to engage with suppliers beyond the basics can lead to misaligned expectations, delays, or missed opportunities for innovation.
Solution: Build long-term, value-driven partnerships. Implement a formal SRM process to track performance, encourage collaboration, and identify opportunities for mutual growth. Strong relationships often lead to preferential pricing, service improvements, and resilience in supply chain disruptions.

Contracting terms need to be balanced and there needs to be leverage over Service Levels that will enable a healthy engagement. Keystone SSC is intricately engaged in the drafting of contracts and service level agreements to ensure the relationship in sustained and robust.

3. Inadequate Contract Management

Oversight: Contracts that are poorly drafted, not regularly reviewed, or ignored after signing can result in legal exposure, non-compliance, and financial leakage.
Solution: Treat contracts as living documents. Implement contract lifecycle management (CLM) systems and ensure performance is regularly reviewed against service level agreements (SLAs). Keystone SSC offers end-to-end contract management services over the term, synergistically reducing risk and improving value.

4. Lack of Spend Visibility

Oversight: If you can’t see where your money is going, you can’t control it. Disconnected systems and poor data management make it impossible to identify waste or savings.
Solution: Conduct regular spend analysis across departments and suppliers. Group your procurement data into categories, and track KPIs like total cost of ownership (TCO), supplier lead time, and delivery accuracy. Strategic sourcing thrives on clean, visible data.

Keystone SSC will enable this and enhance the decision making power on a monthly basis ensuring a process of continuous improvement.

5. Ignoring Risk in the Supply Chain

Oversight: Overreliance on a few suppliers, lack of contingency planning, and ignoring geopolitical or economic risks can leave your business vulnerable.
Solution: Integrate risk assessment into every stage of the sourcing process. Use supplier audits, diversify sources where possible, and create continuity plans for mission-critical supply lines.

Conclusion

Procurement today is more than just buying—it’s about strategy, risk management, and long-term value creation. By identifying and avoiding these common mistakes, your business can unlock new efficiencies, strengthen supplier relationships, and gain a real competitive edge.

At Keystone SSC, we specialize in helping businesses optimize procurement and strategic sourcing processes. Whether you're looking to reduce spend, renegotiate contracts, or reimagine your sourcing strategy—we’re here to help.