State of Flux: Suppliers Shape Half of Customer Experience

Suppliers now deliver more than half of the customer experience – but most companies still lag in managing these partnerships. 

That's according to State of Flux’s 2025 Global Supplier Relationship Management (SRM) Research, which, in its 17th year, captures how procurement leaders are shifting their focus from transactional cost-cutting to long-term value and resilience.

This year’s theme, “From Customer of Choice to Customer Delight,” draws on input from 484 procurement and supply chain professionals across 335 companies in 13 industries worldwide.

The findings show a sharp contrast between aspiration and reality. 

While supplier impact is growing, just 6% of organisations reach mature levels of SRM capability. That gap is where risk, inefficiency and missed opportunity take root. 

Alan Day, Chairman and Founder of State of Flux, explains: “Suppliers are now an extension of the customer experience. 

“The organisations that recognise this are building supplier relationships that deliver trust, innovation, and measurable business advantage.”

From vendors to brand ambassadors

State of Flux reports that supplier partnerships are now a direct lever for customer experience – not just a cost or risk consideration. 

Case studies from Vodafone, Air Canada, US Steel, Auckland Transport and Currys illustrate how organisations embed SRM across functions to co-create value.

Air Canada uses joint planning and performance governance to improve service, quality and speed. 

Vodafone’s structured approach unfolds in three phases: develop SRM tools and templates, pilot the new ways of working, then roll them out to strategic suppliers. The company’s aim is to “ensure value negotiated prior to contract execution is maintained throughout the life of the contract… and allow extra value to be unlocked through closer collaboration with suppliers.”

Vodafone’s challenge lies in scale – coordinating across multiple operating companies and partner markets. That said, early signs are positive. SRM is “coordinating stakeholders across the business, aligning resources and exploring additional mutual value” with pilot suppliers.

US Steel and Currys also demonstrate that mature SRM is about more than compliance. It becomes a means of embedding strategic alignment, co-innovation and joint execution. As State of Flux states: “Suppliers often represent your business at the moment it matters most.”

George Booth, Chief Procurement Officer at Lloyds Banking Group, echoes this view. Speaking at the research launch in London, he reminds procurement leaders: "Our brand reputation is often in the hands of our suppliers.” 

With a team of more than 300 managing upwards of 3,000 suppliers, George ties supplier assurance and sustainability to brand protection.

 “We remain absolutely committed to managing our demand for supplier goods and services effectively,” he says, “and working with our suppliers collaboratively on our common journey to net zero.”

Rethinking resilience

Supplier-led performance doesn’t stop at customer-facing metrics. In a context where more than half of an organisation’s workforce is often made up of supplier personnel, any issues in safety, ethics or performance quickly show up in the customer journey.

The research puts forward three priorities for procurement leaders in 2025. 

• First, strengthen the foundations of SRM – building capability, frameworks and governance. 
• Second, reframe measurement – assess what suppliers deliver for customers, not just for procurement. 
• Lastly, lean into supplier-led innovation – a pathway to close gaps in both experience and resilience.

State of Flux moves SRM away from cost-control and into the centre of enterprise value. 

What this means for procurement in 2025

The report is clear that procurement is no longer simply a function that negotiates contracts or chases savings; it shapes customer outcomes, manages brand risk and secures continuity. 

In a world where traceability and transparency matter, supplier capability offers a competitive edge.

Across Europe (44% of respondents), North America (24%) and Australasia (32%), the message is consistent: “Suppliers now influence over half of the end-customer experience.” 

Companies that treat suppliers as strategic partners and embed SRM into the way they work stand to gain resilience, innovation and reputation.