I’ve got a fair amount of PTSD from dealing with what corporate types call “procurement” and what normal people might call “the department that can turn buying socks into a six-month psychological endurance test.”
For those lucky enough never to have encountered it, procurement is the part of an organisation responsible for buying goods and services. In theory, it exists to help companies spend money wisely, negotiate sensible deals, and ensure everyone gets fair value.
That’s the theory anyway.
In practice, these departments often fall somewhere between professional bargain hunter and Dickensian landlord. Somewhere along the line, many organisations seem to have confused “getting good value” with “seeing how much suffering a supplier can absorb before visibly twitching.”
Back when we were doing a lot of external manufacturing work at my business, Cactus, we supplied large organisations with uniforms. There was always something satisfying about seeing gear we’d made being used by people doing genuinely important work. The less satisfying part was the commercial theatre surrounding it all.
Government agencies rarely buy directly anymore. Instead, giant contractors sit in the middle, passing the actual production work down through layers of smaller businesses. By the time it reaches the people actually making the thing, the margins have been squeezed harder than a tomato in a toddler’s lunchbox.
The smaller the supplier, the less ability they have to push back. Large corporations have teams of lawyers and commercial managers. Small manufacturers have Steve from accounts and a calculator held together with sticky tape. So the conversation goes roughly like this:
“Here are the terms.” “These seem slightly unhinged.” “Yes.” “And if we don’t agree?” “You don’t get the work.”
There’s a brutal efficiency to it.
What always puzzled me was this: if the whole purpose is supposedly to create value, why does so much effort go into extracting it from the smallest businesses in the chain? The answer is that many organisations define value incredibly narrowly. If someone can report they shaved another few percent off a supplier’s margin, stretched payment terms out to sometime before the collapse of civilisation, and inserted liability clauses requiring emotional support to read, they’re considered successful.
The damage doesn’t show up immediately on a spreadsheet. What shows up later are suppliers quietly cutting corners to survive, or smaller companies deciding it simply isn’t worth the stress and walking away. Then everyone acts bewildered when supply chains become fragile, and nobody wants to bid for contracts anymore.
The good operators, and there genuinely are some, understand that healthy supplier relationships are worth something. A supplier that isn’t being slowly strangled can invest in better products and better service. More importantly, when things go wrong, they’ll actually answer the phone instead of pretending to be in a tunnel.
The better organisations think in terms of partnership rather than extraction. I know “partnership” sounds like one of those dreadful LinkedIn words, usually accompanied by a photo of executives pointing enthusiastically at a laptop. But the logic is solid. Reasonable payment terms mean smaller businesses aren’t secretly financing billion-dollar organisations from their overdrafts. Fairer contracts mean problems get solved instead of immediately escalating into legal trench warfare. Longer relationships mean suppliers invest in understanding the customer, rather than treating every contract like a temporary hostage situation.
None of this means organisations should stop negotiating properly. Competition matters. Accountability matters. But there’s a difference between being commercially disciplined and behaving like a seagull fighting over a chip. One raises standards. The other slowly destroys the ecosystem it depends on.
For smaller businesses, the choices are often grim. Walk away from large contracts, and you lose volume that’s hard to replace. Accept terrible terms, and you absorb risks that can genuinely threaten the business. It’s not exactly a fair fight when one side has a legal department the size of a mid-sized city, and the other has Gary skimming the contract between forklift deliveries.
What would improve things? Organisations measuring success by more than short-term savings. More accountability for how terms flow down supply chains. And more people recognising that a resilient supplier base is worth considerably more than winning every negotiation.
Because value doesn’t only flow one way. The organisations that understand this end up with suppliers who are loyal, responsive, and willing to go the extra mile when it matters. The ones that don’t eventually find themselves in a crisis, desperately calling suppliers they spent years grinding into dust, wondering why nobody sounds particularly enthusiastic about helping.
