“The worst-performing pillar every year is people,” says Alan Day.
Alan Day, Chairman and Founder of State of Flux, presented the findings of the 2026 Global SRM Research at their Annual SRM Summit on November 3. The study assessed 387 participants from 284 organizations across industries and regions against the Six Pillars of SRM: Value, Engagement, Governance, People, Technology and Collaboration.
Each participant was rated on a four-stage scale (Undeveloped, Developing, Established and Advanced), and the combined score places them as Leaders, Fast Followers or Followers. In Day’s presentation, 6% of respondents qualified as Leaders, 21% as Fast Followers and 73% as Followers.
The research is cross-industry. For pharma and biotech sponsors, it tracks the same practices that shape relationships with CDMOs, CROs and critical materials suppliers: segmentation, governance, joint planning and value tracking.
This year’s theme was “Making SRM Stick”, which looks at what happens after an SRM program launches.
“Most organizations can launch SRM. They can build a segmentation model, create scorecards, establish governance forums, and run executive reviews. Sustaining those practices to survive the first burst of enthusiasm is far harder,” Day writes in the report.
People Remains the Least Developed Pillar
Across all respondents, People scores 30%, the lowest of the six pillars. Technology (34%) and Governance (40%) also sit at the Developing level. Engagement, at 52%, is the strongest pillar overall and the only all-respondent score to reach Established.
Value is the only pillar where Leaders reach the Advanced level, at 79%. It also shows the widest gap between groups, falling to 69% among Fast Followers and 34% among Followers.
Within the People pillar, 48% of respondents have defined the main SRM role, up from 44% in 2025, and 45% have implemented SRM training, up from 36%. Only 18% have completed an individual SRM skills and competency assessment, down from 26%.
Leaders show a different profile. All Leaders have now defined the main SRM role, up from 84% in 2025, and 71% identify influencing skills as important for supplier management, up from 35%. Three-quarters (76%) plan additional training or development for internal stakeholders in the next 12 months.
Day drew a line between individual rapport and institutional capability. “Personal relationships are not industrial-strength SRM relationships,” he said.
Executive Support Has Not Reached the Budget Holders
Among Leaders, 71% report strong and active engagement from management and executives, up from 61% in 2025. Inside organizations, the picture is uneven. Forty percent of respondents say internal procurement colleagues lack knowledge of the value supplier management delivers, and the same proportion report a lack of understanding of what supplier management is. Competing priorities are the most common barrier across stakeholder groups.
“Execs get it. Middle management with the budgets don’t,” Day said. “Category managers don’t know what SRM is.”
He described this as a sales and marketing challenge for SRM teams, and said programs need both internal program support and supplier support to succeed.
“SRM should be led by procurement, but it cannot be owned by procurement alone,” Day writes in the report.
Where Leaders Pull Ahead
The gap between Leaders and Followers is widest in strategy and governance. Three-quarters (76%) of Leaders have an SRM strategy fully aligned with organizational objectives, compared with 14% of Followers. Leaders are also far more likely to run joint planning sessions with suppliers (94% vs 38%) and to link performance objectives and KPIs to SRM (94% vs 44%).
In governance, 88% of Leaders have treatment strategies for all supplier types, against 15% of Followers. All Leaders conduct contract document reviews at a set frequency, compared with 35% of Followers. However, the report finds only 59% have clearly defined two-way roles and responsibilities.
Value Tracking and Technology
All Leaders now capture or monitor financial benefits above contracted spend, up from 94% in 2025, and all report cost savings and avoidance as a benefit. Across the full sample, 49% of respondents do not know what financial benefit their supplier management program delivers, down from 57% in 2025, and 37% have no clearly defined annual targets.
On technology, 88% of Leaders cite supplier management oversight as a benefit of effective technology, up from 58%. More than half (56%) actively use AI for recommendations and decision support, and 76% plan to invest in technology for better visibility in the next 12 months. Only 20% of Leaders use dedicated supplier-governance and relationship-management technology.
Customer of Choice Is Not a Final Destination
The Collaboration findings show progress in joint working. Among Leaders, 53% have fully mapped their supply chain through multiple tiers, up from 39% in 2025, and 65% plan to improve supplier management through Joint Business Planning in the next 12 months.
Coverage remains limited. Only 41% of Leaders have Joint Business Plans covering between 75% and 100% of their key suppliers, while 42% of Followers have no joint account plan with key suppliers.
How organizations hear from suppliers is also shifting. Among Leaders, 47% use one-directional questionnaires, up from 19% in 2025. Across the sample, 51% of respondents still rely on ad hoc conversations and 23% gather no supplier feedback.
“Everyone wants supplier innovation, but we’re not talking about commitments,” Day said.
The 2025 research focused on becoming a Customer of Choice, and Day said the status has to be maintained once earned. “Customer of choice is not a final destination. Like every relationship, you have to work at it,” he said. “If you become a customer of choice, how do you maintain that? People think it’s a destination.”
What the Report Recommends
The report concludes that support for SRM “is not consistently matched by the ownership, capability, governance and technology needed to sustain it.” Its call to action asks organizations to find where SRM would fail without key individuals, conduct a Balance of Trade assessment of their own performance as a customer, give executive sponsors a practical role in decisions, and stop calling every important supplier strategic.
It also recommends creating a clear route from supplier ideas to a decision, proving that each priority relationship changed an outcome, and making fewer promises to suppliers and keeping them.
“We have spent a long time proving that supplier relationships matter. The job now is to make good supplier management part of how the organization operates, not something it has to remember to do,” Day writes.
