Procurement leaders in 2025 are never further than a stone’s throw away from major disruptors.
Inflation.
Tariffs.
Supply chain bottlenecks.
Geopolitical risks.
(You get the idea).
These challenges are actively reshaping priorities for Chief Procurement Officers (CPOs)—most probably don’t recognize the goals and plans they set even a few months ago; that’s how quickly things are changing.
To navigate this dynamic environment successfully, CPOs must empower their teams to harness the power of strategic negotiation—transforming potential crises into opportunities for resilience and innovation.
WHAT BUSINESS DISRUPTION LOOKS LIKE IN PROCUREMENT TODAY
At its core, disruption management is about adapting quickly when external or internal events, like inflation, tariffs, or natural disasters, throw procurement strategies off course.
It’s the art of recovering from chaos while minimizing damage.
And in 2025, CPOs are getting really good at it.
Many leaders face immense challenges keeping their operations running on course, like skyrocketing costs, material shortages, delayed shipments, or sudden supplier insolvencies.
The truth is, no industry is immune.
A Chief Executive study polled manufacturers in January, and 84% planned to increase their prices. Well, with all the tariff conversations, they decided to repoll those same manufacturing companies in March, and 91% said they would raise prices—an 8% increase in just a couple of months. Most companies planned to raise rates by up to 4.9%.
The same study also found that three-quarters of manufacturing companies reported that their suppliers have informed them about a price increase for this year.
Manufacturing isn’t the only industry scrambling.
For example, aerospace faces severe bottlenecks due to the limited availability of critical components, impacting production schedules and supplier relationships.
Given the sweeping tariff actions in the U.S., many industries, like construction, steel, agriculture, auto, and more, will face a similar price-hiking fate.
What does this mean for CPOs and their teams?
Procurement’s old playbook—focused on cost-cutting and transactional relationships—is no match for today’s volatility. These strategies lack the flexibility to handle dynamic disruptions.
Instead, procurement leaders must pivot toward proactive approaches like strategic negotiation and supplier collaboration to build resilience and adaptability.
HOW CPOS CAN USE NEGOTIATION TO MANAGE DISRUPTIONS
Unfortunately, business disruptions like the ones we discussed above are the “new normal” for Chief Procurement Officers (CPOs).
If procurement leadership has to contend with constant market changes, challenging supplier relationships, and digital transformation requirements, they’ll need an agile team with the skills, resources, and frameworks to get the job done.
That starts with negotiation.
No matter what’s going on in the marketplace, the tenets of strategic negotiation will provide the foundation your team needs to create resilient supplier relationships, bring strategic business value, and secure (much-needed) cost savings.
Here are five ways negotiation can help your procurement team in any climate.
1. UNLOCK GREATER VALUE IN EVERY DEAL
Negotiation isn’t just about getting the lowest price—it’s about creating value that benefits both your organization and its suppliers.
For example, that might look like flexibility in contracts. Skilled negotiators secure terms that adapt to volatility, such as inflation adjustments or dynamic delivery schedules. This ensures your business stays agile, even in uncertain markets.
It can also help you with supplier innovation—a mainstay in a volatile market. By fostering open dialogue, procurement teams can tap into supplier expertise to co-create solutions that reduce costs or improve quality without compromising timelines.
When negotiation is approached strategically, it shifts from a transactional exercise to a value-driven partnership.
2. BUILD STRONGER SUPPLIER RELATIONSHIPS
Strong supplier relationships are the bedrock of effective procurement—and negotiation is the foundation for building them. A collaborative approach fosters trust and ensures suppliers prioritize your needs during crises.
Consider this:
- Suppliers are more likely to offer favorable terms, such as extended payment periods or expedited delivery, when they see your organization as a reliable partner.
- Long-term partnerships reduce risks like supplier insolvency or quality lapses, ensuring continuity even during disruptions.
CPOs who empower their teams to negotiate with a balance of firmness and collaboration set the stage for resilience and mutual success.
3. FUTURE-PROOF CONTRACTS
In today’s unpredictable environment, contracts must be designed with flexibility in mind. Strategic negotiation allows procurement teams to incorporate clauses that safeguard against future disruptions with strategies like:
- Inflation Adjustments: Protect margins by linking pricing to market indices.
- Force Majeure Clauses: Mitigate risks from geopolitical tensions or natural disasters by clearly defining contingencies.
- Supply Chain Delays: Negotiate penalties or alternative solutions to minimize downtime when disruptions occur.
By embedding these safeguards into agreements, CPOs ensure their teams are prepared for whatever challenges lie ahead.
4. MANAGE INFLATION
Inflation continues to be one of the most pressing challenges for procurement teams, putting relentless pressure on budgets and margins.
Strategic negotiation offers two key pathways to manage these cost surges effectively:
- Cost-Sharing Mechanisms: Renegotiating pricing terms to include cost-sharing agreements can help distribute the financial burden of rising costs between your organization and suppliers. This approach protects your bottom line and strengthens supplier relationships by demonstrating fairness and collaboration.
- Long-Term Agreements: Securing multi-year contracts with fixed or indexed pricing can stabilize costs over time, providing predictability in an unpredictable market. These agreements are particularly valuable in industries where price volatility is a constant threat, offering both parties a sense of security.
By leveraging these tactics, procurement teams can mitigate the impact of inflation while maintaining strong supplier partnerships.
5. ACHIEVE SUPPLY CHAIN RESILIENCE
Building resilience into your supply chain is non-negotiable.
Negotiation plays a pivotal role in ensuring your operations can withstand disruptions without grinding to a halt.
First, it supports supplier diversification. Negotiating with multiple suppliers or sourcing from different regions reduces dependency on any single vendor or geography. This strategy minimizes risk and ensures continuity even if one supplier faces delays or disruptions.
Negotiation could also provide flexibility in delivery and inventory management. Embedding flexible terms into contracts, such as adjustable delivery schedules or buffer inventory agreements, allows your business to adapt quickly when supply chain bottlenecks arise.
These clauses provide breathing room to navigate unexpected challenges without jeopardizing production timelines or customer commitments.
For CPOs, investing in training for their top performers will be vital as we get deeper into 2025. Doing so equips procurement professionals with advanced negotiation skills to handle complex scenarios confidently and consistently.
Gartner’s 2025 Trends for Chief Procurement Officers report urges leaders to close critical skill gaps and invest in the right training for their people to succeed in the future.
A skill that will never go out of style?
Negotiation.
THE ROLE OF TECHNOLOGY IN DISRUPTION MANAGEMENT
In addition to foundational skills like negotiation, Chief Procurement Officers (CPOs) must embrace emerging technologies to navigate the complexities of disruption management effectively.
The most transformative tool? Artificial intelligence (AI).
Despite its potential, many procurement teams are struggling to unlock AI’s full value. According to Gartner, 74% of procurement leaders say their data isn’t AI-ready, limiting its ability to improve efficiencies and cost savings. This highlights a critical gap that CPOs must address to stay competitive.
Believe it or not, but AI can help procurement teams prepare for negotiations and manage risk. These tools:
- Streamline Data Analysis: AI synthesizes vast amounts of market data, supplier performance metrics, and pricing trends, enabling teams to walk into negotiations armed with actionable insights.
- Identify Emerging Risks: Predictive analytics continuously monitors supplier networks for vulnerabilities—such as financial instability or geopolitical threats—allowing CPOs to act proactively before disruptions escalate.
By automating time-consuming tasks, AI frees procurement professionals to focus on strategy and relationship-building, ensuring they can tackle complex challenges with precision.
While AI is a powerful enabler, it doesn’t replace human negotiation skills. Technology can provide the data-driven insights needed for smarter decision-making, but it’s the human element that drives creativity, builds trust with suppliers, and secures value-based agreements.
As RED BEAR’s Mike Slomke explains: “Technology’s role is to supplement—not supplant—the underlying business process. When combined with advanced negotiation skills, it accelerates outcomes without compromising quality.”
For CPOs looking to future-proof their departments, integrating AI and predictive analytics is essential—but only when paired with skilled negotiators who can turn insights into action.
MANAGE DISRUPTIONS WITH CONFIDENCE
Disruptions are here to stay.
But don’t fret; while challenging, they also present opportunities for procurement leaders to innovate, build resilience, and create lasting value.
By mastering negotiation now, CPOs can future-proof their teams, turning volatility into a competitive advantage.
The key is proactive preparation—investing in negotiation training ensures your team is equipped to navigate tomorrow’s challenges with confidence and agility.
Ready to lead through disruption? Start with negotiation.
Contact us to learn more.
