Procurement leaders are prioritizing lower material costs while facing simultaneous pressure to improve product quality and build more resilient supply chains, with 77% of U.S. procurement professionals citing cost reduction as a critical priority and many relying on fragmented manual processes that complicate balancing these competing demands.
- 77% of U.S. procurement professionals identified lowering direct material costs as a high or critical priority, the highest rate globally, while 68% face pressure to improve quality and accelerate launches
- Supply chain continuity remains the top priority overall with 72% of organizations citing it as essential, followed by supplier diversification at 64% in the U.S.
- Fragmented data management poses significant risks: 23% of organizations manage supplier data across multiple systems with manual reconciliation, 55% report spreadsheet reliance leaves them vulnerable to human error, and 43% admit they're one supplier failure away from crisis
- AI adoption is accelerating with mixed readiness: 76% of organizations use or experiment with AI in sourcing, with 89% finding it effective for supplier identification, yet 44% acknowledge their supply data isn't AI-ready
- Technology investment varies significantly by region: 72% of U.S. organizations invested in savings identification technology, nearly double the rates in Germany (39%) and France (38%)
New research from Ivalua shows that U.S. procurement leaders are placing greater emphasis on reducing direct material costs than their counterparts in Europe, even as pressures build to improve product quality and accelerate supplier diversification.
In fact, many organizations continue to rely on fragmented, manual sourcing processes that make it difficult to balance cost savings with product quality and long-term supply chain resilience.
“Procurement leaders are being asked to lower costs while improving quality, accelerating launches and building more resilient supply chains, all at the same time,” says Doug Keeley, director of product marketing at Ivalua. “Too many organizations are still relying on disconnected data and manual processes, which turns every sourcing decision into a tradeoff. Better supplier data and connected processes give procurement teams the visibility they need to collaborate earlier, solve problems together and uncover opportunities that simply aren’t visible when every decision starts and ends with cost.”
Key takeaways:
· Globally, 69% of procurement professionals say lowering direct material costs has been a high or critical priority over the past year, while nearly as many (68%) are under pressure to improve product quality and accelerate launches.
· Ensuring continuity of supply remains the top priority overall (72%).
· Among U.S. respondents, 77% identified lowering direct material costs as a high or critical priority over the past year, the highest of any country surveyed. At the same time, 64% cited supplier diversification as a key priority, compared with 51% in France, 47% in the United Kingdom and 43% in Germany.
· U.S. organizations also led all markets in prioritizing reducing tariff and trade-related costs (62%), highlighting the unique pressures facing procurement leaders as they navigate ongoing economic uncertainty and supply chain disruption.
· Nearly one-quarter (23%) of global organizations manage critical supplier data across multiple systems with manual reconciliation, or in spreadsheets, emails and documents. More than half (55%) say that reliance on spreadsheets for supplier risk leaves them exposed to human error, and 59% admit they're reacting to supplier risk events rather than preventing them. And nearly half (43%) say their organizations are one supplier failure away from a supply chain crisis.
- 76% are already using or experimenting with AI or generative AI in direct materials sourcing. Of those, 89% say AI has been effective at identifying and qualifying new suppliers. However, 44% admit their supply data isn't AI-ready.
- 59% of organizations have optimized specifications to lower component costs; 36% have switched to lower-cost suppliers.
- Of those that shifted to lower-cost components or specs, 43% still raised prices, 47% held them flat and only 10% lowered them.
- 72% of U.S. organizations have invested in technology to improve their ability to identify and realize savings, which is nearly double the rates reported in Germany (39%) and France (38%).
- More than half (53%) of organizations experienced delayed product launches over the past 12 months.
