Procurement and Supply Chain Planning: Two Functions, One Problem

This article is derived from our newest SRM White Paper, "One Platform, One Vision - The Benefits of a Unified AI-Driven Supply Chain Planning & Procurement Decision-Making Platform".

Ask a procurement leader and a supply chain planner about their biggest priorities, and you’ll likely hear two very different answers. Procurement teams are focused on securing supplier agreements, managing costs, and mitigating risks. Planners, meanwhile, are looking ahead—adjusting to demand shifts, balancing inventories, and keeping production on track.

Both are critical. Both should be working toward the same goal. And yet, in many companies, they still operate as if they belong to separate worlds.

This disconnect isn’t new, but in 2025, it’s becoming too costly to ignore. Supply chains are more volatile than ever. Supplier instability, shifting trade policies, and rising costs have made real-time coordination between procurement and planning essential. The old way—where procurement locks in contracts without visibility into real-time demand, and planners scramble to adjust without supplier input—isn’t sustainable anymore.

Some companies are already addressing this. They’ve moved procurement and planning onto a single platform, aligning decision-making instead of working in silos. Others are still stuck with outdated workflows, fragmented data, and slow, disconnected decision-making—and they’re paying the price.

Why Procurement and Planning Are Still Out of Sync

The separation of procurement and supply chain planning has deep roots. Traditionally, procurement optimized for cost and supplier contracts, while planning focused on inventory, logistics, and production efficiency. The two functions developed their own KPIs, tools, and workflows—often with little overlap.

That wasn’t a major issue when supply chains were more predictable. But today, misalignment leads to real financial losses.

• Procurement might secure a low-cost supplier, but if that supplier has long lead times or limited flexibility, it could disrupt production when demand shifts.
• Planners might adjust forecasts based on real-time demand signals, but if procurement isn’t in the loop, they may be stuck with locked-in supplier contracts that don’t fit actual needs.
• When risks emerge—whether from geopolitical events, material shortages, or extreme weather—teams waste critical time trying to align information before acting.

Instead of working as a cohesive unit, procurement and planning often struggle to coordinate. And when coordination fails, companies end up with higher costs, supplier bottlenecks, and missed opportunities.

The Shift Toward Integration

Some companies—Toyota, Apple, and Walmart among them—have already recognized that procurement and supply chain planning need to operate as one function, not two disconnected ones.

Here’s what changes when they do:

• Procurement knows what planners need—before contracts are signed. Instead of chasing the lowest cost, procurement teams factor in demand shifts, supplier risks, and operational constraints—leading to better supplier agreements.
• Planners get real-time visibility into supplier limitations. They know which suppliers are at risk, what alternative options exist, and whether procurement can negotiate better terms to meet fluctuating demand.
• Faster decisions, fewer surprises. A single platform means no more scrambling for updates or reconciling mismatched data. Instead, teams work from the same set of real-time insights.
• Cost efficiency without operational trade-offs. Instead of cutting costs in ways that hurt supply chain resilience, procurement and planning align on strategies that reduce costs while keeping operations flexible.

Toyota, for example, has long integrated procurement and planning KPIs to ensure cost savings don’t come at the expense of supply chain resilience. Apple’s centralized procurement and planning strategy allows it to pivot quickly in response to supply constraints. Walmart has tied supplier performance directly to inventory strategies, ensuring availability without unnecessary stockpiles.

Companies that fail to make this shift? They’ll be the ones still struggling with supplier bottlenecks, cost overruns, and slow responses while their competitors move ahead.

Why Technology Alone Won’t Fix the Problem

Recognizing the need for better procurement-planning alignment is one thing. Actually fixing it? That’s where companies can come undone.

Many organizations try to connect their existing procurement and planning tools—linking supplier databases with forecasting platforms, layering on dashboards, or automating data transfers. But this approach only patches the problem—it doesn’t solve it.

Procurement and planning systems were built for different purposes, with different data models, different workflows, and different optimization logic. Simply integrating them after the fact doesn’t create a shared source of truth.

What actually works, you might ask?

• One platform, one data model. Procurement and planning teams work from the same data set, eliminating mismatches and miscommunication.
• AI-driven insights. Instead of reacting to disruptions, teams see risks in advance and adjust procurement and planning decisions proactively.
• Seamless collaboration. No more static reports or back-and-forth emails. Teams work within the same system, in real time.

Technology is the enabler, but real change depends on how companies use it.

The Bigger Challenge: Changing How Teams Work

Even with the right platform, companies won’t see real benefits unless they change how procurement and planning collaborate.

• KPIs need to align. Procurement can’t be rewarded solely for cutting costs if it leads to stockouts or supply chain instability. Companies that succeed tie procurement metrics to broader supply chain outcomes—such as total landed cost or overall service levels.
• Cross-functional workflows matter. Procurement and planning need more than a shared platform—they need shared decision-making processes.
• Executive sponsorship is critical. If leadership doesn’t push for alignment, old habits will persist. Companies that integrate procurement and planning from the C-suite down see real transformation.

The companies that fail to make these changes are those that will keep firefighting supply chain problems instead of preventing them.

The Future of Procurement and Planning: One System, One Strategy

Here’s what it boils down to: keeping procurement and planning in separate silos is no longer an option.

Organizations that move to an integrated, AI-powered platform—where procurement and planning work from the same data, with shared KPIs and workflows—will gain the agility, resilience, and cost efficiency needed to compete in a volatile market. Those that don’t? They’ll be slower to respond, less cost-efficient, and more vulnerable to supply chain disruptions.

This isn’t just about fixing inefficiencies—it’s about securing a competitive advantage. The companies that integrate procurement and planning today will set the standard for the next era of supply chain leadership.

o9 Achieves Catena-X Demand and Capacity Management Certification, the Automotive Industry’s First Open and Collaborative Data Ecosystem

The Certification Marks o9’s Position as a Frontrunner and Trusted Provider of Interoperable and Secure Solutions for the Automotive Value Chain

Read the full press release