A supply chain management and procurement transformation specialist has suggested that nextgen procurement analytics will become indispensable to organisations to improve their supply chains within five years.
Rob Handfield, Professor of Supply Chain Management at North Carolina State University, conceded in an interview that procurement analytics was still at a “nascent” stage of development.
However, he was confident that artificial intelligence (AI) will play a major role in the near future. Procurement analytics will shortly be able to integrate and deploy a raft of next-generation supply chain technologies, including cognitive analytics, cloud, big data and mobile tech. But at present, the focus was on building the foundation for procurement analytics: data.
That entailed creating trusted, heavily protected databases, which he likened to cloud-based “data lakes” guarded by an armoury of rules. Strict governance determines who will be able to go fishing in these lakes and pull out data, and forms the bottom layer of the three-level procurement analytics pyramid which is currently under construction.
Above the base is the business intelligence tier, where AI enters the process to analyse huge streams of data entering the data lake. At the apex is business analytics, using the output from the business intelligence layer to evaluate supply and demand trends to gain new insights into future supplier relationships and sourcing obligations.
Currently, Handfield explained, procurement analytics is focused on five areas: simple sourcing at the base, followed by spend analytics, then contract management and risk exposure (right down to raw materials on a country-by-country basis – e.g. how a natural disaster might impact the supply chain) and finally, corporate strategy.
Within five years, leading organisations, he predicted, will have created centres of excellence to pilot AI-informed procurement analytics.
He concluded: “Once people start to get a sense of how much their supply chains can be helped with procurement analytics, they will demand more of it. Real-time data will be our new fingerprints in the supply chain.”
Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.