A technology expert has urged procurement practitioners to acquire knowledge in Artificial Intelligence (AI) which, he believes, is poised to achieve a never-before-seen form of procurement transformation.
Tech aficionado, Michael Higgins, a member of Forbes Magazine’s Technology Council, pinpoints the feats that AI can accomplish, freeing practitioners to concentrate on more human endeavours, such as ethical supplier relationship management and collaborating with colleagues.
The procurement areas Higgins believes AI is already transforming include:
AI dwarfs human computational powers with an ability to analyse billions of data points in seconds, and then present solutions based on accurately evaluated risks.
Already, it meticulously tracks supplier performance and presents recommendations rooted in data relating to supplier reliability, stability, and other forecastable factors.
Soon, it will also be able to analyse weather patterns, determining the optimal, safest delivery methods and routes, locate new sources when current ones are disrupted by unforeseen political or natural events, measure the rate of raw material depletion to forecast the future viability of manufacturing in specific locales, and survey local and global politics to flag-up potential cost rises.
The age of ‘Cognitive AI Procurement’ is dawning.
AI can track assets in transit in real-time and, in the event of severe conditions such as hurricanes or other disruptions, can plot the fastest and safest new routes in real-time after assessing every detail, including evacuation routes that can bring traffic to a halt.
Spend analytics for spend optimisation and cost reduction
AI can analyse hundreds of thousands of items purchased by a company in seconds, identifying and comparing different unit rates charged by different vendors for the same products.
It facilitates the crafting of new optimal agreements with key suppliers to maximise cost reduction.
AI also delivers a complete overhaul on the fraught issue of tail spend management. This happens by pulling together all the data from millions of items in short and long-term orders, freeing humans to do more important and fulfilling work.