52% of Purchasing Managers list savings as the main performance indicator for their teams *
Even if we are increasingly looking for improved performance indicators, savings remain an essential KPI in a company's overall cost strategy. The hunt for useless expenses is the main challenge for the purchasing team, always looking for a way to improve savings in processes, negotiations, indirect purchases, etc.
► To which extent will new technologies related to machine learning and AI impact this goal? What are the practical solutions?
AI to improve supplier risk monitoring.
Suppliers are the primary contacts for the purchasing department. It is with them that a long-term relationship of trust must be created, while at the same time taking advantage of competition and deadlines. AI will put analytical power at the service of the relationship by helping determine whether the supplier will be able to fulfil its order or not. And if there is any reason to be concerned about quality by cross-checking with external sources of information, or if there is an inconsistency between the company's CSR commitment and a change in the production line.
Thanks to AI, it is also possible to identify potential fraudulent invoices, greatly reducing the duration of a malfunction.
AI to improve supplier risk monitoring.
"AI provides between 5% to 40% additional savings through spend and supplier pool analysis.“
"AI provides between 5% to 40% additional savings through spend and supplier pool analysis.“ says Xavier Laurent, former Manutan IT Director. Using reconciliation and prediction algorithms can help buyers' decision making by securing and streamlining expenses.
How does this work? AI will help identify the most important areas for optimisation, as it is able to help classify very diverse information from unstructured data, such as PDFs for example.
The time saved is considerable, with an additional 5% to 40% savings due to these refined analyses!
AI for instant purchase information
It should be known that 53% of purchasing managers identify better data accessibility, coupled with analytical capabilities, as the first driver for improving their performance. Launching an AI project always involves prior work on the data: scrubbing, structuring...
The data is therefore better managed, and more accessible thanks to the instantaneous computing power of AI! At Technicolor, Cédric Le Savéant VP, Digital Office - Sourcing & Supply Chain Transformation has set up a data-assistant in the Purchasing department to answer questions from operational staff about supplier expenditure. For him, the interest was " the immediate, precise and simple nature of a 24/7 response”.
Based on a part of AI called NLP, (Natural Language Processing) this assistant generates complex queries on the go that would take hours for teams.
Many opportunities exist: immediacy, analysis capacity, risk prediction... Now it is time to see if the companies specialised on the purchasing software market will quickly integrate this kind of innovation into their product or if new competitors will come and change the rules!
