Automation : one answer to demands of supplier sourcing
DIGITAL PROCUREMENT
This approach combines data science with digital technologies to understand the business , make recommendations , take action , and learn from decisions and outcomes .
With AI and ML constantly analysing data , teams can consider more variables in purchasing and supply chain decisions than before . The system identifies patterns that people might miss , enabling teams to act quickly as market conditions shift .
Also , by capturing decisions and their outcomes , procurement teams can ( for instance ) better understand discrepancies between budgeted and actual spend . They can balance risk , cost , quality , and other factors whilst making sure that decisions and outcomes align with business objectives .
What benefits is automation bringing procurement ? With improved tools to analyse data , and digitise and automate decisions , procurement teams are identifying new opportunities for cost reduction and savings .
One of the best outcomes is improved communication , collaboration , and accountability , not just within the team but across the enterprise and its ecosystem of customers , suppliers , service providers , and partners .
To give one example , a global consumer packaged goods company is using decision intelligence to identify purchaseprice variance ( PPV ) in direct materials procurement . This allows the team to identify and correct issues with poor master
Automation : one answer to demands of supplier sourcing
By using a combination of mechanical models , software and hardware to analyse supplier bids and stakeholder scenarios , sourcing optimisation identifies ‘ optimal ’ sourcing decisions . This automation allows organisations to :
• Conduct exponentially larger and more frequent sourcing events across subcategories in areas like MRO , facilities management , and lab supplies
• Provide the transparency and visibility needed to make informed choices between competing stakeholder interests
• Source more categories including complex , strategic to the business , traditionally off limit categories , like management consulting services , legal , creative agencies and marketing
• Set and evaluate broader selection criteria such as incumbency , risk , performance , quality , capacity , and , of course , cost
• Identify the best outcome in minutes , not weeks Kristian O ’ Meara , VP of Strategic
Initiatives at JAGGAER , says of e-sourcing automation : “ Procurement teams are measured on their ability to continuously drive costs down or out , and increasingly are tasked with building supplier relationships that contribute to innovation and differentiation .
“ It ’ s a tall order , and it ’ s one that requires a more strategic sourcing model leveraging automation to maximise the power of people and process .”
82 August 2023