AI IN PROCUREMENT
The visibility gap The need for visibility is vital, as GEP says that most risks arise from a lack of visibility into supply chain operations, especially beyond tier 1 suppliers.
GEP says that 70 % of procurement leaders’ responses cite insufficient visibility into tier 3 suppliers as the primary cause of supply chain risks. Around 40 % of respondents say the same thing about their tier 2 suppliers.
To understand where these risks originate, procurement must have end-to-end visibility of the supply chain.
Leadership teams are not allocating resources to Gen AI for innovation’ s sake or visualisation tools. They demand tangible financial results that connect directly to profit and loss statements. Solutions unable to show quantifiable cost reductions, revenue safeguarding or expansion will face difficulty securing board-level approval.
For procurement and supply chain executives, the AI business case must centre on financial justification. Accelerated insights hold value only when they simultaneously avert losses, preserve margins and facilitate expansion. Establishing a direct connection between risk intelligence and return on investment will prove essential for CFO buy-in and executive backing.
“ Our suppliers play a critical role in the development and effectiveness of our AI supply chain tools,” adds Jeff.
“ We have deployed comprehensive training and tools to support them as they map the entirety of their value chains.
TOP BENEFITS OF AI-GENERATED SUPPLIER RISK SUMMARIES
According to the Sphera survey of 200 CPOs and CSCOs:
Fast operational decisions:
31 %
Faster strategic decisions:
29 %
Speed / accuracy in under 60 seconds:
24 %
“ This two-way communication allows us to act quickly in support of our suppliers when issues arise. Because in the end, our supplier partners benefit from these tools as much as we do.
“ So instead of solving a jigsaw puzzle in the dark on a bouncing train, AI is helping our supply chain team at GM illuminate the path ahead and build a stronger business for our customers.”
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