#AI Technology Supplychain ProcurementAnalytics

[odesmauk-blog]

Experts predict AI-powered procurement analytics will be indispensable

A procurement transformation specialist has suggested that nextgen procurement analytics will become indispensable to businesses to improve their supply chains within 5 years.

Rob Handfield, Professor of Supply Chain Management at North Carolina State University, agreed in an interview recently that procurement analytics was still at a “nascent” stage.

However, he was confident that artificial intelligence (AI) will play a key role in the very near future. Procurement analytics will shortly be able to incorporate and implement a host of next-generation supply chain technologies, including cognitive analytics, cloud, big data and mobile tech. But currently, the focus was on building the foundation for procurement analytics and data.

This involes creating trusted, heavily protected databases, similar to cloud-based “data lakes” protected by an arsenal of rules. Strict governance regulates who will be able to access and pull out data, and forms the bottom layer of the three-level procurement analytics pyramid currently under construction.

The top layer is the business intelligence tier, where AI enters the process to analyse huge streams of data entering the ‘data lake’. At the top is business analytics, using the output from the organisations intelligence layer to assess supply and demand trends and gain new insights into future supplier relationships and sourcing requirements.

Currently, procurement analytics is concentrated on five key areas: sourcing at the base, spend analytics, 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.

Handfield predicts that within 5 years, leading businesses will have created centres of excellence to pilot AI-informed procurement analytics.

He finished by stating: “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.”