Artificial Intelligence In B2B Procurement
The importance of procurement processes cannot be overstated in today’s rapidly evolving business landscape, high procurement costs means low margins and supply chain disruptions mean missed revenue.
Traditional procurement processes often create inefficiencies for organizations and make it challenging to keep up with the pace of modern business expectations.
This is where Artificial Intelligence comes into play. AI offers innovative solutions to streamline and enhance procurement processes, provides valuable data insights and even negotiates with vendors on lead-time and pricing.
Understanding AI in Procurement
Before diving into AI’s applications in procurement, let’s clarify what AI is. Artificial Intelligence refers to the development of computer systems that can perform tasks typically requiring human intelligence, such as problem-solving, language understanding, and decision-making. In B2B procurement, AI leverages machine learning, natural language processing, and other technologies to optimize various aspects of the procurement cycle.
AI Applications in B2B Procurement
The potential of AI can extend to various aspects of B2B procurement –
Supplier Selection: AI-driven supplier evaluation tools consider multiple factors, including price, quality, and past performance, to identify the most suitable suppliers. AI tools can also be integrated to search engines to identify the best supplier option that’s available for off-the-shelf components.
Contract Management: AI automates contract creation and management, ensuring compliance with terms and conditions, and providing alerts for renewal or renegotiation
Cost Optimization: AI identifies cost-saving opportunities by analyzing spending patterns and recommending cost-effective alternatives.
Negotiations: AI can negotiate. Sometimes even better than Supply Chain Managers. Walmart is using an AI centered negotiation bot that can negotiate 2,000 suppliers at the same time and saves 3% for the company on average.
Predictive Analytics: AI helps in predicting potential disruptions in the supply chain, allowing businesses to proactively address issues and minimize risks.
Descriptive Analytics: AI is able to analyze large sets of data and can provide insights and analysis of past purchasing.
Process Automation: Automated processes save time, allowing procurement professionals to focus on strategic activities.
Per our analysis AI will be an essential part of the supply chain and early adopters will have a competitive edge. Contact us to see how Procurable can help you transform your supply chain operations with Artificial Intelligence.