Envisioning the future of industry with future of technologies: Part 4- Digital procurement
Sourcing and procurement is a good space to leverage intelligent automation. Strategic sourcing involves a lot of strategic data based logical reasoning and decision models and hence a ideal candidate for AI enabled analytics and automation. Meanwhile purchasing involved repetitive transactions and a potential candidate for rule based robotic process automation
Having been a procurement advisor for a good decade and half, inspiring clients on potential competitive advantage with strategic sourcing led cost reductions, I understand very well the difficulty for an enterprise buyer to tag a correct buying price for all varieties of complex multi technology manufactured products, every little insights into actual seller cost model can be a big boon in negotiating the right price. In today’s world, most components that make the final product are global bought out’s, making the buyer role all the more strategic. An old Source to Pay (S2P) transformation business case goes like this…5% reduction is costs of goods can improve profitability of the firm by 30%, equivalent margins generated by almost impossible 60% growth in revenue for a typical manufacturing firm.
Digital procurement can make a big impact for the buyer and the enterprise. Let’s envision a few scenarios or use cases for tomorrow’s buyer
- A sourcing work bench bringing in the power of math and advanced technologies for all the required sourcing intelligence and predictive modelling for these complex negotiation decisions, should cost analytics , spend analytics , total cost of ownership models , Inflation impact and pricing modelling, cost reduction opportunity identification, bid management and negotiation response , supplier capacity and performance relations to sourcing decisions – (New Technologies – command centers , advanced analytics , Machine learning and AI )
- Omni channel sourcing for the buyer on the move, B2C catalog based ecommerce buying experience extended to B2B buyers for supplier discovery, product evaluation, RFP, Bid rating , quote management , contracting terms and conditions , delivery plan communications and receipt confirmation – all paperless and swipe and select operations than call and email based processes – (New technologies – B2B Ecommerce , Mobile or TAB based cloud solutions , wearable’s , gamification, VR)
- Intelligent supplier management – supplier discovery , researching, selection , harmonized policies, supplier onboarding & self-help , supplier credit risk analysis and development by-passing third parties and agents – ( New technologies – Private marketplaces, PAAS , Chatbots, AI based intelligent automation )
- Collaboration design & development – crowd sourcing ideas both internal ( for cross functional bid management and or problem solving ) and with the external community ( for supply market developments , new supplier recommendation , expert feed , whistle blower – ( New technologies – Social media forums like Twitter , Linked In , Yammer , Slack )
- Intelligent process automation for indent requisition, order management, expediting , delivery sequencing, dispatch confirmation and receipts , batch management , performance management – ( New technologies – Robotic process automation & learning engines, Mobile CPFR, Geo fencing, Block chain )
Buying could be a vastly different and interesting data science strategic profession with digital
