Sourcing risk and costStrategic Sourcing: Leverage AI to Mitigate Risk and Cut Costs (quote spotlight)

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Sourcing risk and costHow can strategic sourcing professionals lower risk and cost in these uncertain times? This new paper by Procurement Leaders points to the potential of AI in a marketplace, and quotes Tech-Clarity’s Julie Fraser.

Please enjoy the summary* below. For the full research, please visit Procurement Leaders (registration required).

Materials price increases and supplier risk have not abated since the start of the COVID-19 pandemic. Traditional procurement automation systems do not address those issues effectively. Thus, companies must find new ways to combat what appears to be a permanent situation. 

“Flipping the pyramid” to use mostly external data and combine internal data with it may hold the key. Marketplaces are once again taking the stage, and with advanced analytics behind them, the benefits are significant. This paper has a concrete example from Bose. 

Electronics is an example of an industry where many suppliers and parts are used by a multitude of companies, and available both direct from the manufacturer and from distributors. This makes it ideal for such a marketplace approach.

Fraser points out that near real-time data about supply and logistics from outside still needs a way to get into context with internal data for analytics to perform. If a platform allows that, it can truly push out insights that lead to decisions for how to improve costs and reduce risk.

Read the report to learn more. Thanks, Malcolm Wheatley for the opportunity to share our point of view along with many luminaries.

For related research with Julie Fraser, please read Procurement automation: advancing to the future.