Artificial Intelligence (AI) has come a long way in a very short time and is now a $52.2 billion industry that has changed how many industries operate. It has improved logistics through automation, made maintenance cost-efficient through predictive maintenance technology, and has updated customer service through chatbots. Another area that AI is helping businesses is through increasing the effectiveness of their procurement processes.
AI software can help streamline a business’s procurement process by collecting, cleansing, classifying, and analyzing expenditure data to identify excessive costs. This can help get rid of a business’s duplicate suppliers, bad purchase deals, and suboptimal payment terms—all of which cost a significant amount of money. The AI system is able to process large transaction volumes that include standard repeated purchases. This reduces the chance of mistakes caused by one-off purchases, infrequently used suppliers, and procuring from different countries.
In terms of supplier risk identification, AI can be used to identify sudden changes, risks, and disruptions much faster than a regular employee. Spend Matters explains that artificial intelligence can be used to monitor millions of sources for new and emerging risks. Riskmethod’s Risk Intelligence is one of the top examples, as it allows businesses to keep track of all their suppliers’ risk factors in real time. Not only does AI prevent human error in the business that is using it, but it will also find errors made by their suppliers, therefore eliminating costly mistakes that are made in the procurement process.
AI also helps with warehouse management as it leverages pick density and carrier cut off times to meet orders. When it comes to monitoring equipment, AI can help predict the need for repairs before these repairs become shutdowns. The technology does this by reading wear and tear and error codes among other things. The global supply chain is constantly moving and any error or breakdown that could have been prevented costs for both the company and the customer.
Artificial intelligence along with the Internet of Things (IoT) can also make assets more visible and easier to track. A business’s procurement team can use machine learning to identify and fix any shipment and fleet management issue. Assets can be tracked and traced in real-time, wherever they are in the world, through remote sensors connected to the internet. This provides greater transparency in the supply chain, as both, the supplier and purchaser can identify where the package is and its current status.
This creates opportunities for algorithmic advancements that allow the detection of patterns and correlations during the delivery process, which would have been difficult, impossible, or too time-consuming for humans to sort through alone. Using algorithms, AI allows companies to track the packages and find any issues that could slow down the procurement process.
There’s no denying the fact that artificial intelligence has changed the way corporations do business, especially when it comes to closing transactions and getting products to consumers. TechRepublic reports that this has led to a significant increase in the demand for workers with AI expertise, with a 119% spike in the number of job postings. “As AI development and adoption continues to rise across industries, it is likely there will be more competition for this talent,” economist Daniel Culbertson said. This is being reflected in how the industry is growing – from a 20% job posting increase in 2016 and 2017 to a 31.6% increase in 2018. A feature by Maryville University on computer science graduates note how more than 1.25 million jobs will be available by 2026. This will be largely driven by the need for AI-related roles like machine learning engineers. The way in which software engineers and computer science graduates will need to adapt to new innovations is one of the best measures of how business is adapting to the digital-centric world.
The idea that artificial intelligence may soon be a part of every large-scale operation is now a reality. After all, we’re already seeing companies using other technological advances like the Cloud in their daily operations.
Other industries are going digital with data analytics and blockchain. It’s only a matter of time until we see artificial intelligence become the standard for a business’s procurement process.
Technology Feature composed by Ava Chalker for technologyconcepts.com