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How is machine learning affecting procurement?

Written by: CIPS Procurement & Supply Jobs
Published on: 14 May 2019

As a procurement professional, you’re always looking for ways to make your organisation more efficient and get the best value from suppliers. Computers and automation have played a large role in making other areas of the business more efficient. So, what about procurement?

Image of dial showing Manual processes and RPA

What technologies are currently affecting procurement?

Robotic process automation (RPA), machine learning, artificial intelligence (AI), analytics and big data are all types of technology that are starting to have an impact within the procurement profession.

RPA, machine learning and AI are all different types of technology which can help to automate some tasks and processes. Each does this in slightly different ways and with different levels of sophistication.

RPA systems can replicate manual processes automatically, in repeatable and reliable way. For example, an RPA system could open an email from a supplier, check they’ve attached the documents you asked for and, if the correct documents are there, add the supplier to a shortlist.

Machine learning describes the programming that enables computers to learn from statistical data or decisions you’ve made in the past. For example, if you usually put supplier A into category B, your computer can make an educated guess that you’ll do the same thing next time. It will then start to automatically put supplier A into category B for you.

Artificial intelligence and machine learning are often used interchangeably. This is partly because machine learning is a type of artificial intelligence, in the same way that a square is a type of shape. Because AI encompasses more “shapes”, it’s more sophisticated than machine learning alone. AI could help you to detect disruption in your supply chain, identify fraudulent activity or recognise compliance issues.

Big data and analytics are also having an impact within the industry. With more and more data becoming available, people are looking for ways to analyse that data and use those findings to make decisions.

How can machine learning and AI benefit procurement?

Automating the more simple and repetitive tasks and processes through machine learning and AI frees up time for procurement professionals to spend on higher-level and more complex tasks such as managing relationships with suppliers and stakeholders, and advising on procurement strategy.

These technologies can also bring benefits such as:

  • Greater supply chain transparency
  • More detailed and frequent spend analysis
  • Improved relationships with suppliers
  • Quicker and more nuanced responses to changes in the market

How will this impact procurement and supply chain professionals?

In other words, will RPA, machine learning and AI threaten your job? Fortunately, the answer here is no, it won’t. However, it’s a reasonable question to ask as automation can reduce the amount of human input required to complete some tasks. These new types of technology are designed to support rather than replace people.

Just like procurement and supply chain professionals have adapted to changes in the industry and new technologies in the past, you will need to learn and adjust to remain relevant and add value in the future.

As computers take over the simpler and more mundane tasks, you will be able to spend more time doing things like building and maintaining relationships with suppliers and other stakeholders.

Whilst analysis and big data help you to spot trends and patterns, your colleagues will rely on you to explain what these trends mean for procurement and the organisation as a whole. Analytics will provide real, data-driven evidence at your fingertips to inform and support the procurement strategies you create.

How can you prepare for the future of AI and machine learning?

Keeping an eye on the digital horizon will help you keep up-to-date with how these new technologies are being developed and used. CIPS Procurement & Supply can help you here, with articles containing practical advice from a fellow professional about how she is implementing technology in her own team.

You may need to learn some new skills or brush up on your digital skills so that you can help your organisation select the right technologies for them or get the best out of a system they’ve bought.

Furthermore, when you’re spending less of your time doing the simpler and more repetitive tasks, your interpersonal and communication skills will become more important. You’ll be the person who knows the people in your suppliers’ teams and can connect with them on a personal level. You’ll be the person helping other people in your business understand what the data is telling them and how they can use that information to make decisions.

Of course, as the world’s largest organisation dedicated to the procurement and supply chain profession, CIPS can help you to develop your skills. Why not start by having a look at some short courses like this one about communicating and influencing?

If you’re someone who is looking to recruit people with the right skills to support you with technological advances, CIPS Procurement & Supply Jobs can help you. As a specialist jobs site for procurement and supply chain professionals, CIPS Procurement & Supply Jobs is the best place to source the right candidates for you.

Visit the website now.