The next stage of transformation in modern enterprises is currently underway courtesy of machine learning and artificial intelligence. Robotic processes, automation, data digitisation and analysis are driving the change, transforming how employees and procurement consultants implement their expertise to achieve the goals of an organisation.
These “cognitive” technologies lie at the core of the new paradigm of procurement, i.e., cognitive procurement. Let’s take a look at how these self-learning technologies can fit into the existing supply chains and improve strategic sourcing, decision-making, and value creation.
An Overview Of Cognitive Procurement And Industry 4.0
Cognitive procurement, also called “intelligent procurement”, is essentially the use of disruptive technologies to improve the efficiency of existing systems. Being a very data-rich industry, procurement is well-seated to reap the maximum benefits of cognitive technologies. With a better view into the supply chain, procurement consultants can optimise various aspects of operations including sourcing raw materials, selecting suppliers, managing deliveries, etc.
The promise of these “disruptive technologies” lies in their potential to aid, replace, or even exceed human intelligence in the tasks assigned to it. As a result, these self-learning technologies can not only handle advanced tasks like processing large volumes of data but also repetitive tasks like data entry and approval with unmatched accuracy.
The incorporation of intelligent tools into production lines and supply chains means that every task assigned to it is completed faster and more accurately. Companies in Industry 4.0 rely on process automation and real-time data analysis to source better, report accurate, and increase the value by reducing waste and operational delays.
Tools In The Cognitive Procurement Kit
The revolutionary Blockchain technology has become one of the major threads in global B2B transactions. It refers to a decentralised ledger (a distributed database) that holds the tamper records of all digital transactions. Combined with its various applications, Blockchain holds the potential to disrupt the current and usher in a new era of supply chain management.
Industry 4.0 heavily depends on the integration with blockchain-based purchasing models that automatically provide a more secure method of transaction. From payments, audits, transaction history, and tracking inventory, Blockchain brings a new level of trust and transparency to the supply chains of tomorrow.
Process automation needs to work closely with data centralisation and artificial intelligence for modern systems to collect, store, analyse, and organise all the data required by your procurement consultants. With the help of these tools, they can optimise the workflows like order creation and approval, invoice processing etc.
Moreover, process automation presents the opportunity for more accurate supply chain analytics and vendor integration, allowing procurement professionals to rate suppliers based on their performance and make subsequent improvements based on the requirements of the organisation.
All the data flowing into your organisation from internal and external sources can be utilised to receive actionable insights and contextual suggestions. Procurement professionals can work closely with the organisations to make long-term sourcing decisions based on the current market data and historical vendor performance.
As a result, organisations can identify risks and build resilience into their supply chains. Potential problems can be identified and nipped early on to prevent major crises later. Data mining is extremely crucial in Industry 4.0 operations to make smarter decisions quickly.
Internet Of Things
When combined with cloud-computing technologies, the Internet of Things (IoT) devices adds valuable real-time data from various real-world sources. Procurement teams can use these IoT devices to collect better and actionable data and track materials, components, and finished goods in real-time to mitigate expensive supply chain disruptions.
IoT helps bridge the gap between the real and virtual world to create digital prototypes that monitor real-world activities for process improvement. It helps in strategic context-sensitive resupplying based on inventory availability and market conditions. In the distant future, expect virtual reality storefronts for global buyers, or virtual support portals for consumers.
In addition to process automation and cognitive technologies improving real-world processes, Industry 4.0 technologies can also be used to improve the consumer experience. With the help of advanced self-learning bots, businesses can interact with vendors, buyers, and consumers on a virtual storefront.
Since all the data will be available in a connected datasphere, chatbots can use previous conversations to provide contextual answers, suggest products and courses of action, or even accept new orders, make changes to existing orders, or facilitate returns.
Cognitive Technologies Shaping The Future
When applied correctly, cognitive procurement has the potential to transform the way procurement consultants take business decisions forever. From hands-free purchases to data mining using predictive analytics, procurement teams for various industries will be among the first to reap the benefits of cognitive procurement and attain a sustainable competitive advantage in the market.