Procurement teams are quickly turning to artificial intelligence for both creative problem solving and time consuming tasks. Popular AI chatbots, especially ChatGPT 4 and Gemini Advanced, are swiftly proving to be transformative assets for procurement teams, playing the role of both a knowledgeable industry veteran acting as a business coach and a novice intern acting as an assistant that effortlessly completes routine tasks.
In APD’s blog post, Exploring Generative AI for Procurement, we delved into various articles that shed light on the practical applications of AI chatbots for common purchasing and supply chain activities. We identified nine articles that explore artificial intelligence use cases for procurement teams, this article provides specific example for each of the areas.
Optimizing Procurement with AI Chatbots
Picture the AI chatbot as a dual-function resource: on one hand, an eager intern ready to quickly turn around laborious tasks; on the other, a seasoned coach full of actionable advice.
Leveraging the Eager Intern
For routine tasks, this digital ally requires clear, concise instructions akin to those you'd provide to a novice intern, ensuring tasks are approached with clarity and purpose. For instance, engaging a chatbot to condense supplier-related documentation from your company's portal requites a few preparatory steps:
An AI chatbot can complete these steps for many documents in just a few minutes, but just as you would if you were relying on an intern, you’ll need to verify the results to ensure comprehensiveness and accuracy. Keep in mind that uploading documents will require a subscription to ChatGPT 4 or Google One, as the complimentary versions ChatGPT, Gemini, and Copilot do not offer document upload capabilities.
Leveraging the Seasoned Coach
Accessing the chatbot's advisory capacity introduces a different dynamic. When faced with unfamiliar scenarios or seeking advice for comprehensive planning, the chatbot's guidance can be invaluable. By supplying relevant context and specific queries, you can extract tailored advice. For example, in preparing for negotiations with a supplier from a foreign country, the chatbot can furnish insights into cultural norms and alignment strategies.
Consider this query for practical application: "As a buyer gearing up for negotiations with a Portuguese supplier, identify common cultural practices among Portuguese business professionals. Present these findings in a tabular format, accompanied by recommendations for harmonizing with these cultural practices."
The artificial intelligence will scour it’s training data (slightly dated but appropriate for this application) and provide advice on aligning with cultural norms relating to are such as:
Example Purchasing Tasks for Leveraging AI Chatbots
While working to develop an online course for purchasing teams to quickly learn to use AI chatbots to boost productivity, we’ve cataloged over 150 specific examples and verified prompts for typical purchasing tasks. Below are a few example tasks to illustrate the impressive ability of artificial intelligence to boost purchasing productivity. Learn more about the course here.
| Area | Example Tasks |
|---|---|
| Supplier Management | Identify suppliers who have not met quality performance as agreed |
| Create a table showing specified characteristics for a set of suppliers | |
| Strategy Development | Understand the latest technological innovations in the materials you buy |
| Include scenario planning in your commodity strategy | |
| Sourcing | Quickly identify alternative suppliers for a key material |
| Evaluate quotes received from suppliers and recommend sourcing | |
| Risk Management | Identify recent articles that detail potential supply chain issues for a specific commodity and region |
| Research potential industry disruptions for a commodity you buy | |
| Operational Procurement | Generate a series of P.O.s based on a reorder request that lacks details |
| Review request and approve requisitions | |
| Negotiation | Understand the products and services offered by competitors of a current supplier |
| Prepare a list of answers to likely questions from a supplier prior to a negotiation | |
| Communication | Extract key points from a lengthy letter or email from a supplier |
| You need to email a supplier to resolve a disagreement. | |
| Spend Analysis | Analyze historical spend data before conducting a multi-site market test |
| You want to quickly track rogue spend by location | |
| Contract Management | Develop strategies for negotiating more beneficial terms to a supplier’s proposal |
| Quickly identify specific areas to negotiate improvements to a supplier’s proposal |
Want to learn more about using Artificial Intelligence to boost purchasing productivity? Watch APD’s free 30-minute webinar “Supercharging Purchasing Productivity with AI”. Click here to access.
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