Streamline Automotive Purchasing Processes with AI
Automotive purchasing has been a hot topic in recent years. With the pandemic, global economy, and inflation shaking up the industry, reliable suppliers have become a major issue for companies involved in heavy industry procurement.
Luckily, Artificial Intelligence (AI) solutions can help make automotive purchasing more reliable, by:
- Streamlining purchase orders
Decreasing the oversight and time spent in workflows to manually review and verify mundane details in purchase orders and verify their accuracy.
- Predicting trustworthy suppliers
Empowering embedded platforms, like Arkestro, to predict which suppliers and prices are the best for specific purchase orders while circumventing time-consuming approval processes.
- Streamlining purchase orders
Automotive Purchasing, Meet Automation
Introducing automation into the automotive purchasing process with AI can streamline processes and reduce errors while saving time and improving accuracy. Automation helps remove much of the manual work with “cutting POs” like data entry, document management, and approvals.
In the whitepaper, Making Supply Chains More Predictable, Melissa Drew, the Associate Partner of Finance & Supply Chain Transformation at IBM, states:
“I don’t need my procurement person to go in and manually create [a purchase order] and then route it to the business stakeholder. The system should automatically create that.”
Machine learning-based solutions in Arkestro’s predictive procurement software ingest information to reveal insights that drive action for optimal results. These technologies streamline purchasing related workflows by sifting through enough data to simulate the creation of PO’s based on routine purchases.
The first step of predictive software is to collect data from across your organization. The software then ingests the data so that it can determine routine purchases.
Predictive analytics drill down into specific areas of spend to identify any anomalies or discrepancies in pricing or product quality. It can monitor cost trends in order to quickly identify possible areas where savings can be gained.
You will also gain better control over budgets and improved visibility into spending across departments. Giving you real-time insights into how your organization is spending its money.
The best part is – saying goodbye to manual purchase order tasks!
The Weaponization of Supply Chains
The automotive industry has long been reliant on a reactive approach to purchasing and supply chains. Rather than being proactive and looking ahead to potential problems, companies have reacted to whatever issue arises at the moment.
This way of thinking has led to a number of problems including the weaponization of supply chains. A crisis like COVID, helped reveal how little purchasers know and can rely on their suppliers.
Chief Strategy Officer at Arkestro, Edmund Zagorin, explains:
“COVID supply chain problems are forcing automotive and heavy industry purchasers to reinforce the reliability of their suppliers with actionable intelligence.”
For all the bad it did, only a global crisis like COVID could have put into perspective the scope of data necessary to build systems that truly understand spend data – something that was recently difficult to procure.
AI Can Help You Avoid Supply Delays
Artificial Intelligence can be used to help with automotive purchasing by predicting reliable suppliers based on intent scores. This is done by training an AI model on past experience and reputation data gathered from public sources.
The intent score measures how likely a supplier is to offer quality goods or services that meet customer needs. It also helps you to find the best options if your preferred suppliers are unavailable.
AI-driven platforms armed with models trained on information from across an organization’s tech stack can reduce the time spent on oversight and verification. This saves both time and money while still ensuring quality results.
You’ll also benefit from understanding why a supplier is predicted to be more reliable than another.
Investing in the Right Technology to Make Life Easier
Machine learning and AI are key aspects of any successful procurement strategy. By using these technologies, automotive organizations can reduce issues while still holding a high level of quality control over their purchases.
Zagorin adds that AI makes it easier for CPOs and CFOs to manage their procurement processes by “cutting through a vast, complex network, [to] get the right price with the right supplier, not going through a whole long approval process. And [you] do it at that moment when the order is placed.”
It is important that organizations invest in the right technology if they want to remain ahead in today’s market.
Curious to learn more about what Arkestro Predictive Procurement can do for you? Read how we transformed equipment purchasing with an immediate 7% savings for Holman Enterprises, an international automotive distribution and manufacturing company.