In 2024, the procurement landscape is set for a seismic shift, propelled by the burgeoning use of AI and automation.

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Amidst mounting economic pressures and supply chain challenges, Keelvar's latest Voices of Sourcing report heralds this year as the critical juncture for procurement professionals to embrace these technologies wholeheartedly.

‍The imperative for change

In a webinar discussing the findings of the report, Keelvar VP of Professional Services, Dylan Alperin, and Sr. Procurement Analyst, Stuart Haase, illuminated the urgent need for the procurement sector to adapt their strategies in light of the increasing complexity and unpredictability affecting global supply chains:

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Reflecting on the impacts of recent global events, including the COVID-19 pandemic, Dylan remarked on the heightened visibility of supply chain volatility and the continuous challenges it presents. From disruptions in major trade routes like the Panama and Suez Canals to geopolitical instability and economic uncertainties, the procurement landscape is fraught with challenges that demand swift and strategic responses.

"I don't see anything soon changing... The disruptions that we're seeing in supply chain are probably not going to go away anytime soon, if ever," he warned, urging procurement professionals to reevaluate their strategies and embrace more dynamic market sourcing approaches.

The disruptions that we're seeing in supply chain are probably not going to go away anytime soon, if ever"

This call to action is not just about recognizing the imperatives of the current moment but about fundamentally rethinking how procurement can navigate an increasingly volatile world. The lesson, Dylan said, is clear: reliance on outdated, "set it and forget it" strategies is no longer viable. Instead, procurement must evolve, adopting innovative technologies and methodologies that enable quicker reactions to market changes and deeper insights into category management.

Dylan further delved into the paradox that many procurement teams face today—a mandate to expand their scope, manage more spend, and venture into new categories, all while operating with leaner teams and tighter budgets. This reality is starkly contrasted with the industry's growing complexity and the increasing workload, a scenario that has become all too familiar for many, according to the report's findings:

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"We're all being asked to do more... but at the same time, most people I talk to in industry are not being given larger teams," Dylan noted.

Will procurement be automated?

‍The discussion moved on to underscore the tangible impacts of AI and automation on procurement, with a clear message: technology should complement, not replace, human expertise.

Dylan highlighted a critical insight, "probably 80% of the buys that are happening in your organization are being done in those kinds of spot buys... and the bad news is most of those people don't sit in procurement."

In response to ongoing challenges, Dylan advocated for a strategic pivot towards leveraging AI and automation, not merely as tools for efficiency but as fundamental components of a reimagined procurement process. The goal is to automate tasks that are manual and repetitive, freeing up human resources to focus on areas where their expertise and strategic insight can be put to better use.

"We need to focus our efforts on where a human is best," he explained.

Empowering strategic decisions through automation

From automating the RFP process to handling the multitude of spot buys with efficiency and compliance, Stuart shared examples of how organizations are leveraging automation to tackle common procurement challenges and explained how these initiatives demonstrate the tangible benefits of integrating technology into procurement strategies.

"Automation is the key to unlocking procurement's full potential," Stuart remarked, highlighting how streamlined processes lead to more strategic decision-making and innovative approaches to managing spend.

"Automation is the key to unlocking procurement's full potential"

"By automating these processes, we not only achieve greater efficiency but also enhance our ability to manage risk and explore new opportunities," he pointed out.

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The goal of integrating AI and automation into procurement is not just about enhancing efficiency; it's about redefining the role of procurement professionals to emphasize strategic decision-making and innovation.

"The intention here is we need to focus our efforts on where a human is best," added Dylan. For tasks, such as the tedious process of managing spreadsheets for RFPs—a task that involves emailing out hundreds of spreadsheets, collecting, collating, and cleaning up the responses—automation offers a respite.

This shift not only promises to alleviate the workload but also to redirect the focus towards more strategic activities such as exploring new categories, negotiating with suppliers, and managing risk.

By automating routine tasks, procurement teams can dedicate their expertise to areas that yield greater value and satisfaction, thereby addressing the pervasive issue of burnout that has become all too common in recent years.

By automating routine tasks, procurement teams can dedicate their expertise to areas that yield greater value and satisfaction

The drive towards automation is a clarion call to harness technology to empower procurement teams, enabling them to navigate the complexities of the supply chain with agility and insight. In doing so, procurement is not just executing tasks but is strategically driving value and making the most of the resources at hand.

2024: The year of embracing automation

In conclusion, the main takeaway from the webinar and Voices of Sourcing report is clear: Embrace automation and sourcing optimization not as optional enhancements but as essential pillars for the future of procurement.

This is a pivotal moment for professionals in the field to step forward, leverage technologies such as Keelvar's, and redefine what's possible in procurement. The journey towards a more automated, efficient, and strategic procurement function starts now, and the tools to embark on this journey are more accessible than ever.

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