Insights from Deloitte’s 2023 Global Chief Procurement Officer survey and Amazon’s 2024 State of Procurement Data Report highlight the growing use of AI, particularly NLP and machine learning, in enhancing supplier relationship management, risk assessment, and operational efficiency in UK supply chains.
Artificial Intelligence (AI) is increasingly playing a vital role in enhancing procurement functions within supply chains, according to insights from Deloitte’s 2023 Global Chief Procurement Officer survey and Amazon’s 2024 State of Procurement Data Report. These advancements focus on utilizing natural language processing (NLP) and machine learning to better analyze supplier credentials, predict disruptions, and enhance spending controls.
A significant percentage of companies, ranging between 80 and 85%, are adopting AI to improve supplier relationship management, helping in risk assessment and decision-making based on supplier performance and compliance metrics. Nearly 75% of leading procurement organizations already employ AI for supplier risk scoring during sourcing processes.
In addition to risk management, AI tools are used to monitor the financial health of suppliers through real-time data from credit agencies and social media, offering early warnings of potential financial distress. Furthermore, predictive analytics in AI can forecast supply chain disruptions from weather patterns or commodity price fluctuations, enabling proactive procurement strategies like bulk buying or exploring alternative suppliers.
AI also supports operational efficiencies within procurement. For example, Amazon Business utilizes AI to restrict unauthorized spending and optimize purchase decisions based on predictive analytics. These systems can automatically identify purchasing needs and timing, thereby reducing costs and preventing fraud through flagged unusual activities.
Overall, the integration of AI in procurement not only strengthens supplier relationships and risk management but also enhances strategic decision-making and operational efficiency, paving the way for more informed and agile supply chain practices.
