For a client in the fast-moving consumer goods (FMCG) sector, managing procurement efficiently is crucial, especially for smaller purchases that fall below a certain threshold. These transactions, often categorized as “tail spend,” typically don’t receive the same level of attention as larger purchases due to the sheer volume and limited time available for detailed negotiations. To tackle this, we developed an AI Guided Buying system.

Seeking ways to streamline small purchase requests

The client’s procurement team was facing a common headache. Every day, a flood of small purchase requests would come in – things like office supplies, minor equipment, or routine services. Each one was under the radar, not big enough to set off alarms, but together they were silently eating away at the budget.

While the team recognized the need to address these small purchases, the time investment involved seemed overwhelming. Sound familiar? It’s a common dilemma – how do you balance the need to control costs without burdening your team?

Luckily, our client saw the bigger picture. They knew all these little costs were adding up to a missed chance to save big. So they challenged us to develop a solution that would help them manage these small purchases effectively.

Three-faceted solution

We implemented a GenAI Guided Buying system that optimizes the procurement process through intelligent automation. The system maintains the existing process while providing AI-driven support and partial automation for specific steps.

This balanced approach capitalizes on AI’s capabilities in relevant areas while maintaining human involvement for expertise and validation when needed. The system focuses on three core areas:

Data Handling: The AI system pulls data from new purchase requests and related documents, including PDFs. It efficiently collects critical information such as product specifications, unit prices, delivery times, and supplier details to facilitate intelligent purchasing decisions.

Price Analysis and Negotiation: The AI uses historical data for price analyses and creating negotiation emails. It keeps people involved, allowing procurement experts to provide input and direction in real-time.
Testing and Refinement: We thoroughly checked the system with past data and mock negotiations, making sure it works well in different procurement situations.

Successful pilot phase

The AI Guided Buying system showed impressive results in the pilot phase. It successfully negotiated 107 purchase requests to completion, and boosted efficiency. The system got great feedback for saving time and could save even more money on all processed requests in the future.

Clearly, this solution significantly improves our client’s procurement processes. The POC has already demonstrated its importance for the team, providing sustained value and a strategic edge for the company!

Interested in leveraging AI for your operational processes?

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