Increasing computing power, AI applications and the many new options for easily digitising processes are increasing the number of software solutions specifically for procurement and supply chain management says Oliver Kreienbrink, Managing Director of ADCONIA. In our view, these four trends are the ones that offer real added value for companies:

• Sustainability as part of supplier management
• Simple enquiries – Tenders simple, direct and part of the process
• AI in planning, demand assessment and purchasing
• ASCM – the networking of supply chains

Sustainability anchored in supplier management

The increasing reporting requirements for the supply chain have found their place in supplier management. Years ago, supplier management consisted of a list of addresses and contact persons, usually without maintained e-mail addresses, but today’s software solutions are already a centralised location for information, evaluations, contracts and certificates for each supplier. This, combined with key figures from the company’s own ERP system and quality assessments, results in a comprehensive supplier cockpit. The next step will be networking with the outside world and within the supply chain, i.e. not only information about a company’s direct suppliers, but also extended to include the upstream supply chain right up to the raw materials. The next step will then be the calculation of CO2 quantities along the supply chain.

Just ask for transparent prices

In day-to-day mass business, there is often not enough time to consistently enquire about market prices. On the one hand, this is due to a lack of internal tools, resulting in media disruptions, enquiries by email, analyses in Excel and manual transfer to orders, and on the other hand due to a lack of willingness on the part of supplier. An enquiry by email also involves the same effort for supplier as it does for purchasing, and sales departments are happy to do without a margin of 10 or 20 euros. As a result, orders are placed at stored prices from existing sources of supply until invoices with new prices are received from the supplier. The solution to this problem is tendering tools with low barriers and integration into the ERP systems of purchasing and suppliers.

Artificial intelligence supports planning, demand assessment and purchasing

Everyone is talking about artificial intelligence, and rightly so for processes and applications that already have a good database. AI can provide excellent support, particularly in the operational purchasing process, to create good forecasts for consumption and procurement based on historical data in combination with sales or production planning data. In addition, AI can help requisitioners to determine their requirements, simply by analysing samples of past purchase requisitions. In purchasing, it’s not always just about the right supplier, but also about the right time and the best order quantity. AI can help with these issues in particular by linking different sources of information.

Advanced Supply Chain management – ASCM

ASCM is not new and perhaps not a trend either. ASCM has existed in theory and probably in individual applications for 20 years. Since then, people have been talking about supply chain networks, the networking of supply chains. In principle, the exchange of forecast data within supply chains has already become established, as the costs in a supply chain are too high due to excessively high or low stock levels, partial deliveries or production batches that are too small. However, companies have long resisted networking ERP systems. Individual approaches in the automotive industry, necessary for just-in-time deliveries, have not become widespread. However, every company should ask itself for the future whether the internal effort for scheduling and waste in the supply chain, which also leads to costs, continues to make sense. Costs in the supply chain do not disappear.

ADCONIA – Out of the ordinary

Consulting for procurement, supply and value chain with a focus on cost management, digitalisation, organisational development and sustainability.