AD – SUPPECO MEDIA SALE

Leader, Procurement Advisory, The Hackett Group.

Using advanced data analytics and cognitive technologies – such as artificial intelligence (AI) and machine learning (ML) – to analyse data from suppliers, market trends, regulatory requirements, and internal processes, this approach identifies and mitigates potential risks in procurement.

“Cognitive data-driven risk management helps businesses identify and assess risks that are developing in our supply chains, as well as make more informed decisions to mitigate these risks. It’s used for the most critical supply chains, such as semiconductors, textiles, and automotive,” explains Walden.

“We’ve likely all seen what generative AI tools like ChatGPT and others can do to make our day more productive. Imagine the advantages once that capability can further empower our modern risk management solutions using machine learning, advanced decision-making models, and natural language programming.”

Benefits of cognitive data-driven risk management

Adopting cognitive data-driven risk management in procurement offers a competitive advantage to its users. Those in the function can proactively identify potential risks and develop effective strategies to mitigate them. As a result, the likelihood of experiencing supply chain disruptions reduces and overall risk management processes are improved.

“I see the key benefits as speed, productivity, and analysis. Modern supply chains are complex beasts with many moving parts. Plus, the list of supply risks is ever-growing; it is in the procurement team’s best interest to understand how risks may be developing, ranging from the classic financial or inventory risks, all the way through to geographical and geopolitical risk,” comments Walden.

He continues: “Artificial intelligence tools with powerful analytical capabilities are perfect to ingest, review, analyse, and bring to our attention the most important topics - sort of like finding that metaphorical needle in the haystack. For humans to perform the equivalent would unfeasibly require many more resources.”

Other benefits of cognitive data-driven risk management included supplier risk and performance management – often a top challenge for procurement professionals. Using the power of AL and ML to analyse supplier data can help procurement to gain