Artificial intelligence in procurement: areas of application, integration and success strategies

Artificial intelligence in procurement: areas of application, integration and success strategies

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Digitalization is advancing inexorably, and hardly any other area benefits as much from technological advances as procurement. In a world characterized by increasing complexity and competition, artificial intelligence (AI) is becoming an indispensable tool. Medium-sized companies in particular are facing the challenge of modernizing their processes and making their supply chains resilient - and this is precisely where AI comes in.

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What is artificial intelligence (AI)?

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Artificial intelligence refers to the ability of machines to perform tasks that normally require human intelligence. This includes

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• Machine learning (ML): Algorithms learn from data and recognize patterns in order to make informed decisions.
• Natural language processing (NLP): Machines understand and analyze human language, e.g. in supplier communication.
• Image recognition: Analysis of documents such as invoices or certificates.
• Forecasts and predictions: Creation of models that anticipate future developments such as price changes.

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The range of AI applications makes it an essential component of modern purchasing strategies.

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Why is AI a game changer in procurement?

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Purchasing is a strategic function that contributes significantly to a company's competitiveness. With the introduction of AI technologies, companies can:

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• Making data-based decisions: Instead of relying on gut feeling, AI analyzes historical and current data to make precise forecasts.
• Automate processes: Time-consuming manual tasks such as checking documents or communicating with suppliers are efficiently automated.
• Minimize risks: Early detection of disruptions or dependencies within the supply chain.
• Reduce costs: through more intelligent purchasing strategies and transparent cost insights.

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The change from reactive to proactive purchasing processes is essential in order to survive in a highly competitive market.

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How AI is changing the purchasing process

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Traditional purchasing processes that rely heavily on manual methods such as Excel and email have had their day. AI enables a transformation towards a proactive, data-driven approach. The integration of AI in procurement encompasses several key areas of application:

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1. supplier management:

1. Fully automated ratings and categorizations
2. Identification of risks such as dependencies or compliance violations

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2. data analysis and market forecasts:

1. Creation of intelligent cost models
2. Anticipation of price developments

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3. process automation:

1. Automation of document checks and communication processes
2. Integration of external data sources for comprehensive insights

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Prerequisites for the successful implementation of AI

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In order to use AI effectively in procurement, companies must first create a solid digital infrastructure. This includes:

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• Centralized data structures: All purchasing data should be available centrally and in a structured manner.
• High-quality master data: AI algorithms can only work effectively with clean and complete data.
• Flexible system design: Systems must be scalable and adaptable to meet individual requirements.

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Tacto takes a step-by-step approach that is tailored to the progress of companies. From the automation of simple processes to AI-based predictions, the transition is efficient and seamless.

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Tacto: AI-supported SRM system for purchasing

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Tacto has set itself the task of supporting purchasing departments in optimizing their processes with state-of-the-art technologies. AI plays a central role in this. Tacto's most important areas of application include:

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1. supplier management and evaluations

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• Fully automated supplier assessments based on performance, risk and compliance.
• Proactive indications of dependencies or potential weaknesses in the supply chain.
• Digitization and centralization of supplier information to create comprehensive transparency

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2. data management and analysis

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• Improving master data quality through intelligent algorithms.
• Linking of supplier, article and product group information.
• Aggregation and analysis of data from internal and external sources, e.g. market prices or commodity trends.

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3. automation of processes

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• Digital reading and verification of certificates and documents.
• AI-driven email communication with suppliers to minimize time-consuming coordination.
• Automated processing of compliance issues.

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4. forecasts and recommendations for action

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• Creation of intelligent cost models and anticipation of price developments.
• Identification of potential savings through proactive advice.
• Support for strategic decisions through AI-based market insights.

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Advantages of AI integration in purchasing

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The implementation of AI solutions in purchasing offers numerous advantages, including

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• Direct cost savings: Through optimized procurement, bundling of purchasing volumes and precise forecasts.
• Greater efficiency: Automated processes reduce errors and save valuable time.
• Better risk management: supplier dependencies, price fluctuations or compliance violations are recognized at an early stage.
• Long-term competitiveness: Companies that use AI are better prepared for future market changes.

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Challenges on the way to an AI-supported purchasing organization

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Despite the numerous advantages, there are also challenges that need to be overcome:

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1. Data quality and availability: Without clean and structured data, AI systems are ineffective.
2. Integration into existing systems: Many companies still use manual processes such as Excel and e-mail, which need to be gradually replaced.
3. Data protection and ethics: Handling sensitive information requires the highest security standards.
4. Organizational change: The introduction of AI requires a new way of thinking and a willingness to digitize.

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Tacto supports companies in overcoming these hurdles and building a solid digital infrastructure.

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Conclusion: The future of purchasing is digital - with AI at the center

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Companies that invest in AI today are laying the foundations for long-term success. The ability to act based on data, minimize risks and automate processes will be crucial in the future business world.

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With Tacto as a partner, companies can not only master the challenges of digitalization, but also gain a clear competitive advantage. Tacto combines advanced AI technologies with a user-friendly platform that is specifically tailored to the needs of purchasing departments.

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Are you ready to shape the future of your procurement? Feel free to download the whitepaper.

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