Is digital procurement the wave of the future, or part of the present? Those two options seem to be the only possible paths for logistics departments to go, as high-tech solutions take hold in every imaginable industry. Sticking with heavily analog processes limits the kind of speed, efficiency and visibility open to companies. Exciting new processes such as predictive analytics don't work unless they have stores of digital information to use as raw material.
The move to more tech-savvy operations has been playing out in the supply chain for a long time, with leaders trying to find ways to square the technology's potential with existing processes that still have a foot in the manual operations sphere. The winning formula for companies will involve a direct path to value, with short-term and immediate gains opening the possibility of more permanent advantages to come.
Leadership shows determination
According to the University of Applied Sciences Wurzburg-Schweinfurt's new SAP-sponsored study of procurement managers, the entire industry is on the precipice of an evolutionary process that has been promised for decades. The next steps of digital investment will take businesses beyond the simple automation of existing processes and begin delivering strategic value rather than just operational savings. Though it's true that most departments haven't yet completed their adoption of the new projects, leaders have envisioned their next steps.
The split between executives who believe in digitizing and those who have accomplished the process remains pronounced. The university's survey revealed that 83 percent of the 450 employees surveyed are convinced digital implementation will change the way they do business. That number contrasts sharply with the mere 5 percent who have already gotten through the process of automating their operations to a significant degree. Evolution is on the way, but the tide has yet to turn in most organizations.
Actual effects of digital transformation can involve exciting new capabilities for procurement departments. According to the University of Applied Sciences, the wave of effective new processes coming to the supply chain won't take the form of robots occupying purchasing roles currently occupied by human employees. Instead of putting people out of work, digital algorithms will give high-speed insights that enable efficient and accurate buying decisions. Artificial intelligence is more of an enabling tool than a simulated worker.
The kind of assistance provided by powerful new algorithms may be essential for analysts trying to wade through a sea of numbers and keep their departments on track. Suplari Head of Marketing Gregg Makuch told PYMNTS.com the vast amount of information flowing into and out of supply chain departments can be overwhelming. This chaotic flow of data can be hard to parse, which is where analytics tools come in.
Going digital is a process with many parts. Replacing analog record-keeping with digital solutions may swamp departments with data, leaving employees scratching their heads. Augmenting those human workers with advanced AI, as Makuch suggested, is a way to make the many kinds of information tell a coherent story. At the end of this digitization journey, there are exciting and timely insights waiting to be mined.