Human vs AI in procurement and supply

Artificial intelligence (AI) has been the centre of much discussion in terms of the effects it could have on the future workforce, particularly within the procurement and supply chain sector. In August 2018, we joined forces with Procurious to uncover the challenges and opportunities for professionals working in the sector. The first two reports focused on the outlook for procurement and the importance of preparing for Industry 4.0. The third part of the series explores the need to adopt A in order to move the function forward and the implications this may have on the need for human capital. What will an AI-enabled procurement function look like and how will professionals in the industry fit in with this ever-evolving technology? View the full report.

In a recent interview with Jan Fokke Van Den Bosch, CPO at HSBC, he highlighted that AI was the technology that he was most excited about due to the opportunities it presents. While he recognised that this will, of course, mean many day-to-day tasks will be eliminated, he viewed this quite positively. If these low value, high volume tasks were absorbed by AI, procurement professionals could step up and take on a more strategic role within the business. Through building better relationships with key stakeholders and developing a clearer understanding of their needs, procurement professionals can increase their influence within the business and work towards reshaping some of the perceptions that senior leaders hold about the function. 

Why AI?

From a procurement and supply chain point of view, there is no doubt that artificial intelligence is going to have a significant impact on the sector. From machine learning in demand planning processes and warehouse management systems, through to fully autonomous trucks and the-Internet-of-Things-enabled (IoT) home storage feeding replenishment data direct from your fridge or cupboard. Artificial intelligence is still in its infancy, but it is not a passing fad. 
The fundamental reason behind the move towards AI is efficiency and productivity. Through better use of real-time data, less overhead costs and time spent on menial tasks such as paper-based checks, audits, fixing purchase orders, and compliance, procurement and supply processes will become much more efficient. With no limit on working or driving hours and more accurate routes, productivity will be increased.       
This technology is likely to spark a new age in terms of how we interact with everything in the real world through the collection of Big Data and the decisions it will help facilitate. Looking at how this could impact our daily lives, could potentially mean no more grocery shopping, no more driving or remote controls of any kind.

Maintaining key human skill sets 

As this technology is so new and experimental, as you would expect, there aren’t many professionals with experience or understanding in the field. From the report, 52.39% of respondents said that the decision to automate their function, would be the most significant strategic decision to be made in their organisation. Currently, Harvard Business review estimates that only 7% of manufacturing companies are using some form of AI in limited parts of their business. The more that companies choose to implement AI, the greater the need for talent will be to fill an already large skills gap. Luckily, there is still time to change. As interest grows in this field, companies will have to invest in upskilling. Those that adopt this first will dominate their respective markets.      
Communication, relationship building, leadership, and influencing, were the soft skills identified as key capabilities for success in the sector moving forward. The interactions that people have with one another can never be replicated by a machine. With this in mind, upskilling will be just as important to businesses as it will be to candidates wanting to stay ahead of AI. It’s important that businesses reassure their employees that the benefits to the business mean stability for everyone involved, potential growth, and new opportunities! 
If you would like to discuss how we can help streamline your recruitment processes to source the right talent for your business, get in touch with your local Michael Page office today. Alternatively, submit a job spec and start your search today. 
If you would like to learn more about Procurious, the global online network for procurement professionals, click here to connect. 
Richard Krysiak
Manager, Michael Page Procurement and Supply Chain 
M: +44 1179 065523