• Written by Sonali Subhadarsini, Product Manager

A procurement team in a printing and packaging company often finds itself waiting for a report to answer questions about supplier performance, spend categorisation, and contract compliance, which can delay decision-making and impact the bottom line, as the shift supervisor checks the maintenance log and the category manager compares two suppliers, all while trying to manage the complexities of job-shop economics with heavy setup costs.

The procurement questions that currently wait on a report

The procurement team may need to know which suppliers are consistently delivering on time, or which categories of spend are not under contract, and while these questions are critical to the team's ability to manage spend and ensure supply chain continuity, they often rely on manual reporting and data analysis, which can be time-consuming and prone to error, and may require input from other teams, such as operations, which can be contacted through the operations team page.

For instance, a category manager may need to compare the performance of different suppliers, including their pricing, quality, and delivery times, in order to make informed decisions about which suppliers to use, and while this information is critical to the procurement team's ability to manage spend and ensure supply chain continuity, it is often scattered across different systems and reports, making it difficult to access and analyse.

This can lead to delays and inefficiencies in the procurement process, as the team waits for reports to be generated and data to be analysed, rather than being able to access the information they need in real-time, which can impact the team's ability to respond quickly to changes in the market or to take advantage of new opportunities.

The data behind them: purchase orders, supplier contracts and terms, invoice history, category structure

The data that underlies these procurement questions is complex and multifaceted, including purchase orders, supplier contracts and terms, invoice history, and category structure, all of which must be integrated and analysed in order to provide a complete picture of the organisation's spend and supply chain, and while this data is often stored in different systems and formats, it can be accessed and analysed using AI-powered tools, such as AsscherAi.

For example, the procurement team may need to access data on purchase orders, including the date, amount, and supplier, in order to track spend and identify trends, and they may also need to access data on supplier contracts and terms, including pricing, delivery times, and quality standards, in order to ensure compliance and manage risk.

Sector constraints: setup and makeready losses and quoting accuracy

The printing and packaging sector is subject to a number of unique constraints, including setup and makeready losses, which can impact the profitability of jobs, and quoting accuracy, which can impact the organisation's ability to win new business, and while these constraints can be challenging to manage, they can also be addressed using AI-powered tools, such as AsscherAi, which can help the procurement team to identify areas of inefficiency and optimise their processes.

For instance, the procurement team may need to take into account the setup and makeready losses associated with different jobs, in order to ensure that they are selecting the most cost-effective suppliers and managing their spend effectively, and they may also need to consider the quoting accuracy of different suppliers, in order to ensure that they are getting the best possible prices for their products.

What improvement looks like: spend under management, price variance to contract, supplier concentration

Improvement in the procurement process can take many forms, including increasing the amount of spend under management, reducing price variance to contract, and optimising supplier concentration, all of which can help the organisation to manage its spend more effectively and reduce its risk, and while these improvements can be challenging to achieve, they can also be supported using AI-powered tools, such as AsscherAi.

For example, the procurement team may aim to increase the amount of spend under management, by identifying and categorising all of the organisation's spend, and by implementing contracts and agreements with suppliers, and they may also aim to reduce price variance to contract, by monitoring and analysing pricing data, and by negotiating with suppliers to ensure that prices are consistent with contracts.

The team may also aim to optimise supplier concentration, by identifying and managing the organisation's supplier base, and by ensuring that the organisation is not over-reliant on any one supplier, which can help to reduce risk and improve supply chain continuity, and if you would like to know more about how AsscherAi can support your procurement team, you can contact us to discuss your needs.

What this does not do, or when it is the wrong choice

While AI-powered tools, such as AsscherAi, can be highly effective in supporting the procurement process, they are not a replacement for human judgement and expertise, and they should be used in conjunction with, rather than instead of, the procurement team's knowledge and experience, and while these tools can provide valuable insights and analysis, they are only as good as the data that they are based on, and they should be used in conjunction with other sources of information, such as market research and supplier feedback.

For instance, the procurement team may use AI-powered tools to identify trends and patterns in spend data, but they should also use their own knowledge and experience to interpret and act on this data, and they should be careful not to rely too heavily on these tools, or to use them as a substitute for their own judgement and expertise, and they should also be aware of the potential limitations and biases of these tools, and take steps to mitigate these risks.