Integrated Solutions: Procurement’s Next Optimisation Steps

A blog post from AWS outlines its capabilities to help streamline procurement processes end-to-end, which includes automating PO generation and approval and facilitating the invoice-to-payment workflow.

The post was written by Soonam Kurian, Principal Solutions Architect at AWS and Darya Petrashka, Senior Data Scientist at SLB.

The duo wrote: “The opportunities for further enhancements, such as integrated supplier negotiations, predictive maintenance and advanced analytics, are the next steps in transforming end-to-end supply chain processes with generative AI (Gen AI). We encourage you to explore how this solution can optimise your organisation’s procurement workflows.”

Three vital supply chain macroeconomic trends 

When Gartner revealed its Supply Chain Top 25 for 2024, it showed there were three vital supply chain macroeconomic trends that influence how the top 25 supply chain leaders prioritise their investments.

These trends include; 

• supply chain organisation design and talent
• AI-driven advances to realise productivity and process optimisation
• The need to elevate supply chains to an anti-fragile state

By addressing these trends, organisational teams come closer to obtaining supply chain excellence.

Supply chain issues are an ongoing struggle for businesses across the world, regardless of sector.

Issue which include scattered data across fragmented sources, lack of comprehensive visibility into the entire supply chain and inefficient supply chain processes.

Challenges are being presented to procurement teams when placing purchase orders (POs) with inaccurate data from manual data entry, supplier challenges from capacity constraints or production delays, cost overruns and lack of transparency.

Streamline supply chain procurement processes

AWS generative AI capabilities are utilised to make the supply chain procurement process more streamlined, harnessing the ability to improve operational efficiency, enhance transparency, compliance and risk mitigation as well as reduce overall procurement costs.

AI-Powered procurement process optimisation AWS AI and Machine Learning (ML) capabilities help streamline procurement processes end-to-end, including automating PO generation and approval and facilitating the invoice-to-payment workflow.

AWS Gen AI aid in the creation and the approvals of POs, plus making them more intelligent. It can also be used to draft an PO automatically draft PO, through the generation of contextual details such as item descriptions, quantities, delivery timelines and terms.

Then, the approval workflow is optimised, as orders are automatically routed in there - while the processing of invoices is automated thanks to ML capabilities. All of which streamlines extraction of invoice data such as line items, quantities and amounts from scanned or emailed invoices.

All of this information in the placed into a data integration pipeline to automatically match invoices to POs and route them for automated review and approval.

When the procurement process is optimised, it reduces manual PO creation and matching checks, mitigates the risk of errors and ensures orders are placed based on up-to-date data and business constraints.

When manual data entry is significantly reduced, it accelerates invoice-to-pay cycles and ensures compliance with procurement controls, creating a seamless and efficient system.

The key benefits from AWS

Here are the key business benefits organisations will see if their supply chain procurement process is optimised using AWS tools:

• Improved operational efficiency: Automating repetitive tasks like PO creation and invoice processing eliminates manual effort and human errors and improves productivity. This enables procurement teams to focus on more strategic activities like supplier relationship management and process optimisation.
• Reduced procurement costs: Streamlined invoice processing and approvals accelerate the invoice-to-payment cycle, improving working capital management. Additionally, process automations free up procurement specialist time to conduct supplier negotiations which lead to better pricing, payment terms and service levels.
• Enhanced compliance and risk mitigation: Automating the procurement process helps enforce procurement policies, contract terms and regulatory requirements.

By leveraging AWS Gen AI capabilities through Amazon Bedrock and other complementary services, organisations can drive tangible improvements in efficiency, visibility, cost savings and risk management across their supply chain procurement operations.

AWS also offers additional tools, such as Amazon Lex chatbots that can be used to facilitate natural conversations with suppliers regarding order changes, expedited shipping and pricing negotiations.

Amazon Transcribe can be used to analyse call recordings with suppliers and identify areas for process improvement or cost savings opportunities.

Companies can leverage Amazon Comprehend to sentiment-analyse supplier emails and identify potential issues or opportunities proactively.

More constructive supplier management

All of these improve the relationship between organisations and their suppliers, as well as allowing agents to engage in more consistent, responsive and personalised communications with suppliers.

Analysing interaction patterns helps identify top-performing suppliers and opportunities to strengthen partnerships. Automated scorecarding and performance feedback allows for more constructive supplier management.

Organisations can perform predictive maintenance for their supply chain assets using AWS capabilities. They can collect sensor data from supply chain equipment and infrastructure using AWS IoT Core and use Amazon SageMaker to build machine learning models that can predict when assets like forklifts, conveyor belts or storage tanks may require maintenance.

Integrating these predictive insights with Amazon EventBridge, organisations can automatically trigger work orders and parts ordering.

This supply chain procurement optimisation solution, powered by AWS Gen AI, demonstrates the transformative impact intelligent automation can have on procurement processes.

With Amazon Bedrock agents and seamlessly integrating AWS services like Amazon Lambda, Amazon S3, Amazon Textract and Amazon DynamoDB, organisations can improve efficiency, transparency and cost savings.

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