The future of procurement is data first with AI

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Officials from Unilever, Siemens Energy and Scoutbee discussed using big data to solve supply chain challenges and create new opportunities at Digital Procurement World.

Procurement teams are challenged with the exponential increase of data everywhere and bringing it all together to leverage it and make the right decisions, according to panelists speaking at Digital Procurement World in Amsterdam on Thursday.

Getting data out of the supply chain and figuring out how to transfer it to a buyer so they can do something tangible with it is a challenge — especially when you have 56,000 suppliers, said panelist Alexandra Tarmo, head of partnerships and social procurement at Unilever.

The current technology ecosystem is not prepared to handle all tier one and tier two data points, observed panelist Gregor Stühler, CEO and co-founder of B2B sourcing platform Scoutbee.

One of the biggest areas of opportunities to use supplier data is in environmental, social and corporate governance initiatives “and investing in data capabilities to make sure you’re able to work within the current climate and be able to proact and not react,’’ Stühler said.

When it comes to logistics issues such as with China in the current geopolitical climate, you want to get data early, be able to react to it and find alternate suppliers, said speaker Nicole Seitz, vice president of supply chain management at Siemens Energy. Her goal is to “find solutions with startups” so the company will be able to get early warnings of any supplier problems, Seitz said.

To be able to innovate your supply chain, you need to consolidate data, measure it and have a complete picture with a knowledge graph of your internal supplier base, Stühler said. The goal should be to find sustainable and diverse suppliers and start your internal base, but data is usually scattered across systems.

It’s important to be able to connect existing systems to know where there are “optimization pockets,’’ he said. Otherwise, your organization will not gain a competitive edge when trying to compete on resilience and ESG.

Siemens Energy set up a program to be able to contact startups and accelerators that have ideas for building new ideas to bring to market, Seitz said.

Unilever doesn’t have a federated approach to sustainability and suppliers yet — right now it is done country by country, Tarmo noted.

“We are starting, but we don’t have the answer,” she said. “We need to collaborate with others to define the right approach.”

She added that when it comes to sustainability, this is better than doing nothing.

When thinking about diversity and sustainability in supplier data, “we have to start in the given moment and can’t wait for legislation to happen and tell you what data points you need,’’ Stühler said. “The ESG data ecosystem is exploding.”

Seitz said that Siemens Energy has new power plants investing in research and development. “The supply chain needs to be green because customers will ask for it, especially in the future,’’ she said, adding that this is a long process and that plants in some of their countries are further along in the process than others.

The panel was asked for their advice on how to combine external and internal data sets, given that there are so many external suppliers of data, and whether there are competitive advantages with internal data.

“We need to simplify it,’’ Tarmo said. “If someone can map all our suppliers and what we use where and for what would be brilliant.”

The challenge is being able to simplify and explain how Unilever is using data to her 56,000 suppliers who are at different levels of maturity.

“Digital capabilities are important, but the urgency is to simplify the model, and the big call to action is to find solutions to openly share more and get access,” especially to meet ESG goals, Tarmo said. Right now, her team is piloting many tools and adding some integrations.

“We don’t have the answer, but what keeps me awake is explaining [the data] to suppliers and getting something out of it,” she added.

A goal for Siemens Energy is for data experts to read the data and put it in the right context and be able to connect to suppliers.

“That’s something we have to invest more in; getting people who are knowledgeable to make the right decisions,” Seitz said.