AI in Global Sourcing: Better Supplier Negotiations

Global Sourcing

Your supply chain may be global, but you don’t have to be afraid of it. AI in global sourcing can improve your sourcing outcomes, leading to the greatest value at the lowest cost. If your suppliers are struggling to keep up with you, AI in global sourcing could help them catch up. And if you need more from your current suppliers, AI in global sourcing could help you find new ones to work with faster and at higher quality levels than ever before. Read on to learn more about how AI in global sourcing can empower your procurement team and help you find the best suppliers around the world!

 Defining AI

To help you better understand how AI might be used to drive better supplier negotiations, let’s first define what it is. As mentioned above, AI is simply any system that perceives its environment and takes actions that maximize some goal. This system can be a piece of software, a network of systems, or even a set of business processes and practices put into place by an organization. How does it work? A traditional example of AI is IBM’s chess-playing computer Deep Blue. Deep Blue was programmed with algorithms created by some of IBM’s most talented programmers and used these to calculate its next move on each turn.

 What is Machine Learning (ML)?

Machine learning is a set of tools for making decisions with data. That definition sounds a little vague, and it is. Machine learning can take many forms depending on what business problem you’re trying to solve and how much time and resources you have to apply towards solving it. Some real-world applications include speech recognition (like Siri or Alexa), search engines (like Google’s Knowledge Graph), chatbots (like those on Slack), fraud detection, credit scoring, self-driving cars, medical diagnoses, drug discovery…the list goes on. If any decision can be automated using data, there’s an opportunity for machine learning.

 The Four Stages of AI

While it’s been around for decades, AI (artificial intelligence) has exploded into public consciousness over the past few years. This is due to advances in technology that have made AI solutions both highly effective and affordable. In particular, advances like cloud computing, machine learning and natural language processing (NLP) have made it possible for even small businesses to implement AI systems at reasonable costs. The upshot of all these advancements is that we are now entering a stage where artificial intelligence can play a major role in everyday business processes such as supply chain management and negotiations with suppliers. Here are some ways companies around the world are using AI to negotiate better deals with their suppliers.

 How Can We Use AI in Global Sourcing?

How can artificial intelligence help companies drive better supplier negotiations and faster outcomes? Let’s take a look at how AI is affecting global sourcing trends. Artificial intelligence (AI) is changing every industry, including manufacturing and global sourcing. In fact, Gartner estimates that 75% of customer service and support queries will be handled by smart software by 2020. According to McKinsey’s research, we should also expect to see an increase in time-to-value through increased automation capabilities from suppliers over time – suppliers are increasingly able to use data as an input for production planning or even product design. The result: high customer satisfaction due to faster lead times and greater innovation leading to increasing competition.

 Advantages of AI in Global Sourcing

 AI is already helping sourcing companies in USA make better decisions, thanks to its ability to automate high-volume tasks and leverage data that would otherwise be inaccessible. Today’s AI capabilities mean that it’s possible to sort through thousands of supplier bids with unprecedented speed, identify patterns and potential problems, and negotiate a winning contract based on specific parameters. This has never been more important than it is today. When negotiating contracts for new suppliers, sourcing professionals need access to accurate data—and they need it quickly. AI tools can do just that and can help companies like yours stay competitive when their products are created from many different sources around the world.


The decision is ultimately up to you. Will AI help improve your sourcing outcomes, or will it make things worse? The technology exists, and with every passing day, our ability to implement and use it will become better. It’s up to you whether that’s a good thing or not. There are many global sourcing companies that utilize AI in there day to day tasks to help you provide the best solutions as per your requirements.

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