There is a new way to handle procurement in the supply chain, which is called Cognitive Procurement. Cognitive procurement shows us the ways that technology is truly changing the way we do business.
Cognitive procurement is using technology in the supply chain process. Everything from artificial intelligence to deep learning, data mining, pattern recognition, the Internet of Things, and blockchain technology. All of these technological processes help to make cognitive procurement the way procurement is done in the future.
New Way To Handle Procurement – Cognitive Procurement
Everyone is talking about cognitive procurement as a new way to handle procurement in the supply chain. This is considered to be the future for procurement. Cognitive procurement is considered a disruptive technology. It is a technology that is redefining the supply chain procurement processes.
Cognitive procurement is all about the computer systems starting to self-learn the procurement process so that the computer starts to make the decision. For strategic sourcing, the computer will make a faster and more accurate buying decision than a human being.
Below are 6 Ways And Technologies that Cognitive Procurement Uses to Make it a Different Way To Procure Products.
1- Use of Artificial Intelligence(AI) Not Humans To Make Decision
Artificial intelligence is the new wave of technology; in fact, Artificial Intelligence will probably re-define a lot of what we do today and a lot of our technology. This is because artificial intelligence can support, replace or even supersede human intelligence in any task given.
Artificial Intelligence ensures that many jobs that once required human intelligence will be obsolete for many people; procurement is one of those jobs.
In data-heavy industries such as procurement, the self-learning technology of artificial intelligence can handle advanced tasks, including analyzing massive amounts of information over real-time to make a decision. Also, to replace some time-consuming, repetitive tasks such as invoice matching, data entry, and payment approvals.
AI or Artificial Intelligence thrives on repetitive, data drive tasks. And the more AI learns, the better and more proficient it becomes.
Artificial Intelligence will be able to do all of this with accuracy and speed that no human can ever match. In other words, with cognitive procurement, a machine will be able to outperform our own human intelligence at a speed and accuracy that we mere humans can only dream of.
2 – Use of Deep Learning
Part of Artificial Intelligence is known as deep learning. Simply put, this is the AI function that imitates the workings of the human brain; it is how AI can process data and create patterns to make a decision.
Deep learning is actually considered a part of artificial intelligence. This means that the system will be capable of learning from the data in an unsupervised way. The system would detect objects, recognize speech, translate languages, and then make accurate decisions based on what they have learned.
The key in all this is the machine can learn all this without human supervision. It would be like having an employee you did not need to pay, who would work day and night and did not need to be supervised and still could make 100% accurate decisions.
3- Use of Data Mining
Data mining is the ability to turn raw data into useful information. This is also another core function of cognitive procurement and artificial intelligence.
With cognitive procurement, the machine will have the ability to mine huge amounts of data and quickly find the most useful information or information needed to make the correct decision. Once humans use to dig through this data and try to make sense of it, with cognitive procurement, a machine will do that for us now.
4- Pattern Recognition
With cognitive procurement, there will be automatic recognition of patterns and irregularities in data. The machine should be able to help you to be able to see patterns, see irregularities, or even target irregularities in your procurement process. Pattern recognition is one of the major advantages of cognitive procurement as it will help find any problems in the procurement supply chain.
5- Internet of Things (IoT) Powered by Big Data
Internet of Things, known as IoT, is the ability to process a large amount of data on a real-time basis and store the data using various storage technologies. A large amount of unstructured data can be generated by the Internet of Things (IoT) devices, and this is then all collected together in the Big Data System.
In more simple terms, Big Data and the Internet of Things (IoT) work together with a vast network of sensors (IoT)to collect a load of information, which is also known as big data. This big data and information can improve the procurement process in the supply chain and easily store the information.
6- Use of Blockchain Technology
Blockchain technology makes it very difficult or almost impossible to be able to change, hack or cheat any kind of system. A block chain is essentially a digital ledger of transactions that is then duplicated and distributed across the entire network of a computer system known as the block chain.
Under the blockchain, the data is in blocks. All the blocks would need to be hacked to hack a system, which is extremely;y difficult. Because of the way the system is set up in blocks it makes it almost impossible to hack or compromise the entire systme.
Cognitive procurement will use the blockchain system at its very core. This means that it will divide the data into blocks, so it will be difficult to hack, cheat or change the system. Today, there are some issues in the blockchain system, but it is believed that cognitive procurement will be using blockchain technology as it becomes refined.
One reason blockchain is so important in the supply chain is that blockchain in the supply chain can help foster better traceability, transparency, and credibility. This, in turn, of course, has an impact on procurement.
If this all sounds a bit scary or futuristic, it should not. This is the future of procurement and many other industries. This new technology will help anyone who is purchasing or in procurement to make better decisions. But of course, in the process, there will be those who lose their jobs or their jobs will become obsolete.
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What Is Product Sourcing and Strategic Sourcing?
Product sourcing is when you source or look to find a supplier for a product you need. Strategic sourcing is strategically sourcing products. Strategic sourcing is not about the lowest purchase price but the lowest overall cost. Product sourcing and strategic sourcing are very similar, but strategic sourcing is sourcing with a plan in place.
What Is The Difference Between Supply Chain Management and Logistics?
Supply chain management is about the collaboration and partnerships to get the goods from raw material to the end consumer; it is about the partnerships and collaborations within this supply chain process. Logistics is one part of the supply chain management; logistics is about moving the goods from one place to another. In some instances, the logistics providers will also store the goods and send them on to the end consumer.
You can learn more by reading our blog What Is The Difference Between Supply Chain Management and Logistics? by clicking here.