Automating High-Volume / Low-Risk / Low-Cost Goods Purchases

Author: Greg L Towne (Diriger)

Organisational buying power is constantly being marginalised or eroded through a loss of productivity measures, supply chain interruptions, inflationary pressures, and difficulty in changing current practices in alignment with internal and external influences. As this has an impact across the whole enterprise, it’s past time for our strategies, tactics, and work practices to be re-examined and re-energised.

WHAT ISSUES AND PROBLEMS CURRENTLY EXIST IN THE INDUSTRY?

Let’s look at some of the problems we already know about:

The High-Volume, Low-Risk, Low-Cost non-critical goods purchases are getting the same amount of attention and cost of transaction as critical spend items, placing a huge and unnecessary burden on all parts of the business.

TRENDING BUSINESS GOALS

The problems above have been accentuated by existing and predicted business expectations and goals, such as:

There is a HUGE need to drive risk and cost out of the equation.

INFLUENCES AND MEGATRENDS

Our approach is influenced by leveraging several megatrends impacting most asset-intensive operations.

These megatrends drive towards increased use of digital technologies to support faster decisions and sustainability within increasingly complex environments and constraints.

Hence Supply Chain Management needs to re-focus and re-energise.

RE-FOCUSING AND RE-ENERGISING VIA THE KRALJIC AND PARETO MODELS

Our guiding concepts have been to introduce modern day methods and automation to tried and proven models and analytics. We have achieved this by using the models and tactics outlined below.

SOLUTION CAPABILITY OVERVIEW

The model outlined below is indicative of our suggested re-focus and re-energising solution by using AI/ML Automation methods in a System-of-Systems environment so that the cost of these High-volume, Low-risk, and Low-cost items is reduced to ~50c instead of ~$50.

The interoperability capability provided by DirigerHUB makes the solution as seamless and scalable as possible, plus allows for flexible transition approaches aligned to the internal capability within the customer organisation. 

Additional system-of-systems capabilities and data sources can be added as required; for example, Diriger’s solution does not stop at the automation of purchasing but optimises and extends through to the payment cycle with AI/ML based Invoice Processing Automation (See DirigerIPA documents and case studies).

Our solution also extends into the realm of Management of Change governance activities; in that the solution is linked to Asset Master Data Management processes to include the automated management of new assets and salient components coupled to the disposal of obsolete items from stock and the archiving of catalogue and attribute data that is no longer required.

BUILT ON DIRIGER HUB INTEROPERABILITY AND COMPOSABLE PLATFORM

More information at www.diriger.io

Our DirigerHUB Enabling Platforms make use of the latest technologies, such as: