Quick Wins – AI Chatbots for Purchasing Teams

AI chatbots – particularly ChatGTP 4 – are quickly proving to be a nearly effortless, swiftly deployable tool that stands to revolutionize how purchasing teams tackle both time-consuming and creative tasks.  Imagine having an assistant that combines the eagerness of an inexperienced intern with the wisdom of a seasoned coach or mentor. This assistant is not only capable of executing detailed tasks with precision but also offers insightful advice based on a vast repository of accumulated knowledge. 

In a December post Exploring Generative AI for Procurement, we reviewed articles describing useful AI chatbot use cases for purchasing teams.  Nine different areas rose to the top, in this article we’ll identify where we’re seeing quick wins for three of them: sourcing, strategy development, and communications. 

How Purchasing Teams Can Leverage AI Chatbots 

Think of the AI chatbot as an inexperienced intern who can help you with time consuming tasks, or alternatively, as a very experienced coach/mentor who can provide advice based on their accumulated knowledge. 

As when you’re dealing with inexperienced interns, you’ll want to provide the chatbot with explicit directions and examples of what you’re looking for.  You will only use it for tasks where you know the inputs and the outputs, and you’ll always check their work.  For example, if you ask the chatbot to summarize all the documents available to suppliers on your company’s website, you’ll need to: 

  • load the specific documents, 
  • explain how the summaries will be used, 
  • describe the intended audience,  
  • and specify how long the summaries should be. 

Chatbots can turn this kind of job around in just a few minutes, and you need to be sure to review the work to confirm it covers everything you’d asked for and it’s thorough and accurate.  Note: you can subscribe to ChatGPT 4 to upload documents – free versions of ChatGPT, Gemini, and Copilot do not give you this functionality at this time. 

Using the chatbot as a coach/mentor is a little different.  Sometimes you don’t know the answer to a question, or you want to check that you’re not leaving anything out.  You’ll need to provide context and be clear on what you’re asking the chatbot to do.  For example, if you’re preparing to meet with a supplier from another country where you don’t have a lot of experience, you could ask it to list the cultural norms for businesspeople from that country along with recommendations for aligning with these norms. 

Here’s that example in a prompt:  “As a buyer, you are preparing to negotiate an agreement with a supplier based in Brazil.  What are some of the cultural norms typical of Brazilian business professionals?  List these in a table format along with recommendations for aligning with these cultural norms.” 

And here’s what the chatbot came back with: 

Cultural Norms Recommendations for Alignment 
Personal Relationships Invest time in building personal relationships before diving into business. Small talk and getting to know your Brazilian counterparts on a personal level can be very beneficial. 
Communication Style Expect a more indirect and expressive communication style. It’s important to read between the lines and understand non-verbal cues. Be patient and avoid pushing for direct answers. 
Meetings and Punctuality Meetings may start late and run longer than expected. Time is often seen more flexibly. Plan your schedule accordingly and show patience if meetings do not start on time. 
Negotiation Process Brazilians often view negotiation as an art. Be prepared for a slower negotiation process with a lot of back-and-forth. It’s important to remain flexible and open-minded. 
Hierarchy and Respect Understand and respect the hierarchical structure in Brazilian companies. Decisions often take time as they may require approval from several levels of the organization. 
Dress Code Dress conservatively and professionally. In many Brazilian cities, business attire is formal, and paying attention to your appearance is seen as a sign of respect. 

1. Quick Wins for Sourcing 

AI in Sourcing | Advanced Purchasing Dynamics

Sourcing activities can take up a lot of time, and when done right, add a lot of value to the company.  Here are some use cases we’ve found AI Chatbots can be very helpful for sourcing: 

  • Identifying prospective suppliers  
  • Identifying factors to evaluate potential suppliers  
  • Selecting vendors  
  • Writing and editing RFXs  
  • Evaluating supplier quotes 

2. Quick Wins for Strategy Development 

Purchasing Strategy AI | Advanced Purchasing Dynamics

Developing purchasing strategies requires a combination of current state analysis and planning. Here are some use cases we’ve found AI Chatbots can be very helpful for strategy development: 

  • Projecting procurement needs based on predicted demand 
  • Optimizing inventory levels based on supplier lead times and demand patterns 
  • Identifying macro trends affecting the business and purchasing team 
  • Summarizing market intelligence and stakeholder input 
  • Consolidating client and regulatory requirements for sustainability practices 
  • Develop and adjust category strategies 
  • Personalizing purchasing strategy communications for specific stakeholders 

3. Quick for Communications 

AI in Communication | Advanced Purchasing Dynamics

AI Chatbots are based on Large Language Models, meaning they’ve been trained on enormous amounts of text and use that training understand user questions and craft relevant responses.  Generating content is a strength that all levels of purchasing teams can take advantage of.  Here are some use cases we’ve found AI Chatbots can be very helpful for communications: 

  • Summarizing key points from a document 
  • Translating a document into another language 
  • Writing a letter of recommendation 
  • Create interview questions 
  • Writing/editing emails 
  • Generating training content 
  • Writing job descriptions 

Interested in learning more about Generative AI for purchasing and procurement activities? Watch APD’s recent webinar “Supercharging Purchasing Productivity with AI”

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