Using AI Chatbots to Deliver Purchasing Cost Savings
New tariffs – both recent changes by the U.S. administration and retaliatory tariffs from affected countries – are accelerating the need for purchasing teams to drive cost savings.
While taking actions to mitigate the impact of ever-shifting trade and tariff policies is a priority, manufacturing purchasing teams are being pressed to also implement cost savings as quickly as possible to offset increasing costs from suppliers.
Here are six examples of ways manufacturing purchasing teams can leverage AI chatbots to accelerate the delivery of purchasing cost savings.
Note that if you don’t have a paid subscription to an AI chatbot, you can use free versions to:
- Search the web (ChatGPT, Copilot, Gemini, Perplexity)
- Upload PDF, Word, and PowerPoint documents (limited use with ChatGPT, Perplexity, Claude)
- Upload Excel files and analyze data (limited use with ChatGPT, Gemini, Perplexity, Claude)
1. Identifying Cost Savings Opportunities
Download your spend data and anonymize sensitive information by substituting generic names for part numbers, supplier names, etc. Then, adapt this example prompt to identify opportunities for supplier consolidation.
“Read the attached file with columns for ‘Business Unit’, ‘Supplier Name’, ‘PO Type’, ‘Category’, Description’, Received Qty’, ‘Receive Date’, ‘Unit Price’, and Total’. I want to identify opportunities to consolidate suppliers. Specifically, I’d like to identify the categories with a high number of suppliers and significant spend.
Create a file listing the suppliers for each of these categories, listed from highest spend to lowest. Complete the analysis for all the top categories.”
2. Develop a Spend Cube
Download your spend data and anonymize sensitive information by substituting generic names for part numbers, supplier names, etc. Then adapt this example prompt to calculate spend by supplier by plant for a category.
“I have a spend data file from my company’s procurement system that I’d like to analyze to gain insights into our spending patterns. The file includes columns for ‘Business Unit’, ‘Supplier Name’, ‘PO Type’, ‘Category’, Description’, Received Qty’, ‘Receive Date’, ‘Unit Price’, and Total’.
I want to develop a spend cube that allow us to understand the spend by supplier by plant. Help me structure this data into a spend cube. Specifically, I’d like to:
- Summarize the total spend by supplier and arrange from highest at the top to lowest at the bottom.
- Break down the spend by business unit.
- Complete this analysis, leaving zero cells blank, and provide a link to the file.”
3. Identify Prospective Suppliers
Adapt this example prompt to search the web to identify potential suppliers with specific capabilities and location.
“As a buyer for an automotive supplier, list 10 plastic injection molding suppliers that are IATF 16949 certified, have manufacturing locations in Northern Mexico, and identify overmolding as a service. Provide links to their web sites (English-language if available).”
4. Write Better RFQs
Adapt this example prompt to develop a questionnaire to gather stakeholder requirements and preferences prior to writing an RFQ.
“You are a buyer at a manufacturing company that is conducting a market test of 3PLs for LTL and TL within North America and you need to get stakeholder input to populate this RFQ.
Create a questionnaire that asks stakeholders to identify their preferences for: Scope of Services, Service Requirements, Operational Requirements, Technology and Integration, and Performance Metrics.”
5. Prepare for Supplier Negotiations
Having credible alternative suppliers increases your power in supplier negotiations. Adapt this example prompt to gather information on your suppliers’ competitors to prepare for negotiations.
“You are a buyer for an automotive components supplier that buys high-pressure die-castings from [supplier name]. Search the web to identify their main competitors for high-pressure die-castings with North American manufacturing plants.
Then, read the websites of each company identified and create a bullet point list of products and services they offer”
6. Develop Negotiation Strategies
Adapt this example prompt to develop strategies specific to your negotiation goals.
“As a buyer, you are negotiating pricing with a long-time stamping supplier. Your company currently uses three additional stamping suppliers, and you are investigating adding others to achieve cost goals.
You are meeting with this supplier prior to conducting a market test in the hopes that you will be able to negotiate a contract with them that guarantees no price increases for two years, other than index-based price changes for materials. What negotiation strategies should you consider to achieve this goal?”
Check out APD’s AI Chatbots for Purchasing short course for more proven prompts designed to increase purchasing team efficiency and effectiveness.
APD offers a wide range of insightful resources, including expert-led training, on-demand webinars, and blogs on leveraging AI for purchasing!
Interested in more savings-related topics? APD has a whole section dedicated to resources and services for Strategic Cost Reductions