CXOToday has engaged in an exclusive interview with Mr. Minesh Pore, CEO and co-founder of BuyHive.
- Why is technology important for the sourcing and supply-chain industry?
The adoption of technology over the last decade or so has significantly transformed global sourcing and procurement functions. Specialised tools for procurement today have proven business outcomes including streamlined supplier relationships, enhanced transparency throughout the value chain and greater quality and cost controls.
Tech adoption has only accelerated in the aftermath of the Covid-19 pandemic, and the Russia-Ukraine conflict this year. These two disruptive events have genuinely tested the resilience of the global supply chain industry. No surprise therefore that two-thirds of procurement organizations surveyed by EY for its 2022 Global Chief Procurement Officer Survey stated that they are increasing investment in procurement digitization to improve supply chain resilience.
The travel disruptions in particular have pushed the industry to shift a lot of workflows to digital – more supplier introductions and deal making is happening over Zoom or video calls than through in-person meetings. Large buyers and chains have also accelerated their deployment of cutting-edge technologies like data or predictive analytics to regain control over production as well as transportation.
- What are the advantages or benefits of modern tech-tools for sourcing experts?
Today, sourcing experts widely use digital or tech tools to discover new suppliers globally and forge better collaborations with their existing suppliers. These tools further enable them to use historical and current data to make informed and intelligent decisions faster, resulting in unlocking new efficiencies throughout the procurement process – from category management, price and contract negotiations to ensuring full legal compliances.
Intelligent analytics and technology further help bridge the gap between strategic sourcing initiatives and their implementation. The immense analytical granularity offered by modern tech tools enhances business agility and drives continuous process improvement, supporting an operating model that aids business excellence within procurement and supply chain functions.
- What AI/ML or IoT solutions are most viable for the procurement industry?
There are many AI/ML and IoT solutions that work individually as well as synergistically in the global procurement industry. Procurement is a good fit for AI because AI algorithms can provide rich insights from historical or current data and help sourcing experts make better decisions and enhance their legal and regulatory compliances. Today, AI-based analytics are being used to enhance operational efficiencies across all procurement processes and workflows: from optimising procurement spends and improving contract management to automation of compliance monitoring and creating better risk controls for suppliers and logistics.
On the other hand, IoT solutions today are enabling completely automated real-time tracking of inventory and logistics for the first time – creating unprecedented transparencies for procurement professionals while simultaneously removing the need for manual intervention or scope for human errors. Further, data generated by IoT devices or sensors itself is a rich input for AI models and algorithms, further enhancing operational efficiencies throughout the value chain. For example, AI models fed with IOT data can forecast inventory consumption and demand much more accurately and efficiently.
Both technologies are already finding accelerated adoption in procurement functions around the world. As per Deloitte’s 2019 Global Chief Procurement Officer (CPO) Survey, 51% of respondents indicated they were already using advanced analytics, while 25% had piloted, or were piloting an AI/cognitive solution. Of those that implemented an advanced analytics solution, 93 percent claimed to be satisfied.
The 2021 edition of Deloitte’s survey noted that high performing CPOs are 4-5 times more likely to have fully deployed advanced analytics/visualisation, 10x more likely to have fully deployed RPA solutions or predictive analytics capabilities and are 18x more likely to have fully deployed AI/cognitive capabilities.
- Does technology help with the geo-political setbacks in the supply chain? If yes, how?
Last two years have convincingly shown how modern tech and digital tools can help the global supply chain industry become more resilient and work around various hindrances – as we saw with greater use of digital workflows in the wake of travel restrictions. They have also shown the limitations of technology in working around serious crises like the Russia-Ukraine conflict, or imposition of full lockdowns in pandemic-affected regions.
In such cases where movements are restricted, the supply chain will be impacted regardless of technology deployed.
- What are the biggest barriers to greater adoption of tech?
We have seen wide adoption of digital procurement tools and other software at the level of grassroot operations and processes, however there are still gaps to be filled at the strategic levels in many organisations. Also, large organisations across industries tend to be more mature in strategic tech adoption as compared to small or mid-sized organisations.
Cumulatively, we observe a few interrelated barriers to greater technology adoption in the procurement domain. First, deployment of cutting-edge AI/ML solutions can be costly and time-consuming, with a long road to realising ROI. Second, many cutting-edge deployments require high-end technical skills and expertise that are currently in short supply because of a global rush for digital transformation. Third, there is also a significant inertia associated with conventional processes and workflows and convincing internal employees, or external parties like suppliers to change and learn a new workflow can be a daunting task.
- How does BuyHive integrate technology into a rather chaotic and fragmented procurement industry?
The sourcing industry usually has many intermediaries who charge unspecific service fees. There are also trading houses that don’t disclose their margins and are not technically sound. Our idea behind BuyHive is to make this system as transparent as possible, and to use technology to make sourcing easier and more reliable for small and midsized buyers.
Today, BuyHive provides these buyers with a trustworthy and high-quality sourcing experience. The platform connects buyers with freelance sourcing experts based in the world’s leading sourcing markets who know the best suppliers from their own professional work experience. Anecdotally, this is similar to Uber, where BuyHive provides sourcing experts, while Uber provides drivers. Uber makes going from point A to B convenient and efficient, while BuyHive makes finding suppliers convenient, efficient and cost effective.
The ‘Expert-Assisted Sourcing’ enabled by our platform is designed to democratise specialised sourcing by leveraging these experts, and by bringing their services within the reach of smaller retailers and etailers, as well as D2C brands worldwide. We have already built the world’s largest network of sourcing experts and have recently revamped our portal to help buyers find relevant sourcing experts much faster than ever before.