Archive for September 22nd, 2008

Where technological focus can improve retail procurement part one of two.

Monday, September 22nd, 2008

Spend Management Companies need to focus there effort on automating and improving retail spend management tools by 2010.

We owe this to consumers, and the environment. Every company in the world today is dedicated to its own ideas, its own successes and its own profititablily. Don?t let anyone tell you differently. While oil companies are recording record profits the world economy is falling apart. Among other out of control costs, retailers are paying more to ship products which in turn drives up the cost of those products for consumers. Consumers as a result are spending less. As a result retailers are struggling and closing more stores than any time since 2001. This is a vicious cycle. Procurement life cycle automation can solve this problem.

The technology exists today to attack the problem of escalating costs of raw materials, shipping, retail price increases and other associated supply chain costs and it has for years. To some extent, too much thought leadership in these technologies is being invested in games, consumer gadgets and the like instead of less sexy tools focused on reducing the cost of goods which will instantly improve profitability and foster economic growth creating new jobs. This is the cycle we should be working towards.

Artificial intelligence (AI) has been around for years. John McCarthy, who coined the term in 1956, defines it as “the science and engineering of making intelligent machines.”
According to Wikipedia, Major AI textbooks define artificial intelligence as “the study and design of intelligent agents where an intelligent agent is a system that perceives its environment and takes actions which maximize its chances of success. Isn?t that exactly what we should be trying to do with the automation of spend management and the global supply chain.

Robotics is also not a new technology and has been used in manufacturing for years. I?m sure most everyone has heard of Asimo a humanoid robot created by Honda that can do many things normally attributed to human beings such as recognizing moving objects, recognizing postures and gestures, distinguishing sound, recognizing environmental situations such as terrain like steps and recognizing facial expressions. Beyond recognition, Asimo can also react to these conditions. Some say by 2015 Asimo will be available for purchase by consumers to conduct daily tasks in the home and at work.

So, what does all this mean to the procurement professional and why should it matter? Check in with tomorrows post to find out.

We look forward to your comments.