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This article is part of an ongoing series called Machine Learning for Manufacturers, which focuses on the uses for artificial intelligence (AI) in manufacturing. It began with our article introducing machine learning and AI, and continues to spell out the many ways that AI solutions are relevant to manufacturing and supply chain operations. 

What is Procurement, and What Does It Mean in Manufacturing?

In manufacturing, you could say that what goes in, must come out. In addition to that, you could say that the cost of what goes in positively or negatively affects the pricing of what comes out. 

To ensure that what goes in does not cost a profit-hurting amount of dollars, or whatever currency a given manufacturer deals in, manufacturers must focus their efforts on a process called procurement, which involves researching the many available suppliers one could partner with, the pros and cons of each, differences in product quality and what you can and can not skimp on, among other things. 

Of course, once you find the supplier you deem right for you, you will need to determine the terms of agreement, so that each party is ensured a desirable profit, a good thing for a friendly and productive supplier-manufacturer relationship. 

Procurement also involves the post-partnering relationship, meaning the continual procurement of goods and materials throughout the course of your partnership within a supplier. 

Securing the Bag

Manufacturers are not self-sufficient entities, but depend on many people for staying afloat. 

Among those people are suppliers, AKA the entities responsible for getting the needed raw materials to the manufacturer. 

Without those materials, there are no goods to stock the shelves of manufacturers’ clients. 

Many things need to go right in securing those raw materials, and at a fair or low price, too, which is what the process of procurement centers around. 

AI, as you can probably guess, can play a role in this process. 

Read on to find out some of the ways that AI is improving procurement for manufacturers everywhere. 

Sending and Processing Requests

One of the more drudgery-laden tasks involved in procurement is sending or processing the many orders you deal with on a daily basis, along with the headache of trying to find the best prices. 

Luckily, you can hand this over to AI quite easily. 

For example, if you need to place an order for, say, iron, instead of simply sending the order along to your supplier, an AI agent can offer you predictions about the daily price of iron, and allow you to negotiate a price with your supplier that reflects what is happening in the worldwide metal exchange 


Price changes across many suppliers, not just your own, can be gathered and analyzed by AI to tell you if you are getting a good deal, and if you perhaps need to renegotiate your contract to get a better price. 

Managing Payments

Your procurement team can cut down on handling invoices from suppliers by drawing on AI, through procure-to-pay (p2p) platforms that can review and even pay invoices, notifying you if anything suspicious is on those invoices, such as a higher price than usual. 

Summary and Conclusion

The process of procurement involves many foundational manufacturing practices such as setting the terms of agreement between suppliers and manufacturers, not to mention finding and assessing the available suppliers and the quality of their products. Manufacturers can be assisted by an AI agent that can find meaningful patterns in data sets related to potential suppliers, and help find you the best deals possible. 

AI-Powered Data Solutions for Your Company

To learn more about AI-based solutions, manufacturing-related or not, reach out to Findability Sciences, a leading AI service provider. From predicting customer churn to installing chatbots in your supply chain, you are sure to find what you need at Findability Sciences. 

Read other informative articles in our ongoing Machine Learning for Manufacturers series: