Scoutbee CEO Gregor Stühler and Michael Klinger, Corporate Supply Chain Manager for Siemens AG, joined the CogX 2021 Festival for a lively chat about AI-powered scouting. Let’s explore the findings…
Each year, CogX Festival gathers the brightest minds in business, government and technology to celebrate innovation, discuss global issues and share the latest trends. Scoutbee’s Gregor Stühler joined this year to discuss the impacts of AI-powered scouting alongside a large-scale, world leading Scoutbee customer – Michael Klinger, Corporate Supply Chain Manager for Siemens AG.
It is notable that procurement as a business process is now in the spotlight at tech events such as CogX. The importance of supplier insights has escalated as a priority since increasing global crisis events like COVID-19.
Scoutbee’s session featured on the “Lab to Life” stage, alongside industry leaders like Porsche, Coca Cola and Unilever, and was moderated by Scoutbee’s Ophelia Otto. Gregor and Michael explored the following areas:
- How AI beats visibility challenges and inefficiencies that limit old style procurement
- How information advantage can unlock value and help build diversified and competitive supply chains
- How AI is helping to transform supplier discovery and insights
- How digital scouting can unlock many types of value for organizations
Transcending the limits of traditional scouting methods
Michael Klinger described why Siemens decided to partner with Scoutbee: the company was tackling some of the most radical changes to its products and solutions in recent decades. This of course meant implications for their supply chains. Siemens’ procurement team set tight time limits for finding the best suppliers in many areas, and quickly reached the natural limits of traditional manual supplier scouting methods. After examining more than 20 solutions, Scoutbee was selected as the best match for Siemens’ requirements, culture and processes.
To date, three parts of the Siemens “family” (Industry & Mobility, Siemens Healthineers and Siemens Energy) have participated in the digital scouting program, resulting in a very broad search spectrum, from innovative semiconductors and energy storage, to mechanical components and raw products or services, across the whole value chain of Siemens. “Digital scouting is now an important part of our tech segmentation – it provides more efficiency in search, better visibility and insights”, says Michael, “the value of the insights uncovered by Scoutbee is broad, and it’s a positive contribution to our work”.
Since then, Scoutbee has been used in some really exciting categories across many divisions of Siemens.
Originally, Michael planned to limit the use of Scoutbee to new technologies within the framework of the supplier innovation programme. However, day-to-day business quickly caught up with him – and Siemens now also uses Scoutbee for enhancing risk management and to identify alternative suppliers for cost reasons. “It’s a very broad spectrum, depending on the respective use case such as: Innovation, Global Value Sourcing and Localization of Products”, Michael explains.
Michael reports that his colleagues at Siemens are particularly impressed by the high hit rate and speed, the high level of technical expertise of the Scoutbee team, but above all by the individual support provided by the Scoutbee tool from kick-off to the final result. A big issue for Michael would have been having to train hundreds of managers before they could get started.
Scouting helps procurement to tackle key strategic issues
Gregor points towards the repositioning of procurement as a ‘knowledge and innovation partner in organizations, showing for example, how challenges in product design, engineering and production can be solved by procurement technology uncovering the answers. Scoutbee helps purchasing teams address key strategic issues, offer a structured scouting process to the internal organization and put procurement back in the driver’s seat.
Scoutbee sees evidence of proactive scouting taking off as a business trend across many industry sectors. Knowledge about supplier options, pricing, innovations, competition etc., all enable procurement to perform as “the spider in the web”, Gregor believes.
Data can be used for preparing negotiations with suppliers
Michael appreciates the very high transparency of the structured scout-to-source process and the deep insights that Scoutbee can deliver, due to the terabytes of data it analyzes for each sourcing case. “Supplier insights are not only interesting for scouting new suppliers, but also for preparing negotiations with an existing supplier”, he adds.
“Information is the currency of companies in the future, and that’s exactly what Scoutbee delivers!” Michael Klinger, Siemens AG
In addition to the operational search that Siemens’ purchasing teams use today, Michael plans in the coming year to combine the high granularity of Scoutbee data with the company’s internal systems to create an overall picture, including how they can combine new findings with their existing range of suppliers.
Michael has further ideas for the future: “Seeing data from suppliers and customers in a relationship gives us the idea of analyzing our entire value chain and identifying supplier bottlenecks. I can also use the application of Scoutbee as a tool to further develop material strategies in terms of supply chain transparency”.
AI can never replace creativity in procurement
Gregor sees the use of AI in procurement today as rather limited, as it is mostly used to predict the next disruption event. “But the world is not predictable, and solutions that automate everything simply won’t happen”, he points out. “The only chance to be prepared for the next disaster is to have options at hand and to know about alternative sources around the world”.
Some fear that algorithms will become so smart that AI could perform processes like procurement better than humans. Gregor believes this fear is unfounded, “In procurement, there are many time intensive, repetitive tasks, such as contract management or payments. But anything that has more to do with creativity will never be replaced by AI”. Of course, areas such as supplier negotiation and collaboration, remain creative and highly strategic.
“AI will not replace procurement teams, but procurement teams that use AI will replace those that don’t.” Gregor Stühler
Michael’s experience at Siemens reveals that AI-driven supplier scouting can comprise a valuable enabler – helping different teams across an organization to raise efficiency in searches, achieve better visibility of their supplier landscapes, and deploy important learnings from supplier insights at scale.
Scoutbee regularly speaks with experts to learn and share the latest perspectives on how Smarter Supplier Discovery can best be applied to global industries.
In this video, Scoutbee CEO Gregor Stühler and Michael Klinger, Corporate Supply Chain Manager for Siemens AG, explore “Forget manual searches! Gain supplier discovery and insights at scale with AI” at the CogX Festival 2021.
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