With little end in sight to the supply chain disruptions that have been making global headlines and the world seemingly “short of everything” thanks to pandemic-related hold-ups, it’s of no surprise that Chief Procurement Officers and sourcing teams are seeing an increase in workload complexity on all fronts. For logistics procurement in particular – ocean freight, air and even ground transportation – long-term commitments have taken a backseat as the practice of spot buying has become more routine come more and more into the sourcing picture. As a result, buyers are regularly forced to take an ad-hoc approach to meet business objectives and drive profitability.
Sea-ing Spots in Logistics Procurement
While spot buying has always occurred in transportation procurement, the pandemic brought it to a whole new level, and the surge in demand was one of the key themes highlighted by the Keelvar team during a 30-minute webinar in August 2021.
As the panelists pointed out, it’s not uncommon for some of Keelvar’s larger customers to see hundreds (if not thousands) of spot buying events taking place throughout the year due to supply chain fluctuations and market changes. For example, the increase in ocean and air spot bidding is being determined by lower capacity, unforecasted demand and shipment time disruptions, while road freight disruption is being driven by new or alternative lane needs and carrier availability.
This increase in tactical sourcing is not only placing extra demand on employees who should be focusing on more strategic initiatives, ultimately, it’s bad for business.
Riding The Tailwinds of Optimization
To cope with increasing pressures as freight rates remain high, vessel charter rates soar and bottlenecks remain, more sourcing leaders are leaving behind traditional e-sourcing tools and taking advantage of modern technology bolstered by the power of optimization and automation to alleviate workloads and offload repetitious activities. And, what many have discovered in the process is that it’s not only highly strategic or annual RFPs that can derive significant benefits from harnessing this technology.
In fact, for everything from large annual tenders with colossal spend sizes to lower spend but higher-volume spot bidding events, Keelvar Sourcing Optimizer and Intelligent Automation solutions are being utilized effectively by global customers to optimize processes and automate a large percentage of the work that goes into an event:
Automation to Address Key Challenges with Spot Buying
Specifically within logistics procurement, automation can play a helpful role in aiding buyers to be more responsive and agile in the spot buying process when that sudden shift in priorities results in additional challenges. Areas of benefit reported by customers include:
- Ensuring Processes Are 100% Transparent & Traceable
Spot bids are often negotiated outside of a formal e-sourcing process, resulting in untracked or error-prone data that can’t be used for forecasting, tracking spend or process compliance. As a result, it can be difficult to meet requirements around business traceability and transparency when key information is not being centrally digitized.
- Relieving Buyers Who Are Plagued By “Busy Work”
Even during ‘normal’ times, processes such as obtaining new lane rates was taxing and resource-consuming, particularly when there's only so much time a human worker can allocate to the volume of tasks being asked of them. Spot bidding adds another frustrating layer of complexity, with the panelists pointing out that some Keelvar customers have identified as many as 35 manual steps required with one single spot bid.
- Bringing Competition to The Bidding Process
A competitive bidding process with a large number of invited suppliers can pile a lot of extra work on a sourcing team’s plate without the right solution in place. Spot buying often skips competitive bidding in favor of speed, but this limits competition and – ultimately – leaves potential savings and other benefits untapped.
However, in these challenges and many others, Keelvar customers can let our Intelligent Automation Bots handle most of the heavy lifting, freeing their human teams up for more important work. This is all possible due to the underlying Artificial Intelligence and Machine Learning layer in our Bots that help to improve the speed and the quality of sourcing events. But another impressive feature of these software agents is they are category “smart” and can learn and improve over time.
For example, within our Logistics Botline, Ocean Bot identifies and understands specifics about ocean freight sourcing that are different from Air Bot’s understanding of air freight sourcing. And both have the added benefits of improving cost savings, process compliance, and resource allocation.
What Do Sourcing Bots Automate?
In an earlier blog, we answered some of the top questions we get asked about our Bots and the areas that can be addressed by intelligent automation technology. For global businesses that procure logistics frequently, the Bots can support teams throughout the spot buying process, maximize ROI and drive value with speed and precision:
Through integration with Keelvar’s Sourcing Optimizer platform, as much as 90% of the work that goes into creating an event can be automated by the Bots with minimal intervention required from the buyer or event manager in the process. And with the product’s autopilot feature, your team can take advantage of automated supplier feedback across different rounds on price and non-price factors, encouraging a more competitive climate overall.
So there you have it: an automation solution that offers a structured, digitally traceable way of helping sourcing teams manage those hard to juggle off-tender requests, increase spot bidding competition and take on much of the busy work around events of varying sizes so that they can focus on making those crucial final award decisions – all packaged in one user-friendly optimization platform.
If you would like to see for yourself just what tasks these Intelligent Bots can handle, watch a demo of one in action in our webinar ‘Intro to Sourcing Automation and Its Bots’ on-demand here.