The procurement organization’s agility and flexibility in response to supply shocks and demand shifts can make the difference between commercial success and failure in volatile environments.”
McKinsey - Your first 100 days as CPO
Raw material markets have become more volatile. That doesn’t necessarily change buying processes, but serious quantitative backup is now required to prepare and explain buying decisions. The qualitative and periodic market research that buyers have traditionally been consulting is not up to the task.
Datapred's award-winning analysis and prediction engine uses AI to increase market visibility for raw material buyers, providing a robust rationale for their short-term tactical decisions and their long-term strategic plans.
Will market volatility increase or decrease? What are the main drivers currently affecting the price of my raw material, and how does that situation compare to historical trends? Should I expect prices to increase or decrease? In which range are prices likely to fall 3, 6 or 12 months from now?
For such questions on market dynamics, AI is a great complement to human experience - providing buyers with a robust rationale for their sourcing decisions, and helping them keep up with suppliers in the technology arms race.
Especially since in most cases, their companies already subscribe to the corresponding data streams.
With change happening faster and disruption being more frequent, raw material buyers risk losing credibility with sourcing strategies that become obsolete before they are implemented - comforting the stereotype that procurement is slow and unable to adapt.
Scenario planning and simulations are fantastic ways to position Procurement as a trusted advisor to business decisions. If oil prices increase 15%, which impact on polyethylene prices? If a 2020-style lockdown happened again, how would steel prices react?
Building upon its market analytics capabilities, Datapred lets you develop such category scenarios, and share them with business partners.