Case Study Summary : Material Sourcing Lifecycle Automation for an Industrial Manufacturing Company
The document outlines how an AI-powered platform from Settyl automated the sourcing lifecycle for a leading industrial manufacturer, resulting in significant improvements in efficiency, cost savings, and strategic focus.
The Challenges before AI Implementation
The manufacturer's procurement team faced several challenges due to manual and fragmented processes:
- Manual Requisition Handling: Sourcing managers spent hours every week manually consolidating material requisitions that were sent via email and spreadsheets from 20 global plants.
- Time-Consuming Negotiations: Price negotiations were conducted through lengthy email chains and phone calls, leading to project delays and inconsistent pricing.
- Limited Vendor Discovery: The team primarily used an existing list of suppliers, making the discovery of new, more competitive vendors an inefficient and reactive process.
- Subjective Decision-Making: Vendor selection was often based on existing relationships rather than on a data-driven analysis of market rates and performance.
- Invoice Errors: The accounts payable team had to manually check every invoice against its purchase order, a process where mismatches were common, causing payment delays and a high risk of overpayment.
Lasya Enterprise AI Solution Key Components
Settyl's platform introduced an autonomous workflow with the following features:
- Automated Requisition & Sourcing: The AI platform automatically ingests and consolidates requisitions from all plants, intelligently grouping materials to create optimized sourcing events.
- Autonomous Negotiations: The platform's AI engages with vendors independently through chat and email to conduct real-time price negotiations without human intervention.
- Proactive Vendor Discovery: A dedicated agent continuously scans the market for new suppliers and performs automated rate comparisons.
- Data-Driven Contract Awarding: An analytics engine provides clear, data-backed recommendations for vendor selection by comparing bids on price, lead time, and performance.
- Automated Invoice Validation: The AI performs an instant three-way match between the vendor invoice, purchase order, and rate contract to identify any mismatches for review.
Business Impact & Key Metrics
The implementation of the Lasya Enterprise AI solution yielded the following transformative results:
Sourcing Cycle Time Reduction
The time required to complete a sourcing event was reduced by 75%.
Metric Before AI Sourcing Cycle Time : 12 Days
After AI Sourcing Cycle Time : 3 Days
Key Performance Improvements
- Direct Cost Reduction: 12%, which equated to over $18M in annual savings.
- Faster Sourcing Cycle: A 75% reduction in the sourcing cycle, from 10-12 days down to just 2-3 days.
- Invoice Error Reduction: An 87% reduction in invoice errors, with the mismatch rate dropping from 15% to less than 2%.
- Increased Strategic Focus: Managers were freed from tactical work, allowing 85% of their time to be refocused on high-value strategic initiatives.
- Expanded Vendor Pool: A 20% increase in new vendors, with over 50 new competitive suppliers onboarded in the first year.
- Vendor Engagement: The system provided 24/7 vendor engagement through autonomous AI chat and email.
