The Future of Procurement with Samah Mahdi

Made with speech-to-text software, so a few words may be off.

0:00You're listening to the Contract Heroes podcast, your one-stop shop for all things contract management. And now here are your hosts, Marc and Pepe. Hello everyone, and welcome to another episode of Contract Heroes. Today, joining us, a professional with 15 years of experience in the procurement space, Samah Ali. Samah, thank you so much for joining us. Thank you. Before we f- flip things over to Pepe, to give us a little bit of more information on what we're gonna be chatting about, we'd love to have you do a quick introduction on yourself and tell us a little bit about your background. Oh, of course. Uh, thank you for having me on the podcast. I am excited to be here and share my insight on the digital transformation, including opportunities and challenges. About me, my name is Samah Mahdi Abdalla. I'm a procurement and supply chain professional. I have 15 years of experience in this field, procurement, logistics, supply chain management. Career-wise, I have led strategic sourcing initiatives.

1:01I have managed, uh, complex supply chain operation, driving cost optimization strategies. Uh, I am also currently a board member of a university of supply chain and logistics. Um, my experience spans in multiple industries. I am working in an FMCG company, a dairy production company. Before that, I have done logistic industry, uh, retail as well. That's it, I guess. Um, I am passionate about technology, including AI, robotics, to optimize the procurement and supply chain, and, um, I am here to share my insight. Thank you for having me again. That's awesome, and that's exactly the topics that we will cover in this nice chat, Samah. And as you know, AI has been really all around the place since two years, three years ago. Mm-hmm. And now it's getting even bigger. Like one day ago or, or two days ago, there was a big boom with the DeepSeek thing. Mm-hmm. There was a lot of shares tumbling.

2:07AI, it's focused to help companies to become more efficient in different kind of internal departments, in different industries. And we would like to kick off, uh, this chat, Samah, on how do you see AI transforming traditional procurement processes, right? And what it, it really brings. And thinking about AI, not just like, you know, LLMs and OpenAI. Mm-hmm. But actually- Mm... in the operation side of a company. Mm-hmm. Right. So what is AI? It involves adopting the technologies and artificial intelligence automation to replace a manual process. Uh, we make the process smarter. We have interconnected systems with each other. This is AI. It's about the intellectual automation of the process itself.

3:02Um, that said, so from procurement or supply chain, uh, part, and I would like to take examples of AI, how do I transform, uh, transform, uh, current processes into smarter and intellectual systems by examples. Uh, for example, in procurement, uh, being a procurement professional, I can take an example of, uh, for example, a productive analysis for the forecasting. We work with forecasting. We buy services. We buy items. So, uh, if I have a predictive forecast for our warehousing service, for example, how many pallet space I need, uh, how many movements I am going to use, um, how many number of trucks am I going to ship out of that warehouse, we can include the transportations, how many containers do we have in a shipment, that would help us a lot. If I have a button, if I have a system that will make the automatic AI-generated forecast, it will help me see past, it help, it will help me see future, it will help me see current. And then what's the benefit of that?

4:05For example, for a warehouse, I will avoid the overstock, I will avoid the out of stock. I will have the accuracy even affecting the production and the planning. So that's an example of, uh, AI into procurement and into supply chain. It has a lot of benefits, mainly repetitive task, we turn them into an automatic task. And then the, the benefit, of course, is, uh, the other part of your questions, what are the benefits? The benefits is that you will have, um, less transactional tasks on the procurement, uh, professionals, and you will free their time to look at the strategic part of it. You will have less mistakes. You will have... We, your organization will be ready for the risks, so you will enable faster data-driven, uh, decisions. There are a lot of, uh, benefits to AI incorporation in our, uh, daily, uh, procurement operational and supply chain operational. And that's great, Samah.

5:01And can you give us, like, one practical example on those- Mm-hmm... transactional tasks that- Mm-hmm... people need in procurement take a lot of time in how it looks now, uh, when- Mm... it's taken over by AI? Yeah. So we have given the example of forecasting. Uh, we can take another example of, for example, supplier performance management, for example. You have a supplier, he's providing you, for example, a delivery service, a distribution, cross-border service. So if you are doing it in a manual way, Excel sheet calculations, it will take a lot of time. There will be errors. Um, your professionals will be busy with manual tasks. But if you have the tool that will be measuring your supplier performance, like delivery accuracy, on time in full, capacity fulfillment You will have better control over the supplier KPIs. You will be able to measure how the supplier is performing to you.

6:01So you can say, "This is a good supplier, this is not a good supplier," based on decisions, based on numbers, based on, uh, outcomes that are generated by systems. You... That also is going to have another benefit that if we are talking supplier that's doing delivery, you will have better delivery time, you will have better compliance, you will reduce your cost. So I guess that's a good example of incorporating AI into procurement operations, uh, where you can, um, closely monitor the supplier performance. That would help you also in your discussion and your negotiation, and supplier selection in the future as well. Great. No, a- and I think those are, you know, two very important areas, right? Forecasting and, and the supplier performance management, uh, two important areas where in the past we've, like you said, right, we've, we've seen a lot of, of manual inputs needed there. And, and I think that some organizations, hopefully most, are, are starting to look to software to, to help to streamline this process.

6:58But I also think, obviously, in the past couple of years, right, these software vendors are also starting to incorporate AI into these processes so that we can even go above and beyond this and, and be even better at these tasks. When we look into the, the future with AI, I mean, how quickly do you think that... You know, I know that some of this is here, right? But we were talking before we, we started recording the session with, uh, some of the advancements that have happened in AI, right, in the past couple of weeks. Are you seeing, you know, the types of different things that AI are helping with, you know, evolving at a faster pace, uh, you know, recently over the past six months or so? Definitely. Definitely, definitely. Companies are now, uh, going into the direction, into the digitalization, and they are realizing the benefits of that. And then you will be seeing, and we have been seeing, and you will be seeing like a revolution in the way, uh, the processes are being handled and the ways of working. That will, of course, uh, reflect in the efficiencies and the, the deliverables of, uh, those, uh, different processes. There are challenges, yes. Uh, there are things to be taken care of before that.

8:02Uh, however, you see, we can see that, uh, all different, um, uh, sectors are looking into AI and incorporating it into their, uh, daily operational activities. Yeah. Right. And, well, let's also talk about robotics, and I think a lot of people might confuse robotics with AI. Mm-hmm. So before we talk about how robotics can help the procurement department, what would you say is the main difference between each other, Sama? So robotics and, and AI, both of them come under the digitalization wave that's happening now. Uh, but if we speak robotics, maybe we can, uh, say that it's the physical automation of the supply chain, while AI is the intellectual automation of the supply chain. AI maybe in simple words we can think software, tools on the computers, programs. But when we speak robotics, it's the physical automation.

9:01And what comes into mind mainly if we look at the whole supply chain, we buy products, we store them in warehouse, and then we distribute them, and we move them. So the main part that would include robotics would be warehousing and also the transportation part. So we can speak robotics in terms of examples I can give you. Um, robots who are operating inside the warehouses, uh, AGVs, automated guided vehicles, forklift without operators. We have a lot of examples for how do we incorporate robotics into warehouses. If we speak transportations, we can maybe speak drones, uh, the small, uh, planes that deliver, uh, products or packages. We can speak electronic vehicles, uh, without drivers. Uh, so this is the difference between robotics and AI. Robotics is something physical that you incorporate in the supply chain, which, uh, will help, uh, moving the products within, uh, physically.

10:01But AI is the intellectual automation part of it. And how would you say organizations can, you know, ensure the smooth integration between both, between AI and robotics? Talking about procurement, of course. No, of course. So this is a change. So you have a current way of working in your organization, for example, traditional way of doing it, manual way, and you want to transform it into digitalization. Uh, mainly, like I can talk general, what do we need to do in order to do that? First thing, we need to assess the current system, what do we have now, and address the gaps. What do we have and where are the gaps? And then we want to see what, where do we want to go. So that's the vision with the AI. Uh, mainly what I see, how do we do that, we need to engage the stakeholders. So as procurement, your question is as procurement, we cannot do that as a single function. We need all our stakeholders to be engaged. And who are the stakeholders?

11:02We will include IT people, we will include internal business people who are using the product or the service that we are buying for them as a support function, and mainly also we will include suppliers. And while talking now, I have one example that, uh, came into my mind, uh, regarding the change. In my current company, the company that I work for, we have a new system. It's used for supplier relationship management. Uh, that system is supposed to be a portal. That's a kind of AI, of course, digital transformation for procurement. It's a kind of a portal where suppliers and internal stakeholders can log in and where all the communication happen. Like supplier can see his invoices, we can see the orders, we can see any claims. Uh, any communication, uh, there instead of going into, like, separate emails and separate Excel sheets. That's a transformation, and what are we doing as procurement in my current organization?

12:01First thing, we are aligning the stakeholders who are going to use the system. That's step number one if we want to summarize it. Step number two, we need to provide training to the users who are going to use that platform or that system. And of course, we have phase, uh, phases in the rolling out. You need alignment, you need the buy-in in order to transform, otherwise your transformation will not be going smooth. Yeah, so this is how do you ensure the smooth integration. Yeah, and I think that that's implementing anything, right? Implementing any piece of technology, you need to make sure- Exactly... that there's phases to it- Right... and that the team is... That you're gaining, right... Just because this application or the AI that the team is using is going to help you in your day-to-day doesn't mean that, one, it doesn't need to be trained. Right. Two, that it, it doesn't need to be... The tasks that it's completing, you know, out for the first initial phase need to be reviewed, and the team also needs to understand how to use that, that AI to, to be able to leverage that. So I, I think that it's just like anything else, right? I, I, I think that the, that we need to make sure that we're rolling this technology out properly. Mm-hmm.

13:02And what does the future look like for this functionality? And, and I think we can talk long term- Mm-hmm... but as we've seen over the past couple of weeks, I mean, it's taking leaps and bounds and just- Mm... it's expediting everything, right? With- Exactly... with how quickly these things are getting set up. Exactly. Exactly. Exactly. So the future, if I close my eye and, like, um, imagine how is it going to happen with all AI and robotics integrated in the procurement and supply chain, maybe we will be having warehouses that operate by themselves, pallets move by themself, picking is done by robots, uh, no human interaction needed, uh, warehouses operating 24/7, uh, no errors, uh, easy to scale up and scale down, packages are delivered automatically. You don't need drivers. You don't need trucks. Um, what else?

13:54If we speak, uh, AI, maybe we can have automatic contract management, like contract, uh, will come automatic, contracts will be, uh, terms and conditions will be reviewed by AI. We have, like, digital procurement assistants who can speak to supplier instead of having, uh, procurement speaking to suppliers. So this is the future dream of procurement. And what would you say, just to close this interesting chat, Sama, which are the main challenges that you seek- Oh... in the short term in order to get to that future utopia? If you wanna call it like that. So challenges. Now we back to real life, of course, from the dream to real life. Biggest challenge is the people. It's the resistance to change. So you have people who are used to a certain way of working, who are in their comfort zone, and you will come, and you want to change the way of working. You want to change the system. You want to change the process.

14:55So, uh, that's a challenge, a people challenge, and one of the biggest challenges and the, the challenges that we do face in our daily life, in our change projects. That's a challenge, and maybe if you would ask me how do we address that challenge, maybe we can try to build a culture of innovation. Like, this is the benefit. This is the future. This is how you are going to benefit from that. Uh, that's one of the challenges. Another challenge also from the day-to-day life, if you want to change, if you want to implement something digital, uh, I can think of the cost, of course, the implementation cost because you will have to buy the robot. You will have to buy the electronic truck. You will have to buy the system. You will have to pay for that AI assistant. And procurement, of course, need to come up with business case or demonstrate the return of investment to the management and to the stakeholders to show, uh, what benefits are we going to get because that's an investment at the end.

15:56Uh, maybe also we can run, uh, small pilot projects. That's a second challenge. A third challenge that come into my mind, uh, may be, um, the data quality issue, and I'm reflecting on a s- a project that I'm working on now. Uh, I'm trying to change, uh, one way of working into a digital, and one of the challenges that I am facing and bumping into is, uh, uh, data quality because AIs, robots, and systems, they need clean data and clear data in order to operate. So if you are not able to provide them the transparent, clear data, the current status, they will not be able to operate and function the way that you need. Uh, so I think these are the main top three challenges when you want to implement AIs and robotics into the procurement and supply chain. No, I, yeah, and I think those are, are some great points. And, I mean, like anything, right? Implementing any piece of technology, whether it be AI or software or, or something else, I think you always have these challenges. Um- Always... and, and, you know- Like forever. Yeah.

16:57And maybe, maybe one day soon we'll see AI helping with these challenges instead of- ... kind of being the, the hurdle that we need to get over. But I think this is a, a great point to, to kind of jump off from. And, and Sama, I think we'll have to catch up with you in a couple of months and see if any of this is coming to fruition- Of course. ... and, and where everything is. Oh, we will have to. But, uh- Of course. Sure... uh, well, Sama, thanks so much for joining us. We really appreciated, uh, you coming on and chatting with us. Thank you so much. It has been a fantastic discussion. I really enjoyed it, and, uh, I hope that our listeners, uh, find this discussion valuable and they can apply, like, the ideas in their own work. Uh, I love to connect again for future conversation, and I am looking forward to continue the dialogue. Thank you so much for having me. Absolutely, and thanks everybody for listening to another episode of Contract Heroes. This episode of the Contract Heroes is sponsored by Koho Consulting.

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