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Increase Your Part Risk Intelligence with the Power of AI

August 1, 2023
Brian York

The pandemic was perhaps the biggest wake-up call for direct materials sourcing teams. As supply and demand shocks reverberated through supply chains, teams scrambled to secure parts through whatever means necessary. Most of the time, they paid a premium and had to take extraordinary measures just to get what was needed.

What if more direct materials sourcing teams had access to part risk intelligence platforms? They may have been able to better shield their companies from disruptive events. It’s just a matter of time before new supply chain shocks hit, and your part risk intelligence process will be tested once again. But this time can be different.

Today, procurement professionals are still trying to manage and optimize their spend with disparate tools and disconnected market intelligence. This is exacerbated even more by the collaboration gap between engineering design and procurement execution. When addressed, this collaboration ultimately ensures the best part selection.

From sourcing from failing suppliers that impacts sourcing resiliency to dealing with unexpected cost fluctuations during market shifts, the way you manage part risk can have a big financial impact on your organization. That’s where part risk intelligence platforms can help.

Part risk intelligence platforms that tap into the power of AI to aggregate and contextualize your parts spend can concisely augment a global commodity manager’s ability to make the best sourcing decisions. That’s because advanced analytics make up the core of procurement platforms and provide actionable contextually blended insights.  

These insights are geared toward prioritizing value drivers and prioritizing parts that have the best spend and sourcing resilience opportunities. For example, sophisticated platforms provide comprehensive qualitative insight awareness such as pricing transparency to quickly compare the current pricing against market pricing. With hundreds of data sources and billions of part data points, platform users can quickly understand the corresponding lead time, inventory trends, part age, sources, and even alternate sources—all from a single, comprehensive view.

Here's a deeper dive into some of the features that sophisticated AI-powered direct sourcing platforms can bring to your part risk intelligence strategy:

Lead time awareness – A lead time feature at the manufacturer part number (MPN) and part series level can provide insights into the base part source ability the MPN is built upon.

Monitor part age and years to end-of-life – Take a quick glimpse into how old or how long a part has been around versus its estimated time left before it reaches end-of-life.  

Procurement performance – Compare customer average percent discounts from best distributor prices to obtain a normalized benchmark perspective of purchasing power and negotiation leverage against the community and even set savings goals down to the MPN level.

Track supplier health – Assessing part risk also means evaluating the reliability and financial stability of suppliers. If one of your suppliers experiences financial stress or goes out of business, it can cause supply chain disruptions and production delays. AI-powered platforms can even suggest the best alternative suppliers.

Keep tabs on inventory – Understand how inventory levels are trending so you can make decisions about sourcing before sourcing constraints affect your business.

If you’re still relying on traditional tools to navigate part risk, it’s time to update your part risk intelligence strategy. By incorporating hundreds of data sources and contextualizing billions of part data points, direct materials sourcing platforms powered by AI provide real-time intelligence and insights you can’t possibly squeeze out of a spreadsheet.  

Many manufacturers have yet to make the leap to these platforms, so there’s a huge opportunity right now to get ahead of the competition in a very strategic way. An investment now will not only pay immediate dividends but will also set you up longer term to improve margins and add to top-and-bottom-line growth. Why wait?

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