MIT SCM Master's Candidates Andres Ayala and Ria Verma, along with their advisors Dr. Elenna Dugundji and Dr. Thomas Koch, are designing a chatbot that can aide procurement professionals' negotiations.
Of the numerous AI applications in supply chain management, supplier selection, risk resilience, and contract negotiation are often cited as offering the most potential for generative AI. The need for high volumes of text and data makes these areas particularly suitable for such applications. However, many organizations struggle to overcome the complexities of integrating generative AI into mainstream operations, one reason that projects often fail.
A pilot project at the MIT Center for Transportation & Logistics (MIT CTL) aims to overcome these complexities and demonstrate how targeted, real-world applications of generative AI can be successfully implemented in the procurement function. The project team is developing a chatbot for a leading pharmaceutical company with a direct and indirect annual spend of over $35 billion. The bot will help category managers negotiate more effectively with suppliers by providing comprehensive information on key questions like how prices are trending for specific materials.