As companies look across their supply chains, especially the procurement and sourcing of direct materials, there is a deep chasm preventing teams from getting the information they need to make the best business decisions. Keith Hartley, the CEO of LevaData, has named this massive gap the “decision abyss.” In a recent podcast with Spend Matters analyst Bertrand Maltaverne, Keith explained why companies struggle with the decision abyss, how advanced technologies like AI are needed to address this challenge, and how LevaData is helping overcome this obstacle.
To watch or listen to the podcast, please find the recording here.
Data provides the foundation for decisions
As a recent Spend Matters Vendor Analysis detailed, LevaData’s supply management platform is anchored around design for supply with a current core emphasis on sourcing direct materials for electronics manufacturers — though they intend to expand to other categories, such as resins. LevaData focuses on supply and supplier data management, presenting users with information that helps them reduce costs and increase supply resiliency. The company’s solution addresses a decades-long issue summarized by Keith: “Oftentimes these teams are tasked with reducing cost or ensuring supply continuity or de-risking elements of their supply chain. But these three functions — procurement, supply chain and product teams — don’t have a common language and a common way to collaborate and ‘attack’ the problem.”
This gap that the lack of a common language causes is, as Keith calls it, the decision abyss. To cross it, you need properly contextualized data. “Data is at the heart of the decision abyss problem,” he explained. “So, you need to blend more data together to get a better picture of the situation.” Bertrand clarified how companies woke to the need for more data with an example of how a car manufacturer had struggled to sell cars worth tens of thousands of euros because it was unable to source a chip that would have cost next to nothing. In a previous analysis of the shortage, Bertrand explained that the inability to source chips was originally caused by the ‘omnicrisis’ of the coronavirus pandemic but exacerbated by the lack of insight car manufacturers had into their supply chains. If they had a clearer idea of how their chips were sourced, it would have been easier to navigate the fluxes of demand by pivoting between suppliers.
The conversation then turned to how technology, especially AI, is critical to aggregate, blend and contextualize data. According to Keith, AI is key to solving the data abyss. However, it will not replace the human element of procurement: “The underlying fundamentals that make AI work is good, clean, contextualized data, which is where LevaData has spent the entire company’s history on making sure we can quickly synthesize many, many disparate data sources, blend them, and then present them in a graphical user interface that allows people to actually look at it, infer from it, and make decisions.” AI augments the power of human procurement teams, providing a foundation for different functions to traverse the decision abyss.
Fixing future frustrations
Since the onset of the coronavirus pandemic, the world of procurement has been bouncing from one supply chain disruption to another. Other disruptive events, such as the invasion of Ukraine and the rise of global interest rates indicate that supply chain shocks will continue to be an ongoing dynamic.
However, the outlook of this constantly shifting environment is not necessarily doom-laden. When Bertrand moved the conversation to the ways LevaData’s strategic use of AI will impact procurement’s actions in areas like ESG, Keith noted that: “What is different now is really the admission that we can do something about these supply chain shocks.” Before Covid-19, organizations across the board had failed to properly invest in shoring up supply chains and direct procurement in general. The fragility of these systems became obvious during the pandemic, and these inspired new rounds of investment in procurement technology that generates cost savings and ensures supply continuity.
Bertrand agreed, noting that: “Many organizations learned it the hard way … And I think the real challenge is risk, cost and the product launch, but it’s also about resilience, building antifragility and getting the outside-in in terms of data, putting that into context with your own data and your own view of the world.” The proactive use of AI can preemptively chart courses through chaotic times, saving companies time, money and opportunity they would have lost by reacting in a more improvised manner.
Although all these big ideas are exciting, the conversation returned to LevaData’s core focus: sourcing components for electronics. LevaData blends and contextualizes data, turning insights into action. For example, a procurement manager can track metal prices and machine rates to estimate what custom parts will approximately cost and reach out to recommended suppliers with a single platform. In the future, it intends to gather similar insights for plastic resins. For LevaData, “the future lies in knowing more about any given part or ingredient than anyone else on the planet.” In short, the company is on a mission to build out its core platform and continue to expand its capabilities based on the insights that supply chain, procurement and product teams need. It will help companies tackle the decision abyss, bringing visibility and accelerating decision making, even in a volatile and sometimes chaotic world.
To watch or listen to the podcast in full, access “Addressing the Lack of Data Visibility” here.