ChatGPT in Procurement — Revolutionizing the Norm

Limitationsof ChatGPT

1. Answers are not always correct

ChatGPT is trained to answer your questions that feel right to you. Thus, it can trick you that the output it made is correct. Many users discovered that ChatGPT can provide incorrect answers. Thus, you should always remember that it cannot always be depended upon to provide accurate findings.

2. It is not completely trained

ChatGPT is still undergoing its development. The creator of ChatGPT, OpenAI, suggests that all contents that the AI generates should be consulted and examined by professionals or existing facts available on the internet.

3. ChatGPT lacks insights

An article by The Insider quoted an academic that says that academic essays generated by ChatGPT lack insights about the topic. Although it may exhibit high grammar qualities and sophisticated ideas, it lacks insights.

Best ChatGPTPlugins

Before we list down the best plugins for ChatGPT, let’s first define what are plugins.  Plugins are additional modules or extensions that can be added to a software or platform to enhance its functionality and provide users with extra features.

To simplify, these are extra tools you can add to a program to make it better and do more things. In the context of ChatGPT, plugins are special add-ons that give the language model extra abilities, making it even more versatile and capable of handling different tasks and topics.

Now that you know what are plugins, here are some of the following plugins for ChatGPT:

1. Link Reader

Link Reader allows you to retrieve information from a specific webpage. However, its functionality extends beyond just specific pages.

For instance, if you have a broader query like “I need to get updated on the latest trends in procurement, can you provide a list of relevant articles? LINK: https://www.procurementmag.com,” it will gather procurement-related articles not only from ProcurementMag but also from other relevant sources.

Additionally, Link Reader proves valuable in locating recent procurement case studies, the latest updates on supply chain management, and much more. It can also sift through various document formats like PDFs, PPTs, images, Word files, and others to find the relevant information you seek.

Furthermore, it seamlessly integrates with other plugins, enhancing its usefulness and allowing for a more comprehensive procurement information-gathering experience.

2. Prompt Perfect

Prompt Perfect is an excellent ChatGPT extension that helps users create ideal prompts for the AI chatbot. If you struggle to write effective prompts, Perfect will be a huge help.

Just start with “perfect” before your question and the plugin will rework the prompt behind the scenes, making it detailed and precise for ChatGPT. This ensures the AI chatbot gives you well-informed and specific answers based on your prompt.

3. Speak

Speak can be an invaluable ChatGPT plugin for procurement professionals who work with other countries. As the name suggests, Speak allows you to learn how to say anything in different languages, making it an excellent tool for negotiating with people from other countries.

Apart from translation, the plugin offers assistance with verbs, conjugations, nuanced grammar, and more. Just type your language query, and ChatGPT will provide a prompt response, making it a powerful tool to enhance communication and understanding in international dealings.

Is ChatGPTFree to Use?

ChatGPT is completely free. This is due to its “research preview” time to provide feedback on the responses of the AI to improve it better.

The subscription plan for ChatGPT, ChatGPT Plus, is now available for a monthly fee of $20.

By subscribing to this paid plan, users enjoy uninterrupted access to the service even during peak usage times when the free version may be at maximum capacity. Additionally, ChatGPT Plus offers quicker response times compared to the free version.

Subscribers of the Plus plan receive priority access to new features and enhancements that OpenAI introduces, including early access to the latest updates like GPT-4. Furthermore, Plus users will have priority access when ChatGPT plugins are launched in the future.

ChatGPT as a Catalyst For Achieving Sustainability

In the past few years, many companies shifted their focus toward sustainability, aiming to reduce their environmental impact without sacrificing operational efficiency and effectiveness.

At Procurement Tactics, we conducted a survey among our email subscribers to inquire about their sustainable procurement practices. Among the 500+ respondents, 56.4% confirmed that their organizations have established formal policies regarding sustainable procurement. This substantial majority underscores a robust dedication to sustainable practices among more than half of the participants.

The surge in companies adopting ethical and sustainable procurement methods has been notable over the past few decades. Artificial intelligence, with its diverse applications across various industries, showcases considerable potential in advancing both procurement and sustainability initiatives.

Utilizing ChatGPT and other AI models empowers procurement teams to capitalize on automation, leading to quicker processes. However, the ascent of artificial intelligence has ignited debates on ethics and system bias, causing reluctance in its adoption.

While acknowledging these concerns is crucial, embracing ChatGPT can prove valuable in procurement, enhancing efficiency, and ensuring sustainable and transparent supply chains.

In 2023, a survey by Deloitte, involving 350 senior procurement leaders from 40+ countries, revealed that 72% successfully elevated their ESG (Environmental, Social, and Governance) efforts while maintaining operational efficiency.

Expanding on sustainability, ChatGPT offers a strategic advantage. Promoting automation in procurement processes, not only accelerates tasks but also helps in making environmentally-conscious decisions. ChatGPT can assist companies in achieving sustainability goals by optimizing resource usage, reducing waste, and fostering transparent practices within the supply chain.

The adoption of ChatGPT aligns with the broader trend of using advanced technologies to balance efficiency with ethical considerations, contributing to a more responsible and sustainable approach in procurement practices.

Using ChatGPT in The Supply Chain

In today’s business landscape, the integration of cutting-edge technologies like ChatGPT and machine learning is revolutionizing traditional supply chain management.

At its core, ChatGPT learns from the extensive datasets you provide, enabling it to produce coherent and contextually accurate responses. Picture it as your digital assistant, automating tasks like procurement, and logistics, and even diving into data analysis and customer service.

However, while the potential seems limitless, it’s crucial to acknowledge the limitations. It may not be able to seamlessly address every intricate aspect of the entire supply chain. Additionally, occasional inaccuracies or misunderstandings may arise due to discrepancies between prompts and the model’s responses.

To know more about the role of ChatGPT in enhancing supply chains, read our article about ChatGPT in the supply chain. The article also highlights the ways that you can use ChatGPT to enhance your control in your supply chain.

Using ChatGPT in Global Procurement

ChatGPT and other generative AI have become a valuable tool for optimizing processes in many industries including procurement. However, when it is used on a global scale, there must be ethical considerations that professionals must follow. 

Although ChatGPT in global procurement presents a huge opportunity for making processes more efficient and faster, procurement teams must be responsible with its utilization which is paramount in protecting not just the company and its stakeholders but also their customers. 

Read our eight crucial tips in our article about chatGPT in global procurement to know the right and ethical implementation of ChatGPT in the global setting.

ChatGPT Policy in Procurement

ChatGPT plays a huge role in procurement by offering several features that can speed up the procurement process. Its smart conversational interface enables procurement teams to communicate effectively, facilitating the streamlined management of procurement tasks and negotiation processes.

As ChatGPT and other generative AI tools continue to become normalized in all workplaces, procurement professionals should exercise responsibility in utilizing these tools. 

That’s why we made an article on how to create a ChatGPT policy in procurement. Reading the article will walk you through developing a policy on how AI can be used in your procurement process responsibly and effectively.

Using ChatGPT in Inventory Management

Nowadays, ChatGPT is being used in almost all industries. That’s why it’s not surprising that many businesses use it to manage their inventory levels. It serves as a valuable tool for managing inventory effectively, using AI-powered conversations to cut costs and improve efficiency. 

Through natural language processing (NLP) and deep learning, ChatGPT swiftly analyzes large data sets to check and control inventory issues and enhance the procurement process.

To give you an example, Amazon, the e-commerce giant relies on AI to enhance warehouse processes and optimize its supply chain management. Prominently, it utilizes robots for selecting and packing items for delivery. This process is further refined through route optimization, ensuring the choice of the most efficient path that minimizes both carbon emissions and transportation costs.

Furthermore, ChatGPT still faces a lot of challenges in inventory management such as data privacy issues, scalability, limitations due to external factors, lack of industry-specific knowledge, and poor precision. Nonetheless, these challenges can be overcome with the right strategies and processes. To learn more about addressing these challenges, read our article about ChatGPT in inventory.

The Role of ChatGPT in Supplier Communication

Smooth communication with suppliers is crucial in the procurement process, requiring good management and communication skills. AI chatbots, like ChatGPT, can step in to make things easier. They fit into different parts of supplier communication, like handling contracts, managing vendor portals, dealing with purchase orders, and more. 

Picture them as helpful assistants automating routine tasks, giving quick updates, and even helping in negotiations. ChatGPT makes supplier communication more efficient and streamlined, making the entire procurement process smoother.

However, ChatGPT still has its own downsides when utilized for supplier communications. Some of the problems include security risks, the ability to handle ambiguous queries, industry tailoring, system integration, and more. Read our article about chatGPT in supplier communication to know how to mitigate or address these problems effectively to help you utilize ChatGPT effectively for supplier communication.

ChatGPT Roles in Negotiation

Another vital part of procurement where chatGPT can be used is negotiation. However, you may wonder, “How can chatGPT assist procurement professionals in negotiation?”

Well, it can assist in finding information about the other party that will allow you to have a better strategy once you are at the negotiation table. 

For example, Picture yourself entering talks with a potential supplier. ChatGPT can quickly gather data on market prices, supplier reviews, and industry standards, streamlining your preparation and enabling you to enter negotiations well-informed.

There are several benefits to utilizing ChatGPT during negotiations. For starters, it provides a new perspective by analyzing data and offering insights you might have yet to consider or think about. Moreover, its ability to simulate human conversation assists in preparation, enabling you to anticipate potential responses from the other party.

For example, ​​you’re negotiating a contract with a big client. ChatGPT can help you analyze past and current industry reports to uncover your client’s priorities and potential concerns. With these insights, you can create a negotiation strategy that addresses their specific needs, increasing the likelihood of a successful agreement.

However, you must know how to make good prompts for ChatGPT to help you effectively with your negotiation strategy. Making poor prompts will consume lots of your time explaining to chatGPT what you want. 

For more guidance on creating successful prompts, refer to our comprehensive article on ChatGPT negotiation prompts.

Procurement Expert’s Advice on ChatGPT

For this article, we asked an experienced procurement expert to share her insights to help answer common questions about ChatGPT in procurement.

Featured Download: Enjoying this article? If so, click here to accelerate your career:
Here is the ChatGPT Negotiation Toolkit to help you prepare your upcoming negotiations.

In Conclusion

With the continuous growth of AI, ChatGPT and other AI tools will continue to be integrated into many business activities like the procurement process to help streamline the procurement and supply chain operation.

ChatGPT and other AI tools are still in their early stages. Yet, it has greatly changed the business landscape and how we work nowadays. We cannot deny how helpful AI can be in our work.

However, we must take note that because it is in its early stages, it still has a lot to improve. Thus, you still need to fact-check whenever you are going to use ChatGPT and other AI tools as a source.

Moreover, AI is continuously being developed, and soon, all businesses will adopt it and all of us should too. We just need to keep in mind to use it carefully, ethically, and solely for growing the company and enhancing your skills in procurement.