Direct materials procurement has traditionally been conducted entirely within ERP systems, isolating it from other enterprise functions and hindering operational transparency and efficiency. However, with the maturity of AI and data science programs, cloud development platforms are enabling new capabilities and ERP's stronghold over direct procurement is coming to an end. The advantages of using a new type of solution for direct materials procurement include sophisticated demand forecasting, production scheduling, and inventory management, as well as traditional procurement objectives such as spend analysis, supplier management, sourcing, and optimization. Moving from an ERP to a fully integrated direct materials platform is a significant step change in operational procurement technology, comparable to the challenge electric cars represent to the internal combustion engine. While it may seem fanciful to suggest ditching an ERP system, next-generation solutions are designed to do a better job in today's complex supply chain environment and are not hampered by infrastructure constraints.
