Procurement Adjusting to New Realities: Automation, AI/ ML

Global Procurement Summit 2021 organized by All India Management Association with support of Ministry of Finance, Government of India, the World Bank and the Asian Development Bank gave platform for discussion and exchange of ideas between senior officials engaged in public procurement at central and state public entities and the key bidding communities represented by manufacturers, suppliers, contractors and consultants. The key objective of the summit was to discuss Procurement as Enabler for COVID 19 Emergency response and come out with recommendations for the way forward.

One of the plenary sessions of the summit on “Procurement  Adjusting to New Realities: Automation, AI/ ML” chaired by Dr. Rajeev Kandpal, Joint Secretary and Chief Financial Officer, Government  e-Marketplace, Ministry of Commerce and  Industry,  Government  of India.  The speakers for this session included Mr. Mayank Mehrotra, Director, Deloitte India, Dr. Ashutosh Dutta, Senior Scientist and 5G Chief Strategist, Johns Hopkins University Applied Physics Laboratory and Ms. Eliza Niewiadomska, Senior Counsel, Public Procurement, European Bank for Reconstruction and Development (EBRD).

Beginning with the proceedings of the sessions, Dr. Rajeev Kandpal shared his insights on how GeM has leveraged technology for transforming Procurement scenario in the country. He stated that GeM is a one- stop online procurement portal for all govt. buyers that was launched on 9th August 2016 to initiate cashless, contactless   and paperless   procurement. He outlined the evolution of GeM and highlighted its achievements in providing exemplary services. Dr. Kandpal emphasized on some attributes like ensuring transparency and improving efficiencies that were leveraged through use of technology.

Describing  the  public  procurement framework  in the  country, Dr. Kandpal stressed  on the  presence of several guidelines  that  are referred  by an entity before  placing  a tender  and  stated  that  GeM has been able to develop algorithm through Artificial Intelligence that has helped in synchronous implementation of various orders and guidelines. He mentioned that automation has led to a substantial increase in the average bid participation, seller participation and categories of product. He further mentioned that  with the  introduction of GeM, the time  required  for Tender  creation  and  publishing has reduced  from 4-6 months  to just 1 day and the time required for registration  of new sellers and his offering has reduced  considerably  from 4 months to just 97 hours. In addition, he also mentioned that GeM provided special provisions for sellers of niche sector and it is commendable to note that GeM has now registered more 10 lakh sellers that are MSMEs, startups, women entrepreneurs, and other minor sectors.

From Top (L-R): Dr Rajeev Kandpal, JS & Chief Financial Officer, Government e-Marketplace, Ministry of Commerce & Industry, Government of India; Ms Eliza Niewiadomska, Senior Counsel-Public Procurement, European Bank for Reconstruction and Development; Mr Ashutosh Dutta, Senior scientist and 5G Chief Strategist, Hopkins University Applied Physics Laboratory (JHU/APL), USA and Mr Mayank Mehrotra, Director, Deloitte India

The next speaker for the session, Mr. Ashutosh Dutta talked about the“Supply Chain related security issues in 5G network”. During his presentation, Mr. Ashutosh Dutta  covered  various  topics  including  what  is a 5G network, what are some very common  security issues associated with it, how can one deploy a fully secure 5G technology for supply chain management and  how AI/ ML help  in detecting and  mitigating some of the security related issues. He defined a systematic approach for cyber risk assessment and management as a function of vulnerability severity, threat level, business criticality and exposure/usage to the risk among others.

Mr. Ashutosh also stressed on the diagnostic assessment for supply chain security network slicing that involves detection of the likely threats  such as impersonation attack against a network slice, side channel  attacks across slices, etc. and strategies  to mitigate  the  same.  He also highlighted the recent advancements that have been made in AI/ ML based security assessment and elaborated on the key points that should be considered for adoption of 5G and its usage. In conclusion, he stressed on the needs for a designing network that is more adaptable, resilient, and flexible to support emerging applications and importance of threat analysis and threat taxonomy in understanding associated risks and developing mitigation techniques.

Following Mr. Ashutosh Dutta, Mr. Mayank Mehrotra talked about the automation trends in the public procurement wherein he covered what could be the future of procurement, key interventions undertaken by the Government for leveraging AI/ ML based technologies in public procurement and some select case studies on how cost reduction be achieved from AI based procurement portal and how procurement team’s effort be reduced through automation.

During his presentation, Mr. Mayank Mehrotra emphasized on the four pillars of a resilient supply chain – namely Visibility, Flexibility, Collaboration and Control, and stressed on the need for digitization and enhancing the supply chain capabilities for adjusting to the new normal. He mentioned that virtual working and risk management were identified as the two primary considerations for a post pandemic world in 2020 Chief Procurement Officer (CPO) survey with focus on enhancing organization’s digital infrastructure to enable virtual collaborations. He also mentioned that  according  to CPO survey, cost reduction  is a top priority for any procurement leader  and suggested that  predictive  analytics will have  the  substantial  impact  on procurement over the next 2-3 years.

He further mentioned some key AI/ ML based initiatives undertaken by the government agencies in the country to overcome the procurement dynamics and explained benefits of these systems in terms of optimized order allocation, cost reduction, detection of fraud suppliers, secure payment systems, drone based inventory management and efficient contract management. Further, successful case studies on implementation of AI/ ML based interventions in supply chain management was also mentioned.

The last speaker for the session, Ms. Eliza Niewiadomska shared her insights on “New solution for Digital Procurement”. Initiating the presentation, Eliza stressed on a very crucial point that transparency is a key for any procurement system however procurement data is never made public. She highlighted some critical challenges about why eProcurement reforms are frequently unsuccessful and what can be done to improve them. She also outlined the strategy for achieving digital transformation in the public procurement and suggested unlocking procurement data using some IT systems like OCDS (Open Contracting Data Standard) and API for interoperability and decision- making.

Ms. Eliza mentioned that the EBRD is working with various governments of different countries on complete automation of various tendering activities with the help of AI and ML tools. While highlighting the benefits of OCDS, she mentioned that it provides one source of all procurement data for all users. In conclusion, she mentioned some Analytics and Monitoring tools that have now been developed for strengthening digital procurement systems and can be adopted by various developing governments for streamlining procurement during the difficult times.

Concluding the final session of the day, Dr. Rajeev Kandpal, Joint Secretary and Chief Financial Officer, Government e-Marketplace, Ministry of Commerce and Industry, Government of India along with the other panelists responded to some select queries raised by the audience and the chair delivered a vote of thanks.