A Detailed Insight into ChatGPT Prompts for Procurement

Understanding ChatGPT Prompts

Before we delve into the various prompt’s procurement professionals can provide ChatGPT, it is essential to understand some basics related to this platform.

ChatGPT is an AI platform driven by Natural Language Processing algorithms. The complex network of algorithms built into the platform are capable of interpreting human textual and speech data to provide valuable insights when prompted.

ChatGPT prompts are an essential part of obtaining accurate information specific to your requirements. While users can be flexible with their prompts for trivial use, the professional need for ChatGPT requires skilful prompt input.

As you read further, you will understand in detail the various components of ChatGPT prompts specific to the needs of procurement.

ChatGPT Prompts for Procurement

Procurement is an umbrella term for the process of acquiring resources required for the operational purposes of a business. From machinery to raw materials, the process of obtaining everything required to run a business is simply referred to as procurement.

Procurement is an ongoing process that requires a meticulous approach in order to effectively and efficiently operate your business. It is an integral part of a business’s supply chain structure and is managed by professionals who carry an intellectual set of skills and expertise.

However, with the advancements in technology, procurement professionals along with their skill and expertise can now make use of AI for added efficiency and strategic decision making.

Procurement Functions and How to Provide Accurate Prompts in ChatGPT

Procurement encompasses a set of various functions that enable professionals to source required resources in a cost-saving and time-efficient manner. These functions are carried out with the use of certain tools and a combination of personal expertise exhibited by procurement professionals.

This particular approach to procurement has been followed for decades. However with the incredible innovations in AI technology, procurement managers can now use tools like ChatGPT to aid their operations.

In this segment, we list out the various core functions under procurement and how users can effectively utilize ChatGPT to derive exceptional information.

Procurement core functions and ChatGPT prompts:

·????? Resource Analysis

·????? Purchase Requisition

·????? Assessment & Selection of Vendors

·????? Negotiation of Terms & Pricing

·????? Sourcing Analysis

·????? Supplier Relationship Strategy

·????? Contract Management

Before we proceed further, elaborating each function and the ways to prompt on ChatGPT, let us first help you understand the most effective format to prompt on ChatGPT.

[Within brackets mention all key inputs related to your current business needs, describe this section as accurately as possible] Followed by your command, that is your question asking what your specific requirements are.

Example: Contract Management Related Prompt [Company Name, Your Job Designation, Product or Service in Negotiation, Duration of Previous Contract and Details About Challenges with Previous Contract] How to negotiate a favourable contract to overcome these challenges?

As you can see from the above example, the user has stated the name of the company, their designation or role in the organisation, and has explained the duration of contract along with the challenges faced in the contract, all within brackets, followed by a question to clearly deliver a contract that helps overcome the challenges.

This is a basic example of prompt format for users to follow to obtain clear and concise responses from ChatGPT.

Resource Analysis

One of the first and foremost processes undertaken in procurement is resource analysis. What this refers to is the initially stage of analysing the total requirements of all the various resources required to commence operations.

Resource analysis is not only conducted during the initiation of the business but is a continued process. Procurement managers are constantly analysing reports to understand what their current requirements are to generate purchase requisitions and to look for favourable suppliers.

Using ChatGPT, procurement professionals can get a better understanding of how to approach their requirements and in what capacity they must order.

PROMPT: [Company name, your position in the company, what business or industry you belong to, what your requirements are, why you need to source these requirements] Provide a detailed report on how to acquire these resources and what capacity should be ordered as per the mentioned requirement.

Users, can use a similar prompt to obtain a detailed resource analysis, cutting short the time required in manually analysing each component of the business in detail.

Purchase Requisition

Purchase request is an essential document formulated based on your resource analysis, detailing all the requirements and quantities in which they are to be acquired. This particular document is to be produced to the purchasing team for approval, based on which the procurement team can proceed with vendor selection and order.

To produce a purchase requestion document, managers can take the help of ChatGPT.

PROMPT: [Company name, position or designation in the company, include key points mentioned in the resource analysis, include other relevant details related to your purchase request] Prepare a detailed purchase requisition based on the inputs provided.

Example: [XYZ Company, procurement manger at XYZ Company, 20 laptops, 20 desks, and 20 chairs for 20 team members] Provide a detailed purchase request form based on the inputs provided within the brackets.

You must note that the response delivered in return to your prompt might not be in the exact format in which you would like to prepare your purchase request. Having said that, the information delivered is a blueprint you can follow to easily prepare your purchase requisition document.

Assessment amp; Selection of Vendors

Once the procurement team receives approval for purchase, they can then proceed to assess and select a suitable vendor. This again is a process that requires meticulous research, to identify a suitable vendor partner.

To simplify this process, procurement professionals can make use of ChatGPT to obtain valuable insights on the various vendors and their capabilities to deliver your requirements.

PROMPT: [Company name, your role or position in the company, include key points mentioned in the resource analysis, mention the metrics you follow for assessing and selecting vendors, the region you are currently operating in] Provide a detailed assessment of vendors based on the details provided within the brackets.

Example: XYZ Company, Procurement Manager, 20 laptops, 20 desks, and 20 chairs for 20 team members, best prices by vendors, timely delivery by vendors, and top-quality vendors] Provide a list of vendors with an analysis of their services and mention the best vendors to choose from.

Negotiation of Terms amp; Pricing

Negotiation is another critical aspect of procurement. Based on all the analysis conducted prior, managers now have a clear picture of what their requirements are and the vendors to reach out to. At this stage knowing what your negotiation strategies are is essential.

To make this process easier, professionals can use the help of ChatGPT to prepare negotiation strategies and scripts to enable a clear communication between vendors.

PROMPT: [Company name, position in the company, details of the vendors, requirements based on resource analysis, our target to achieve during negotiation] Provide a negotiation strategy and script to improve our ability to negotiate with the mentioned vendors.

Example: [XYZ company, procurement manager, vendor X provides 20 tables, 20 chairs and 20 laptops located closest but is expensive, Vendor Y provides 20 tables, 20 chairs and 20 laptops located further is budget friendly, Vendor Z provides 20 tables, 20 chairs and 20 laptops located the furthest and is the cheapest option. Our target is to achieve timely delivery at minimum cost] Provide a negotiation strategy and script to follow based on the details provided to have the negotiation in our favour.

Sourcing Analysis

The process of sourcing analysis includes the consideration of various aspects obtained through internal studies and other factors, to identify areas of improvement within the procurement realm.

This particular process requires expertise and experience in order to obtain valuable data and formulate strategic plans to overcome challenges and refine the processes.

However, with the integration of ChatGPT into your procurement process, this particular undertaking is also made easier.

PROMPT: [Name of the company, your designation or role in the company, supplier name, supplier prices, supplier location, supplier timing, our frequency of ordering, our target and what we want to achieve.] Provide a detailed spend analysis and effective ways to achieve cost reduction while not comprising the quality and relationship with the suppliers.

Example: [XYZ company, procurement manager, Supplier X, Supplier prices is $1000, Supplier location – Dubai, UAE, supplier delivery is within 2-3 days working days, we order 10 times a month to stock up, our target is to achieve faster delivery and reduce the cost by $200 per order.] Provide a detailed spend analysis based on the data provided, also include a strategy to help bring negotiate a reduction in cost and improvement in delivery time.

Supplier Relationship Strategy

Perhaps the most important aspect in procurement is the supplier relationship strategy. You can continue to achieve great strides in business, provided that you focus on maintaining a robust supplier relationship.

A strong supplier relationship can be achieved by formulating an exceptional supplier relationship strategy. Traditionally, the relationship between procurement managers and vendors was maintained through consistent order frequency, quality of goods and financial benefits like credit purchases.

However, in the modern world, the relationship between procurement managers and vendors has evolved relying on a multitude of factors which include, timely delivery, quality of services and products, pricing benefits, effective communication, and more. One of the key reasons why maintaining relationship with vendors is more challenging today is due to increased competition.

Procurement managers always have the option to close contracts and setup new contracts with other vendors, if they are displeased with their current vendor services. Therefore, maintaining a strong relationship with your vendors is essential.

Now, how does AI help in this you ask? Its simple. Platforms like ChatGPT can help segment your suppliers for different materials, help develop supplier relationship management strategies and provide inputs on soft skills required to maintain a seamless flow of communication. All of this can be achieved by making the right SRM related prompts.

PROMPTS: [Company name, designation in the company, name of your supplier, duration of contract, other metrics like frequency of order, pricing, and quantity] Based on the data provided, provide a detailed strategy on how to improve supplier relationship management.

Example: [XYZ company, procurement manager at XYZ company, Supplier name X, 3-year supplier contract with 1 year pending, order placing frequency with supplier is 3 times a month for 12 months, the per unit cost is $10 and 4000 units are included per order bringing the per order value to $4000. The total units delivered per month is 12,000 units. Our target is to maintain the number of units purchased but receive an economies of scale discount.] With data provided, formulate a strong supplier relationship management strategy to continue the supplier relationship while also achieving our target.

Contract Management

Lastly, another important component of procurement is contract management. Contracts between a procurement team and vendor stipulates conditions that parties must abide by. These obligations are put in place to protect parties involved in the business.

Therefore, the formulation of such contracts is to be done meticulously in order to avoid any loopholes for errors to occur in the future. One such platform that has proven to make this task easy on procurement managers is ChatGPT.

You can now prompt the platform to assist you in formulating a robust, loophole free procurement contract with all necessary clauses as per industry standards. It is also capable of providing users custom inputs that can be included in the contract, bespoke to their business.

PROMPT: [Company name, role in the company, supplier name, materials sourced, pricing details, frequency of order, contract term, location of supplier, location of procurer, and other relevant details] Based on all the inputs provided, prepare a detailed supplier contract with all the necessary clauses included to protect both the procuring party and the supplier party involved.

Example: [XYZ company, procurement manager at XYZ company, Supplier X, supplier X delivers 100 units of Bamboo, 100 units of Bamboo amount to $75, order frequency is 100 units order 3 times per month, contract term is for 3 years, supplier location is Ras Al Khaimah, UAE, supplier has been in business for 20 years] Based on the inputs provided within the brackets, provide a detailed and well structure supplier contract.

Note: The prompts and examples discussed above are hypothetical in nature and have been mentioned to help you understand the ways in which you can craft your prompts specific to your procurement needs. These prompts are flexible and can be customized as per individual requirements. Procurement managers are not bound to input the exact format of prompts to obtain the best results. Having said that, this method of prompting has proven effective based on trials.

It is also worth mentioning that the results delivered by ChatGPT may or may not be 100% true, hence, it is always advisable to go through the results and authenticate it using your personal experience and expertise, just to ensure AI’s reliability.

Some prompts may be more elaborate and vaster, while some prompts might be brief and short. Either way, the intention of using ChatGPT is to obtain useful information in a timely and cost-effective manner. You are advised to cross-check and verify the details, in order to avoid any future hassles with your suppliers.

If you are procurement professional looking to improve your procurement processes, while achieving low-cost services and timely delivery, make sure to utilize the advance capabilities of ChatGPT.

Stay tuned for more interesting insights on the use of AI in procurement with our informative blogs and podcasts. If you have any feedback or questions you would like to ask, please feel free to leave us a comment.