---

Artificial intelligence (AI) is popping up everywhere, from our phones to our cars—and now, it’s changing how businesses find and connect with suppliers.

This article will explore exactly how AI is transforming supplier discovery and procurement operations.

So, if you’re looking to streamline your sourcing process, cut costs, and find the best suppliers out there, read on.

The Challenges of Traditional Supplier Discovery

When discussing AI-driven supplier discovery, a question that immediately comes up is:

“What’s wrong with how we’re doing things now?”

This is a valid concern.

After all, implementing any new technology requires staff training, adapting existing processes, and, often, a shift in company culture.

But, these changes are often worthwhile when considering the challenges of traditional supplier discovery, starting with its inefficiency.

McKinsey data reveals that manual supplier searches can take months to complete.

Illustration: Veridion / Data: McKinsey

On top of this lengthy process, traditional methods typically only allow companies to consider a few dozen suppliers, even when thousands of potential vendors exist.

This limited scope is understandable, as a single procurement professional or even a team can process only so much data.

As a result, traditional supplier discovery often leads to suboptimal choices and companies missing out on the best vendors.

Plus, with manual supplier discovery, teams often rely on intuition or existing networks when making sourcing decisions.

Chin Tee Teo, former global supply chain director for Philips, agrees:

Illustration: Veridion / Quote: LinkedIn

All this can lead to selecting suppliers that are:

• More expensive
• Lower performing
• Susceptible to more risk
• Misaligned with company values

To add to these challenges, traditional supplier discovery often relies on incomplete, outdated, or inaccurate data.

Without modern technology to organize and filter information, businesses are left with static databases, spreadsheets, and supplier directories that quickly become obsolete.

In fact, according to a 2022 TealBook report, the overwhelming majority of professionals and procurement executives mistrust the data they’re working with.

Illustration: Veridion / Data: TealBook

Out of 200 sourcing and procurement executives, only 18% were sure they received up-to-date information.

So, the state of traditional supplier discovery is far from ideal.

It’s a process where sourcing often relies on inadequate databases and inefficient manual processes that are time-consuming and don’t guarantee optimal results.

This outdated approach ultimately prevents finding the best suppliers, impacting cost, quality, and overall competitiveness.

How AI Transforms Supplier Discovery

Let’s now see the alternative and what AI brings to the table.

The image below highlights some key benefits of AI in supplier discovery.

Source: Veridion

By conducting automated searches across vast datasets, AI drastically reduces the time spent on manual research.

In fact, AI algorithms can quickly sift through millions of supplier profiles, websites, and other data sources, identifying potential matches based on specific criteria.

Plus, this tech can easily sort and categorize data, unlocking better supplier evaluation and even predictive analytics based on historical information.

This results in more refined and organized data that is readily available and facilitates better procurement decision-making.

For example, compare traditional manual supplier searches with those conducted using an AI-powered platform like Veridion.

Source: Veridion

As you can see, the time spent searching is dramatically reduced while simultaneously uncovering a significantly larger pool of candidate suppliers.

Importantly, the idea here is not to replace procurement experts with AI.

On the contrary, by eliminating tedious manual database searches and the limitations of considering only a small range of suppliers, AI empowers teams to focus on selecting the right suppliers for their needs.

We talk about some other use cases for AI in procurement in our article on the topic, so take a look to learn more.

Finally, we should mention Generative AI (GenAI), a subset of AI that can create new content, such as text and images, from existing data and patterns.

GenAI promises to further streamline supplier discovery by generating new insights into suppliers, creating supplier shortlists, and even automatically sending out RFPs.

According to Gartner research, 73% of procurement leaders expected to adopt this technology by the end of 2024.

So, it’s no surprise then that the window for being an early adopter of GenAI is closing, as Gartner’s senior director of procurement tech research, Kaitlynn Sommers, points out:

Illustration: Veridion / Quote: Gartner

However, as with any emerging technology, Sommers cautions that adoption should be approached carefully.

In fact, while you may be strongly tempted to jump on the bandwagon, you should first consider whether you’re making the most out of already established and powerful AI-powered systems.

Introducing Veridion’s AI-Powered Supplier Discovery Tool

One such system is Veridion, our own AI-powered supplier discovery service.

Using both AI and machine learning (ML) algorithms, our data engine continuously monitors and gathers data from across the web, providing real-time, accurate supplier information.

Veridion’s advanced models process both structured and unstructured data, sorting and categorizing it for easy access.

Source: Veridion

For each supplier you discover through Veridion’s system, you’ll get access to over 60 data points that include:

• Supplier location
• Company size
• Product offerings
• Supplier certifications
• ESG data
• And much more

Now, getting started and using this data is very straightforward.

For starters, you can use our two APIs: the Search API for supplier discovery, and the Match & Enrich API to update and enrich your existing supplier records.

Source: Veridion

Through these APIs, you can access our comprehensive database of over 120 million companies worldwide, regardless of how specific your criteria is.

Simply list and specify your requirements, and our system will deliver highly accurate results within minutes.

Taking this a step further, our new Scout service allows you to search for suppliers using virtually any criteria imaginable, all through natural language.

For example, suppose you’re searching for non-GMO, USDA-certified corn syrup manufacturers.

You would simply enter a query like the one shown below.

Source: Veridion

Our AI system then processes the query and returns thousands of matching results in seconds, precisely aligned with your needs.

Here’s a glimpse of the results from this search.

Source: Veridion

Ultimately, Veridion’s capabilities empower procurement teams to be more efficient and effective.

Veridion eliminates the need for time-consuming tasks like manual Google searches or digging through outdated databases, only to find that shortlisted vendors are missing key qualities.

Instead, procurement professionals can focus on strategic evaluation and selecting the best suppliers.

Don’t just take our word for it—try Scout yourself.

Run a few searches and see Veridion’s potential in action.

Companies Already Benefiting from AI-Powered Supplier Discovery

Industry leaders recognized the benefits of AI early on and are already reaping the rewards.

One compelling example is PepsiCo, a global food and beverage giant.

PepsiCo is deeply committed to growth, and sustainability is a big part of this, as the VP of Procurement, Heleen Du Toit, emphasizes:

Illustration: Veridion / Quote: CPOStrategy

Driven by the need to find suppliers aligned with its sustainable sourcing initiatives, PepsiCo requires access to the most accurate and up-to-date supplier data available.

Simultaneously, the company must also consider critical factors like supplier performance, quality, and cost.

To address these multifaceted requirements, PepsiCo chose Veridion’s data engine to power its supplier discovery and sourcing decisions.

Source: CPOStrategy

Specifically, PepsiCo leverages Veridion’s supplier data and market intelligence across various sourcing functions, from accelerated supplier discovery to proactive risk monitoring. 

A key feature supporting PepsiCo’s local sourcing and sustainable agriculture efforts is the ability to filter potential suppliers based on ESG commitments, policies, and controversies.

Veridion’s full ESG taxonomy is illustrated below.

Source: Veridion

Veridion’s data is not only comprehensive, but its AI system also continuously monitors company changes on a weekly basis.

This enables quick decision-making and helps mitigate risks related to sustainable practices.

AI can assist organizations in mitigating other risks, too.

With rising geopolitical tensions, fluctuating transportation costs, and the potential for product shortages, modern procurement has become increasingly challenging.

This is especially true for industries like pharmaceuticals and semiconductors, where strategies such as nearshoring and supplier diversification are essential for ensuring consistent and cost-effective operations.

AI-driven tools like Veridion support these initiatives by providing companies with comprehensive supplier insights, including location, certifications, financial stability, and risk profiles.

This data spans a vast network, offering worldwide coverage.

For instance, a search for “automotive semiconductors” yields results for hundreds of companies in over 650 locations globally.

Source: Veridion

This breadth of information enables businesses to diversify their supplier base, reducing reliance on single-source suppliers and enhancing resilience against potential disruptions.

In summary, companies like PepsiCo are demonstrating the tangible benefits of AI-powered supplier discovery.

From enhanced efficiency and data accuracy to improved risk management and sustainability initiatives, AI is transforming how businesses find and connect with the best suppliers worldwide.

Implementing AI in Your Procurement Process

By now, you’re probably intrigued by these powerful AI capabilities and may even be eager to start using them.

However, like any new tool or technology, proper implementation is essential to fully harness its potential and achieve the desired results.

Generally, integrating AI systems into your operations involves a few key steps, outlined below.

Source: Veridion

First, set clear goals, such as reducing sourcing cycle time or improving supplier quality, and choose the AI tool that best aligns with those objectives.

Next, implement the tool gradually.

Start with small-scale projects, like supplier discovery for a specific category of goods (like office supplies).

This way, you can test the system, identify any potential issues, and refine processes before a full-scale rollout.

Most importantly, use this initial phase to ensure everyone adopts and learns how to use the AI system effectively.

This is crucial, especially considering that nearly half of employees feel their employers don’t give enough thought to how new technology is implemented or the necessary training provided.

Illustration: Veridion / Data: WalkMe

This comes from a 2024 WalkMe survey of over 3700 individuals, including senior business leaders and their employees.

Among the other concerning findings is that 69% of the same respondents say that their last change management experience was negative.

One aspect of successful adoption is how the system fits with your current workflows.

For instance, a big challenge is to integrate AI solutions with other procurement software you already use.

Compatibility within your existing tech stack is essential, as it enables a smooth flow of data and processes between systems, avoiding data silos and maximizing the value of each individual tool.

Take an e-Sourcing platform like Market Dojo that offers tools for procurement automation, supplier engagement, and e-auctions.

Source: Market Dojo

While this platform is great on its own, its capabilities are significantly enhanced through its partnership with Veridion.

By integrating our data engine into the platform, the supplier discovery and sourcing process becomes more streamlined.

Veridion’s high-quality data works seamlessly with the automations and eSourcing features of Market Dojo, ultimately enabling smarter, more efficient sourcing decisions.

Overall, by implementing AI gradually and ensuring all your systems work together, you can fully leverage the power of this technology.

Conclusion

AI is no longer a futuristic concept in procurement—it’s a competitive advantage.

Companies adopting AI for supplier discovery are making smarter, data-driven decisions that drive efficiency, sustainability, and resilience.

As AI adoption accelerates, businesses still relying on outdated supplier discovery methods risk falling behind.

So, don’t wait.

Take the next step and explore AI-powered solutions like Veridion to optimize your procurement processes.