It’s been said that disruption fuels innovation, and if there’s one technology flipping the switch harder than anyone expected, it’s artificial intelligence (AI). From our homes to the boardrooms of massive industries, AI isn’t just knocking on the door – it’s storming in, and predictive purchasing might be its golden ticket. During an insightful discussion at the BirchStreet North America Conference, industry leaders from hospitality and procurement explored this seismic shift and provided a rich tapestry of perspectives on the challenges and opportunities AI presents. Whether you’re tackling procurement chaos at work or just wondering if your six-year-old has figured out GPT-enabled math shortcuts (spoiler alert – they have), AI is heading towards reimagining everything we do.
A new era of possibilities
AI isn’t exactly a newborn concept. Predictive technology has existed in one form or another for decades. What’s different now is its sheer sophistication and accessibility. Peter Spellman, Chief Technology Officer at BirchStreet, zeroed in on what sparked this acceleration – AI’s leap from being a niche tool to one that was suddenly conversational, predictive, and remarkably intuitive. He compared this transformation to the release of the first iPhone, which fundamentally shifted how we interact with technology and rewired industries.
Karim Lakhani, Executive Vice President of Northwood Hospitality, brought AI’s evolution to life with a simple but striking anecdote from his home. His six-year-old daughter initially relied on Siri for math problems, but as GPT tools gained prominence, she turned to them not just for answers but for problem-solving processes and logical explanations. “It’s not just about getting the answer,” Lakhani observed. “It’s about understanding how we get there.” AI is transcending its role as a resource and becoming a collaborator, sparking parallels with its potential across industries.
Hospitality meets predictive technology
The hospitality sector tends to exist in a state of flux, dictated by shifting customer demands, global supply chain hiccups, and market unpredictability. Predictive purchasing technology, powered by AI, is giving companies a chance to get ahead of this chaos. And no, “using a crystal ball” isn’t a legitimate strategy – though Lakhani jokes it might seem easier some days.
At its core, predictive purchasing arms hospitality leaders with real-time data instead of outdated historical trends. Guest expectations shift faster than seasonal menus, demanding personalization on a sharper scale. For example, demand for unique, memorable experiences such as customized menus has skyrocketed. AI, Lakhani explains, enables hospitality providers to effortlessly track inventory, optimize purchasing levels, and predict their guests’ needs – all while ensuring profitability. His vision highlighted AI’s ability to address real-world issues, like minimizing food waste without compromising on quality or variety.
Procurement in the age of data
While restaurant kitchens may seem worlds away from global procurement offices, both spaces grapple with the same burning question about AI’s role: Is it here to replace jobs or elevate them?
Stephane Masson, a retired executive with decades of procurement expertise, illuminated how AI is revolutionizing supply chain challenges. Masson believes AI won’t eliminate procurement roles but rather enhance them. An example? AI can efficiently analyze supplier performance, identify cost-saving opportunities, and even manage fluctuating pricing trends. During a time when companies face pressures related to sustainability, customer expectations, and regulatory compliance, AI’s data-driven insights become the ally every procurement leader urgently needs.
Masson dove into advanced predictive applications, explaining scenarios where AI helps evaluate global supply fluctuations with striking precision. Supply chain interruptions – whether caused by geopolitical conflicts, environmental disasters, or fluctuating demand – can no longer paralyze businesses. For instance, he highlighted how AI can track potential delays in fertilizer production in Ukraine and anticipate the ripple effects on global soil supplies months in advance. The result? Procurement leaders can prepare for challenges before they disrupt operations.
Fred Groberty, Vice President at FoodBuy, took this conversation further, emphasizing how AI transforms routine procurement activities. Think about overwhelmed chefs juggling hundreds of menu items and suppliers. AI tools allow them to work smarter, offering actionable insights at the moment of purchase, making the process seamless. The system might even know what a chef needs to order before they do, turning guesswork into an efficient, data-backed science.
Challenges on the road to AI-powered decision-making
Of course, implementing AI-based predictive systems isn’t all smooth sailing. Data is both the foundation and the Achilles’ heel of any AI strategy. Without organized, high-quality master data, predictive models lose accuracy and reliability. Peter Spellman put it bluntly – “Garbage in, garbage out.” To make AI truly impactful in procurement, companies must start with proper data hygiene.
At BirchStreet, for example, Spellman revealed how the team is tackling this challenge head-on by using private AI models to clean up supplier data. By eliminating duplicates and inconsistencies, companies can lay the groundwork for AI to unlock its full potential. However, data isn’t just a logistical concern; it’s also becoming an ethical one. Lakhani pointed to an increasingly urgent debate around ownership and usage of AI-powered data collected by platforms like BirchStreet. Buyers and suppliers alike want assurances that their competitive insights and proprietary strategies aren’t shared, highlighting the need for trust in this ecosystem.
Another significant hurdle? AI’s “hallucinations” and inaccuracies. While AI is undoubtedly powerful, significant human oversight remains non-negotiable. “It makes mistakes,” said Spellman. While AI’s capability to predict is dazzling, every piece of output demands careful review and validation, especially as systems scale.
The way forward
What does AI and predictive purchasing hold for the future? The panelists agreed – collaboration is key. Both suppliers and buyers need to align on how to balance innovation with practical implementation, making AI valuable for all stakeholders.
Fred Groberty stressed the importance of easing the lives of procurement teams by reducing cumbersome manual tasks and empowering them to focus on higher-impact activities. For him, it’s about creating tools buyers not only use but value – systems that deliver actionable insights they can trust to make the right decisions.
Lakhani, meanwhile, issued a bold challenge to BirchStreet and its tech partners to dream bigger. Beyond efficiency, how does AI drive profitability across every level? Solutions like advanced forecasting tools or AI-driven inventory management systems aren’t just dreams – they’re initiatives already taking shape.
Masson’s final reflection summed it up best. AI is less about replacing human intuition and more about amplifying it. It’s about navigating an increasingly complex world with confidence rather than chaos. Ask yourself – what systems, tools, and mindsets will define how your company operates five, ten, or twenty-five years from now?
Spoiler alert – if predictive purchasing and AI aren’t part of that vision, you’re missing the bigger picture.