Zero100’s latest report highlights how AI-powered sourcing and procurement are transforming the first mile of supply chains, boosting resilience, sustainability, and competitiveness.
AI and the First Mile: A Decade of Transformation
The first mile of supply chains—sourcing and procurement—is becoming a focal point for innovation, according to Zero100’s report Reinventing the First Mile: AI Powers a New Generation of Digital Sourcing. While the past decade of supply chain advancements focused on the last mile, the next ten years will prioritize digitally-enabled sourcing as a strategic asset.
Once considered a back-office function, sourcing now plays a central role in driving business resilience, fostering sustainability, and enhancing competitiveness. Companies leveraging AI are unlocking its potential to optimize procurement processes, reduce costs, and strengthen their competitive edge.
AI: The Key to Unlocking Value in Sourcing
AI is becoming the driving force behind sourcing transformation, as companies embrace technologies to streamline procurement operations. For indirect spend, automation and user-friendly purchasing tools are empowering business stakeholders. For direct spend, AI equips category managers with advanced insights for timely decision-making and tighter supply chain connections.
Angel Mendez, former COO at HERE Technologies and CSCO at Cisco Systems, predicts that “direct procurement is going to win with AI […] and quants are going to rule direct procurement.” This shift requires a solid foundation of data, advanced software, and top-tier talent to realize its full potential.
Zero100’s report links AI adoption to improved financial performance, noting that the top companies hiring AI and machine learning talent have experienced three times the revenue growth and positive margin growth compared to peers. Although not a direct causal relationship, this association underscores the strategic value of investing in AI-powered capabilities.
The Foundations for AI Success: Data, Technology, and People
To harness AI’s full potential, Zero100 emphasizes the importance of three critical dimensions: data, technology, and people. A robust data foundation is essential for AI-powered sourcing, as many organizations struggle with fragmented or incomplete data. AI can significantly improve data management and operational efficiency, leading to better decision-making across supply chains. Technology plays a key role by integrating seamlessly across supply chain functions, enabling tools like predictive analytics, digital twins, and autonomous agents that optimize processes and provide holistic, data-driven solutions. Equally important is the human element. As AI reshapes procurement, it shifts tasks from manual execution to strategic oversight, requiring organizations to upskill their workforce. This includes building expertise in digital fluency, systems thinking, and sustainability.
Jon Moeller, CEO of Procter & Gamble, highlights the transformative power of AI and machine learning, noting their use in optimizing truck scheduling, fill rates, and sourcing processes. He estimates these tools could unlock $200–300 million in savings across their supply chain operations.
A New Era for Supply Chain Sustainability and Innovation
The transformation of the first mile marks a significant milestone in the evolution of global supply chains. AI-powered sourcing and procurement not only improve efficiency but also align with broader sustainability and innovation goals.
By embracing AI, organizations can create connected, circular, and digitally-enabled supply chains that are more resilient and responsible. As sourcing transitions from a functional necessity to a strategic advantage, companies have the opportunity to lead the way in building the supply chains of the future.
