“Walmart and Maersk are using AI agents to maintain and negotiate deal terms with so-called tail-end vendors, the many small suppliers whose low-value transactions nevertheless make up the bulk of a company’s contracts. Any large firm, especially one with expansive supply-chain and logistical needs, manages thousands of these kinds of relationships. As outlined in Procurement in the Age of Automation by the supply chain management experts Remko Van Hoek and Mary Lacity at the University of Arkansas, an AI bot can run 2,000 negotiations at the same time, all day and night, while allowing vendors time for bid preparation and counteroffers.

Say, for instance, a big-box retailer wants to replace outdoor furniture in front of its store parking lots. It puts out a call for bids and gets some offers. The Pactum AI system can use its large language models to analyze this requisition—and all previous requisitions of this type.

The language models aren’t generating new negotiation clauses here. Rather they are assembling information and identifying vendors. Data can be brought in from internal or external sources on factors like relationship strength and current market pricing, all using client-set parameters. A chatbot then sends a note to bidders with offered terms: maybe three varying options. Any acceptable? The vendor says yes or no. Next there’s either more negotiation, or, if terms are agreed within a target spectrum, the purchasing flow proceeds.”

From IEEE Spectrum.