Intel saves $20 million on contracted freight rates with AI-driven rate request automation

Intel's Global Logistics Org and Corporate Strategic Procurement divisions manage the company's transportation carrier contracts and rates. Its carrier rate request process required heavy human involvement, from collecting the information for a new request to uploading data into the external bidding tool, and gathering final contracted rates into systems of record was cumbersome. Contract renewals were laborious, and the company's analysis detected non-contracted rates and usage that were often much more expensive than contracted rates.

Intel's Supply Chain Innovation Lab built a Rate Request Automation (RRA) program that gives commodity managers a common, semi-automated workflow for rate requests and visibility into all active rates, with suppliers using electronic forms and signatures so new contracted rates take effect faster. The large megabid cycles that once needed months of manual preparation are now automated using advanced analytics, AI and machine learning, and RRA uses AI and machine learning to identify non-contracted shipments and auto-submit them as new rate requests. AI-enabled virtual audit agents connected to RRA help audit carrier compliance and compare actual spend with contracted spend.

Intel says the program has saved $20 million on contracted rates and $4 million on non-contracted rates. It also reports a cycle-time reduction of greater than 50% for complex bids and a 10X speed-up in negotiating new contract rates. Intel has reduced its team of commodity managers from 10 to two, freeing people to focus on more strategic work.

• Give buyers a shared workflow for rate requests, approvals and supplier signatures instead of manual bid preparation.
• Use analytics to spot non-contracted shipments and turn them into competitively bid contracted rates.
• Connect audit agents to the sourcing workflow so actual spend is checked against contracted terms.