Walmart automates supplier negotiations

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Walmart automates supplier negotiations

By Dan Berthiaume - 03/26/2020

Walmart is leveraging artificial intelligence (AI) to negotiate more valuable supplier contracts at lower cost.

The discount giant is deploying the AI-based commercial negotiations platform from Pactum to automate negotiations with part of its global supplier network. 
Walmart is set to pilot the Pactum platform with some of the company’s long tail vendors who provide low-volume, niche products. 

Pactum’s team of analysts begins each project by mapping what they call the “value function” in a given set of negotiations. This is combined by the vendor’s negotiation chatbot, which is capable of autonomously conducting best practice negotiations. Once a negotiation is complete, all information will be updated automatically in Walmart’s relevant systems, such as ERP and CRM.

Walmart has so many contracts with various suppliers that it can be hard for individual employees to renegotiate them. Increasing the efficiency of millions of long tail supplier contracts represents a $200-500 billion opportunity for Fortune Global 500 companies jointly, according to Pactum’s calculations.

“We’re thrilled to be working with Walmart,” said Martin Rand, Pactum CEO. “The underlying principle of efficient negotiations is that it’s not a zero-sum game,” said Rand. “The fact that one party wins with Pactum means the other party will win as well. Pactum removes the inefficiencies from low value, high volume deals.”