Big Data in Procurement 4.0 Critical Success Factors and Solutions

The concept of procurement 4.0 was born out of the idea of industry 4.0. The term industry 4.0 derives from the consideration that it represents the fourth industrial revolution after the first three ones, based on the steam engine, the electricity, and the computer. Immediately, it started to be considered a different concept with profound implications for organizations. The term industry 4.0 has been published for the first time in 2011 when an association of representatives from industry, politics, and academia promoted the idea as an approach to improve the German manufacturing competitiveness (Schwab, 2017). Industry 4.0 is the merger of information and communication technologies with plant automation (Nicoletti, 2017). The topics of Production 4.0 and Logistics 4.0 have already been analyzed and discussed. The field of procurement 4.0 needs more investigation. The topic is barely ever mentioned but extremely important due to the increasing relevance of procurement in organizations. This chapter aims to provide to academics, including students, and practitioners an opportunity to understand how to implement, monitor, and benefit from the adoption of industry 4.0 in the procurement processes within organizations. In other terms, it provides a clearer insight into the potential benefits produced by the implementation of new technologies and define a structured plan of procurement 4.0 (Pellengahr et al., 2016). The concept of industry 4.0 started in the manufacturing environment, but soon expanded to all types of organizations. In the new era of procurement management and in the new scenario of procurement 4.0, managers need to redesign the value added by procurement within the organization (Bienhaus and Haddud, 2018). Industry 4.0 also involves a considerable change in procurement (Luo, et al, 2017), labeled in this chapter as procurement 4.0. In general, the transformation of the procurement processes can produce several benefits not only connected with the direct activities (such as selection, negotiations, contracting, and so on) but also to the support of the daily business and administrative activities and to help in decision- making. In particular, procurement 4.0 allows the procurement to concentrate on strategic data- driven decisions and activities (Kiron, 2017). Procurement 4.0 is a powerful approach to improve the integration of procurement with other functions and with external entities supporting organizational efficiency, effectiveness, profitability, and in developing new business models (Bienhaus and Haddud, 2018).