[SAP AI Business Services Success Stories] Improving Procurement with AI and Machine Learning

About Severstal and the challenge

Severstal is a Russian steel and steel-related mining company. Severstal wanted to improve procurement with AI and Machine Learning as about 21% of Severstal’s 550 daily request for the creation of new materials had to be returned because incorrect material classes were chosen by users. Thus, ordering spare parts posed a significant effort.

So, Severstal-Infokom, the company’s IT department looked for ways to facilitate the filling out of service requests. The goal was to make the entering of new materials into the material master data possible in an intelligent and automated way.

SAP AI Business Services Solution

Data Attribute Recommendation, part of the SAP AI Business Services portfolio, was chosen by Severstal to improve master data quality through automation to achieve higher accuracy.

Data Attribute Recommendation service is one of SAP’s solutions and was used in combination with SAP solutions for enterprise information management. It classifies data records through applying machine learning. Data Attribute Recommendation helps classify entities such as products, stores and users. To do this, the service uses free text, numbers and categories as input. This way, the service can enrich missing attributes of a data record and classify incoming product information.

Achievements

Severstal reduced the effort for new material creation by approximately 20%. With the help of SAP AI Business Services Data Attribute Recommendation, Severstal built an AI-enabled software landscape that uses machine learning to help reduce business user errors. Based on the input provided by users, the system now suggests appropriate field content, such as the correct material classes and characteristics, enabling users to fill in new material requests correctly.

This has led to a decrease in the time needed to create new material master data requests. Manual master data management efforts have been reduced through the application of machine learning to match hierarchies. With the use of Data Attribute Recommendation in combination with other SAP solutions, Severstal now automates key process steps in master data management as well as master data governance functions for purchased materials. With the support of SAP AI Business Services, Severstal now leads with intelligent processes to enable the intelligent governing of master data throughout the enterprise.