DONE_2025, ProcureCon MRO. Keynote Presentation Reimagining MRO: AI is a Strategic Imperative for Procurement in a Risk-Driven World

Announcer: All right, so we're moving right along. Next up, we have a presentation from Verisin. We are gonna be hearing from Paul Noble. He is the chief founder and chief strategy Officer at Verisin, and he's gonna be talking to us today about AI in a risk driven world. So let's welcome Paul to the stage.

Paul Noble, Founder & Chief Strategy Officer – Verusen: Thank you Kelly, and let's hear it again for Derek and Marcello. Great job. It was clicker. Over there. All right, cool. It was great that they kicked things off, right? So we are going to dive deeper into a lot of the subjects that they covered, which is cool, and appreciate them teeing it up.

But talking about. Alignment with as procurement as a strategic leader and stakeholders, and then utilizing purpose-built AI models to help overcome that and scale a lot of these different activities that you all have from a management perspective. So I think you know, a great place to start.

We're, so everything we do is centered around risk. You are trying to manage all of your stakeholders across the organization. And MRO is again, a huge insurance policy that exists for every organization. And every year we have something that kicks that risk profile. Way back up. This year it's tariffs.

So everybody let the hoarding begin at the store room level and the plant level, and how do we get through this one? And, but better prepare ourselves for the next one. So those are the things that we'll be going through today. And a little bit about Verisin. We are a supply chain intelligence company that focuses specifically on MRO materials and MRO supply chains.

Over the last six years, we've built the largest world's largest knowledge base for MRO materials. So these are deep learning AI models and large language models that are trained specifically for MRO and that matters when you start talking about all of the complexity, the details, and the nuances that exist within the channel.

We manage over $12 billion of spend and inventory globally for a growing number of customers across all different kinds of verticals. I like to say that MRO is MRO. So there's a lot of basic blocking and tackling and foundational challenges and things that you can bring together for systems, processes, and people.

And we serve this role as the technology that can find things that maybe you don't know, that your suppliers don't know, and we can all sit at this table. And go solve it together. 'cause MRO does take a village and it's always living and breathing. And so it's not project based as much as a lot of the processes and elements and traditional software treat it as, and it's all about helping your stakeholders feel more comfortable and trust that they're gonna have what they need, where they need it.

And that's really. A big part of procurement's role as as you serve the organization.

So last year for those that attended, we talked about setting and creating an MRO strategic roadmap, and I've been seeing a lot more of these across every organization. Who here has an MRO roadmap? For their organization, whether that involves technology or it doesn't. All right, we got a few. All right, let's talk about what you can do to start there.

'cause you have to know where you're going. Just like any technology roadmap or supply chain roadmap. You pick it, you name it. You have to know where you want to be and what. Is in place today and where do you need support? And it's centered around data, but mostly you don't trust your data, or most organizations don't.

It exists between materialized data and free text data and leaning on suppliers and not really knowing where you're going. So it makes it difficult to set a roadmap. And that's really a new approach where we've developed a new approach to be able. To empower you and build trust, not only for yourselves, but so that you can be the strategic leader that can drive the roadmap and serve your internal stakeholders more effectively and allow them to say, this is what I need.

So it can put into place a lot of the stuff that they talked about, being able to manage categories across the board, picking strategic categories and suppliers to lean on. It all starts with trust. So there's a ton of different trust exercises that we support, but also that you will be living across the organization but it's always not typically the biggest priority for your organization.

You need help and that's where AI can help do different things across personas and whatnot. That help get 50% done, 80% done, 90% done. So you can focus on the strategy and execution internally as well as with the suppliers that extend your network and become a part of your team. All right, so it does start with people.

This is one of the biggest challenges. You could go out to market, run your sourcing events, do everything that they just talked about, and. It could fall somewhat flat. And you're not, you're only gonna get a portion of the implementations. 'cause there's a lot of misaligned incentives across, and we picked, there's more than this, it is involved and whatnot, but we really focus on, your central involvement in trying to build trust that at the item level, at the plant level, that people are gonna have what they need when they reach back for the part.

And that goes for highly critical items, then that goes for commodities as well, right? And it's a lot of time is focused on the fast moving stuff. But let's talk about a little bit more of the entire pie so that you know where you're going and you're not just focusing on one category or two categories a year.

You can look at and have more visibility all the time. And then align these, traditionally misaligned incentives from a trust perspective. And so this is what that looks like. We introduced this last year, and this is a big part of, the visibility that's difficult to garner across your MRO supply chain, and it makes it difficult for you to get that internal alignment and build that trust.

So what you're seeing here is. Example, real world is example of all the different things that are going on across your Mr. MRO supply chain. And this doesn't even include all of them, but what it's saying is, where are you at today? Where do you want to go? What? Where's data telling us that you could be knowing that you only have portion of the picture in your ERP, your EAM, or whatever Frankenstein you're running.

But these are all the different levers you should have eyes on at any given time, right? Where do I need more items? Where am I at risk? Where do I need a lot less? That's very typical. What does my network need while serving the item in plant level? Store room personnel and maintenance, reliability, personnel but also other things that can become visible with partners and are often in difficult.

To identify and implement. So this goes to, what could I repair versus buying new and inventorying all the time? How could I get a repair partner for electrical or motors or mechanical? What could I put in VMI and extend and put on a lot of different cool programs that suppliers offer, but in a lot of cases you don't know and they don't know what could be done there.

And it's really a very manual process to get there. So lighting that up and being able to work together with your supply base on VMI strategies. Just had a few conversations this morning about data and duplication of data and naming conventions and categorization. We'll go a little bit more into that.

But there's a lot of redundancy across many facilities. And if you have five or if you have 10 or if you have a hundred, it's a. A very difficult problem to wrangle at scale. And then what we'll really talk about for a large portion of the second half of the presentation is tail spend, right?

Who are you buying from? How do you get that tail funneled to the folks that you've negotiated contracts with, that you generally trust? But again, they may only be getting a portion of the view. And they're only getting a portion of the spend because of that. And it's really difficult for you to force your stakeholders to comply onto that contract.

So all of these things should be visible and so you can pull levers and prioritize any given time and that helps drive your roadmap. And so you have a target to go after. Who in the audience and hope I, I expect to see a lot of hands who is heard. We can't do that. 'cause that part's critical.

Can't buy on that contract. 'cause that's part's critical, right? It's su Yeah. It's a big part of why the tail exists. It's a big part of why everyone's inventory is. Chock full of non-moving and slow moving items. Those parts are critical. We haven't used that asset for 10 years. Yeah, but what if we need to use something for something?

It was like, come on. All right so with that said, we're, we have taken a a really unique approach and this is an example of where AI can help with the lift, right? So generally speaking a lot of you may have gone through or worked with your re maintenance and reliability. Counterparts and said, what makes something critical, and you have some rules and you have some, things that would make a part critical, but it's tough to actually go implement that and monitor it at scale.

And and something that could be highly critical, could be highly available. Usually if it's highly critical, we store two years worth of it and or five years worth of it, but. It could be highly available, so you need to look at that side of it as well. We have built an AI agent that can go in and look at your current criticality all parts and compare it with, 80% of what you would look at lead times asset criticality and some basic things that probably live in your systems of record.

And then be able to run it and say it's an A now, but we think it's a B because you can get it quickly, right? And so you may wanna look at, make that adjustment. And running that at scale across all of your parts is super important to be able to build that trust to say, yes, it's highly critical, but it's available and this is the contract we're gonna buy on to get that internal buy-in.

And that, that movement. Across important categories like power bearing and transmission. So criticality is changing, and this is a new way that AI can help support establishing criticality so it's not set and forget when the part is initially set up in your system.

And so by knowing what parts are critical and getting people to buy in and say, this is what I need based on historical movements and things of that nature that you can train models on, that helps you get item level, plant level satisfaction with your stakeholders. They say, this is what I need. What does that do?

That informs you. Greatly on. All right, now how do I go secure that supply for that demand that I know and I feel more confident in, and I'm working together with my internal stakeholders and maintenance and repaired operations and reliability. So now we can better look at enterprise level demand.

So you can go say, I do love this supplier, but we need to look at a couple different things. Before we renew the contract or you say, I'm not really satisfied with that supplier, I need to go to market, but what am I gonna go to market with before I do this For one or two categories, you should be able to look and prioritize where the opportunities across all of your categories at any given time.

And I think some of the unscalable activities, because you don't. Have great data. You don't know exactly the demand. It's a lot of effort. So there's a lot of wasted cycle time preparing one category where you can be actually leaning into your current supply base and like 'em, and provide 'em with more directionally trustworthy data.

This is what I need here's the information at the item level. You can share that with them very easily. And that's really what we're seeing from a a change in how AI can help solve for the tailspin problem that exists at every organization, especially in MRO. As we mentioned that, I think there's been a lot of talk in the procurement world about tail spend and for the most part.

There have been a lot of things that you've tried both manual, maybe looked at some different things. One of the exciting pieces is that, one of the takeaway here is that MRO is very specific and when you're looking at. MRO problems. Finding purpose-built solutions for that is important.

And so we worked with Gartner analysts across the indirect space. Who here works with Gartner or read this 2025 procurement and sourcing hype cycle that they just put out? Anybody read it? Yeah. Couple. Cool. The big takeaway is that MRO is very specific. You can't have. A one size fits all tail spend strategy for, services, direct materials and indirect materials.

You should look at purpose-built approaches for each, and that was one of the big takeaways and we were lucky to be named in this, for our unique approach to setting demand and letting that influence supply and then attacking tail spend in that manner. We've also gone one step further. Now be with the risk environment.

The way it is there is a lot more free text spend that goes off category and many of you may be seeing that feeling, that wrangling that. And so with the support of AI and the extensive training of material and PO long text data. We saw and did a study across our customer base and, partner base.

And one of the big problems is while there are global standards like U-N-S-P-S-C that exist and 8,000 and all these, and it's changing. There's more coming down for data and operability and better data. Perfect data doesn't exist. So how can we take that? And actually, organizations are largely.

While they may be directionally towards U-N-S-P-S-C or some other, global standard, you make a, you kinda have your own right. And so if they're all different, then it makes it difficult to align to, what your supplier may have something, categorize 'em versus what you do so you get a lot of leakage.

So we did extensive training off of our foundation and where we can take material data and free text spend data. And out of the box, greater than 80% accuracy categorized to the top MRO categories and start putting them in and saying, all right, here's how the category looks. You didn't know about it, your supplier didn't know about it, but there's 10 million of leakage with 200 plus, vendors that you can funnel.

To the contract if you care to do which obviously most would. Now, there are exceptions. There's OEMs, there's very specific things. There may be some misclassified things, but directionally this gives you that visibility to start looking beyond the one category or just the strategic categories and develop a plan that can include going to market, leaning in.

Integrated supply, GPOs, whatever, so you can formulate a better strategy and spend that time executing against that strategy. And this is a bit of what we mean from a tail spend perspective. So this is an example of, or you issued a contract, this is a great story, issued a contract 10 months later.

Where's all the spend you promised me from the vendor, right? May, many of you may have had that conversation and it's not anything that you're like intentionally doing, it's just, goes back to some of these foundational baseline things that you can help. Look at all categories, get a list, permission that to your suppliers.

Item level, here's what we see, where we see it. Yeah, can you put it on BMI, can you source this for me? Let's try to get that leakage onto the contract. So your contract compliance can go from 50 to 60 to 70 to 80%, and your tail will minimize. Is the approach that and where AI can help do that as technology advance.

Advances, and this doesn't just go for verisin. This is, across the board. There needs to be better data interoperability. There needs to be, better passing of the baton from AI to AI from system to system. And this is representative of a bit of what we're doing to give greater visibility across the MRO lifecycle.

A growing number of supplier partners, system partners strategic partners from the form of consultants that can help you with those additional levers and projects that come out of the way you look at data. From a overall visibility perspective, what is everything that I can do that I could, VMI.

What could I repair? This is a growing area that we see is I do have a ton of dead and obsolete inventory. How do I get rid of it and not get just pennies on the dollar? So how do you get people to say, yes, it is no longer needed? How do I get it out to market? And simplify that process so you're not just giving it away and doing huge write offs.

So that's a part of your strategy as well, is cleaning it up and hope, and making sure it doesn't happen again. And then lastly, there are new standards coming. So look for some new ISO standards as it pertains to supply chain data. 25, 500. Peter Benson will be talking a little bit about that here.

I think tomorrow we're working with, ECMA and IMA and all a bunch of different, data's very important. It is no longer clean. And then outcomes, you can remove the prerequisite a bit. A lot more actually than you used to. But overall you want to keep, we want to work towards a better data environment and that's, a big part of where we look to help.

Takeaways, as I'm about to get buzzed off stage here Purpose-Built AI for MRO, it exists. There's a ton of great solutions. Including ours that we would love to work with you on and help you drive your strategic roadmap and set your strategic roadmap with your existing or new partners that you may want.

You are the strategic stakeholder and leader at your organization. So bring the people together and and help serve them internally and you can utilize data to do and have that full visibility versus isolation and frustration that exists. And last, lastly, yes, better data's better, but, we can't wait for perfect data to help transform the MRO supply chain.

And a big part of where we're going is being able to build, learn, and continue driving towards a more sustainable Mr. Supply chain. Thank you. I don't know if we have time for questions. No. Okay.

Announcer: If you can find Paul over in the exhibit hall, he's gonna be over there for questions.

Go see him, get a bingo sticker, get a snack. Have a great time. Yeah.

Paul Noble, Founder & Chief Strategy Officer – Verusen: Yeah. Sounds great. Thank you all. Appreciate it. And yeah, we're at Booth 15. We do have an offer of developing a free business case for you and talking through your MRO strategic roadmap. If you'd like to stop by, we can talk more about that with you.

Announcer: All right. Thank you so much, Paul.