Procurement And Franchising Leaders Urged To Adopt AI Or Risk Falling Behind

This was the message from Vilochanee Reddy, head of the Chartered Institute of Procurement and Supply (CIPS), at a recent franchiser mentorship breakfast hosted by Nedbank Retail Services and Franchise Coaches.

In the session, Reddy’s message was simple: embrace AI thoughtfully or risk being left behind.

AI in procurement goes way beyond the basics

The first function of AI in procurement was Robotic Process Automation (RPA), which replaced repetitive tasks with bots. But that was just the start.

Today, AI isn’t just about automation – now 5G, internet of things (IoT), software as a service (SaaS), blockchain, and even 3D printing have entered the mix.

Blockchain is helping companies trace every step of a product’s journey, IoT connects systems and devices in ways we couldn’t imagine before, and predictive analytics lets franchisers forecast demand before it even hits their desks.

In short, procurement has gone from being a back-office function to a strategic powerhouse.

"International brands like Starbucks, McDonald’s, and Burger King use AI not just for operational efficiency, but to reach customers in a personal, targeted way," says Reddy.

"Smaller players like Juici Patties are already using AI to predict stock needs, improve store hours, and boost sales. In South Africa, Spar, Woolworths, and Total are investing heavily in tech to keep up."

The takeaway? AI isn’t just a nice-to-have. It’s shaping every customer interaction, every supply chain decision, and every operational move.

Where procurement is headed

Reddy shared that she’s noticed that the biggest shifts in procurement are around being ethical, sustainable, and data driven.

"AI helps with demand forecasting, supplier selection, dynamic pricing, and even environmental, social, and governance (ESG) scoring. Automation is taking over invoicing, stock management, and supplier collaboration. But the focus isn’t just efficiency – it’s doing it transparently and responsibly."

Of course, AI isn’t plug-and-play: "Data privacy and cybersecurity are major concerns. Integrating multiple systems can be complicated, and showing a clear return of investment (ROI) isn’t always easy. Some teams fear automation will take jobs – but, ironically, skills gaps remain a challenge, especially for older employees, while Gen Z tends to adapt effortlessly to these new tools," Reddy says.

The next big thing: From generative to agentic AI

Generative AI predicts outcomes. Agentic AI acts on them autonomously.

"This is where things get really interesting," says Reddy, "Retailers can adjust supply in real time, and finance and support teams easily automate workflows. Companies like Walmart and Starbucks are already using these tools, and soon, each of us may have multiple AI agents helping us manage daily tasks."

Keys to success for the franchise industry

Reddy says that, for franchisors and franchisees, success comes down to agility and adaptability.

"Prioritising staff training, integrating systems, and using data ethically will make all the difference. South African businesses tend to look for immediate ROI – but to truly benefit from AI, you need to balance that with a long-term mindset."

Take warehouses, for example. Drones monitor hard-to-reach areas and cobots – collaborative robots designed to work safely alongside humans in a shared workspace – reduce fatigue, while navigation robots improve efficiency and safety. Forklifts are being replaced by systems that can pick high-bay stock autonomously.

"And if you want a real-world example, look at Aurora’s work with Uber – self-driving trucks cutting costs, improving efficiency, and addressing driver shortages," says Reddy.

How to start without becoming overwhelmed

Reddy’s advice is to start small.

"Focus on repetitive tasks, train your teams, and gradually move from reactive operations to predictive ones. SaaS solutions from AWS, Microsoft, or Google Cloud can simplify things. Tools like Salesforce AgentForce, Zycus, or ShipSea Logistics make AI practical without massive upfront costs."

Reddy adds that backend AI – think supply chain optimisation and predictive analytics – can deliver ROI in three to six months. Frontend AI, like chatbots and personalisation engines, may take longer but they build loyalty and brand engagement.

"Personally, I see massive value in the customer-focused approach – it’s where growth meets reputation."

Reddy highlights that AI should never replace humans entirely.

"Human-centred AI creates safer, skill-based roles. Governance is key and fairness, transparency, and sustainability can’t be afterthoughts. And yes, we need to keep energy use and e-waste in check by adopting green AI wherever possible."

"At Nedbank, we believe our role goes beyond offering best-of-breed financial products in the market into providing access to up-to-the-minute insights on major shifts and trends in the industry – particularly those that are moving at lightning speed like AI. Through our collaboration with Franchise Coaches, we create opportunities for franchisers to learn from leaders like Vilochanee, and translate those learnings into practical strategies for growth," says Karen Keylock, national retail manager for Retail Services at Nedbank Commercial Banking.

The bottom line

AI is transforming procurement, franchising, and retail. As OpenAI CEO Sam Altman says, "The biggest risk is not taking any risk.' Bill Gates reminds us to be cautious, and Dave Waters from Supply Chain Today notes, 'Predicting the future isn’t magic – it’s artificial intelligence."

Vilochanee’s message is straightforward: "Embrace AI thoughtfully, invest in your people, and balance short-term gains with long-term innovation."

The future isn’t coming – it’s already here. The question is: are you ready?