Fortescue introduces agentic 'capability' to procurement
Key points
- Fortescue’s agentic AI capability for procurement has freed up cash by improving visibility of inventory held in Pilbara warehouses, group manager of integrated technology Rebbecca Kerr says.
- The reduction in working capital was an unanticipated benefit, with staff now accessing warehouse inventory instead of buying off or on contract.
- Kerr says lessons from Fortescue’s decade-old autonomous trucks work now guide its AI journey, including the principle of not waiting for perfect conditions.
Fortescue has freed up cash using an agentic AI “capability” that aids procurement and improves visibility of product inventory held in warehouses across the Pilbara.
Group manager of integrated technology Rebbecca Kerr told the SAP Now AI Tour event in Sydney that the reduction in working capital requirements had been an unanticipated benefit of deploying the agentic system.
“Our contracts and buying process has traditionally been quite hard to navigate,” she said.
“We built some agentic capability that automates much of the work, giving our teams great visibility across both our contracted products, but also our warehouse inventory.”
While the business case for the procurement solution “was about supporting our users and making things easier”, Kerr said other benefits had accrued that produced more significant value to the organisation.
“What surprised us was the visibility that we’ve now got across all of our warehouses across the Pilbara, and one of the things that’s happening, instead of people buying off contract [bypassing established procurement arrangements] or on contract [using pre-negotiated supplier arrangements], they’re starting to just access inventory out of our warehouses.
“So, [there’s been] a reduction in our working capital, which is by far becoming the biggest advantage of the work that we’ve done, [and it] was something that wasn’t even in the original business case.”
Kerr said that the miner is now looking at the agentic workflows it has built and “at how we embed those into SAP and our other enterprise programs.”
Autonomous haulage influence
Kerr revealed the pivotal role that Fortescue’s work with autonomous trucks a decade ago has had on technology programs since – including its current embrace of AI.
“Long before AI became a topic that everyone is talking about, we had started on the journey of autonomy,” Kerr said.
“Looking back now, autonomy wasn’t our destination. It became our proving ground, and it fundamentally changed the way we think about technology transformations.
“The lessons we learnt then are the lessons that we’re applying now as we delve into the world of AI.”
One of those lessons, and now guiding principles, is not to wait.
“One thing that Fortescue has always done is we’ve never waited for the conditions to be perfect. We’ve just started, we learn by doing, we prove by demonstrating, and we continually improve as the technology evolves,” she said.
“Our Pilbara operations has become one of the biggest testbeds for testing out commercialised technology and scaling that, and then scaling it to the rest of our operations.”
Kerr also said that AI, like its technology predecessors, is merely an enabler for achieving an operational or business objective.
“That philosophy still guides how we’re going on this AI journey,” she said.
“We don’t ask, ‘Where can we use AI?’ We ask, ‘What’s the biggest problem that we’ve got that we can bring [in] technology as an enabler for [improvement]?’
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