Use Case | Application of the Generative Model for Compliance with Sustainability Regulations in Procurement

Use Cases: Application of the Generative Model for Compliance with Sustainability Regulations in Procurement

General Description:

In a business environment that values sustainability, ensuring that purchases comply with environmental regulations and sustainability commitments is essential. This generative model allows for the analysis of contracts, procurement policies, and supplier proposals to ensure they include responsible and sustainable practices, aligned with corporate and regulatory goals.

How It Works:

1. Document Upload:
   • Users upload contracts, procurement policies, or supplier proposals in PDF format to the system.
2. Automatic Model Analysis:
   • The model reviews each document, verifying key aspects such as:
     • Environmental Certifications: Does the supplier meet certifications like ISO 14001 or equivalent?
     • Sustainable Materials: Are recyclable, biodegradable, or sustainable materials specified?
     • Emission Reduction: Are commitments to minimize carbon emissions in the supply chain included?
     • Waste Management: Are plans for the responsible management of waste detailed?
     • Alignment with Corporate Policies: Is the document aligned with the company’s sustainability goals?
3. Evaluation and Classification:
   • The model classifies the documents as:
     • Compliant with Regulations: Documents that include sustainable practices and meet applicable regulations.
     • Non-Compliant or Risky: Documents that lack key elements or present problematic areas.
4. Report Generation:
   • The model generates a report that includes:
     • Compliant Documents: Ready for approval.
     • Non-Compliant Documents: Documents with critical areas that need adjustments.
     • Recommendations: To improve compliance with sustainability regulations.

Use Case Example:

Scenario: A procurement manager wants to evaluate the sustainability policies of 8 supplier contracts to ensure they align with the company’s environmental goals.

Simplified Process:

1. Upload:
   • The contracts and sustainability policies are uploaded to the system.
2. Automatic Evaluation:
   • The model reviews each document and verifies:
     • Does the supplier include valid environmental certifications?
     • Are sustainable materials or responsible production methods mentioned?
     • Are measures to reduce emissions or manage waste defined?
3. Results:
   • Compliant with Regulations: 5 contracts meet all sustainability criteria.
   • Non-Compliant or Risky: 3 contracts present issues:
     • Contract 3: Does not mention sustainable materials.
     • Contract 6: Lacks waste management plans.
     • Contract 8: Ambiguity in emission reduction commitments.
4. Generated Report:
   • Compliant with Regulations: Ready for approval.
   • Non-Compliant:
     • Contract 3: Include specifications on sustainable materials.
     • Contract 6: Add a waste management plan in compliance with local regulations.
     • Contract 8: Clarify and strengthen commitments to emission reductions.

Benefits for End Users and Managers:

1. Ensures Regulatory Compliance:
   • Automatically verifies that documents comply with local and international environmental regulations.
2. Promotes Responsible Practices:
   • Helps identify contracts and policies that encourage sustainability in the supply chain.
3. Optimizes Validation Process:
   • Reduces the time needed to review documents and detect omissions or issues.
4. Minimizes Legal and Reputational Risks:
   • Ensures that procurement practices do not compromise the company’s sustainability commitments.
5. Ease of Use:
   • The generated reports are clear and provide actionable recommendations.

Summary of the Generated Report:

• Documents Analyzed: 8
• Compliant with Regulations: 5
  • Includes certifications, sustainable materials, and environmental management commitments.
• Non-Compliant or Risky: 3
  • Contract 3: Does not specify sustainable materials, needs correction.
  • Contract 6: Lack of a clear waste management plan.
  • Contract 8: Ambiguous commitments on emission reduction.

Recommendations:

• Request adjustments in contracts with deficiencies to align them with the company’s sustainability goals.
• Strengthen supplier training on sustainability regulations and corporate requirements.

Conclusion: The generative model for Compliance with Sustainability Regulations in Procurement ensures that procurement contracts and policies align with the company’s environmental goals and applicable regulations. By automating document analysis, it identifies critical areas and provides clear recommendations for improvement, ensuring that procurement practices are responsible, efficient, and sustainable.