Use Case | Application of the Generative Model for Compliance with Purchasing Policies

Use Cases: Application of the Generative Model for Compliance with Purchasing Policies

General Description: In the purchasing area, ensuring that both internal policies and external regulations are followed is crucial to reduce legal risks, avoid penalties, and maintain transparency in acquisition processes. This generative model automatically analyzes documents such as contracts, purchase orders, and corporate policies, ensuring their alignment with established rules and regulations.

How It Works:

1. Document Upload:
   • Users upload relevant documents to the system in PDF format, such as internal policies, purchase orders, and supplier agreements.
2. Automatic Model Analysis:
   • The model reviews the documents, comparing them with the established purchasing policies, checking for:
     • Budgets: Do the purchase orders adhere to budget limits?
     • Approvals: Do they include the necessary signatures and approvals?
     • Regulatory Compliance: Do they comply with applicable local or international regulations?
     • Transparency: Are the terms clear and free from legal or ethical risks?
     • Internal Procedures: Are the purchasing processes aligned with the company’s internal policies?
3. Evaluation and Classification:
   • The system evaluates each document’s compliance level and classifies those that fully comply and those that present deviations or risks.
4. Report Generation:
   • The model generates a report that includes:
     • Compliant Documents: Documents that fully comply with policies.
     • Non-Compliant Documents: Documents with omissions or critical areas that need attention.
     • Recommendations: Suggested actions to correct identified issues.

Example of Use:

Scenario:
A purchasing manager wants to verify that internal policies are being correctly applied to 10 recent purchase orders.

Simplified Process:

1. Upload:
   • The manager uploads the 10 purchase orders to the system.
2. Automatic Evaluation:
   • The model checks:
     • Whether the orders are within the approved budget.
     • Whether the required approvals (e.g., supervisor signatures) are included.
     • Whether the orders align with applicable external regulations.
     • Whether they comply with the company’s transparency rules.
3. Results:
   • Compliant Orders: 7 orders meet all policies.
   • Non-Compliant Orders: 3 orders present issues:
     • Order 3: Missing approval signature.
     • Order 7: Exceeds the assigned budget limit.
     • Order 10: Ambiguity in delivery terms.
4. Generated Report:
   • Compliant Orders: Ready for immediate processing.
   • Non-Compliant Orders:
     • Order 3: Request the corresponding supervisor’s signature.
     • Order 7: Adjust the amount or justify the budget overrun.
     • Order 10: Review and clarify delivery terms before proceeding.

Benefits for End Users and Managers:

1. Guaranteed Compliance:
   • The model ensures that all documents comply with internal policies and external regulations, minimizing legal or financial risks.
2. Transparency and Control:
   • Provides a clear view of which documents comply with the rules and which need adjustments, improving traceability in the processes.
3. Time Savings:
   • Automates policy validation, eliminating the need for extensive manual reviews.
4. Informed Decision-Making:
   • Provides clear, structured reports that facilitate problem correction and streamline workflow.
5. Risk Reduction:
   • Identifies deviations before they become critical issues, ensuring compliance at all stages of the purchasing process.

Summary of the Generated Report:

• Documents Analyzed: 10
• Compliant: 7
  • Complies with all internal policies and applicable regulations.
• Non-Compliant: 3
  • Order 3: Missing required approval signature.
  • Order 7: Budget overrun without justification.
  • Order 10: Ambiguous delivery terms.

Recommendations:

• Request the missing signatures to complete the authorization process.
• Justify the budget overrun or seek adjustments to the orders.
• Review and correct ambiguous terms to ensure clarity in agreements.

Conclusion: The generative model for evaluating compliance with purchasing policies transforms a manual process into an automated tool, ensuring transparency, efficiency, and regulatory compliance. With detailed reports and actionable recommendations, managers and end users can make quick, informed decisions, optimizing purchasing management and reducing risks.