Artificial intelligence is already changing how procurement, supply chains and franchise businesses operate, according to the Chartered Institute of Procurement and Supply (Cips), which briefed industry executives at a franchiser mentorship event in Johannesburg.
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Speaking at the breakfast hosted by Nedbank Retail Services and Franchise Coaches, Cips South Africa head Vilochanee Reddy said companies that fail to integrate AI into procurement and operations risk losing competitiveness as automation and data-driven decision-making become standard.
Reddy said the role of AI in procurement has moved beyond early robotic process automation, which replaced manual administrative tasks, into systems that influence forecasting, supplier selection, stock planning and customer engagement. Technologies such as connected devices, cloud platforms, blockchain and predictive analytics are increasingly being used to monitor supply chains and anticipate demand.
She said large global franchise brands, including Starbucks, McDonald’s and Burger King already use AI to personalise customer engagement and optimise operations, while South African retailers including Spar, Woolworths and Total are investing heavily in digital systems. Smaller regional brands are also using data-driven tools to improve store performance and inventory planning.
According to Reddy, procurement functions are becoming more focused on data, sustainability and compliance. AI tools are now used to support demand forecasting, dynamic pricing, supplier evaluation and environmental, social and governance scoring. Automation is also expanding into invoicing, supplier collaboration and stock management.
However, she warned that the shift comes with challenges, including cybersecurity risks, data privacy concerns and the complexity of integrating multiple systems. Skills shortages also remain a constraint, with some employees struggling to adapt to new technologies while younger staff tend to adopt them more quickly.
Reddy said the next phase of AI adoption will involve agentic systems, which can act autonomously on data rather than only generating predictions. In retail and logistics, these systems could adjust supply in real time and automate workflows across finance, operations and customer support.
She pointed to developments in warehouse automation, where drones, collaborative robots and autonomous picking systems are increasingly replacing manual processes, as well as pilot projects using self-driving trucks to reduce costs and address driver shortages.
Reddy advised franchise operators to adopt AI gradually, starting with repetitive processes before moving into predictive and customer-facing applications. Backend systems such as supply chain optimisation and forecasting tend to deliver financial returns more quickly than customer-facing tools, which typically take longer to show results.
She also stressed that AI systems should be governed carefully to ensure transparency, fairness and sustainability, particularly as companies adopt more energy-intensive digital infrastructure.
Nedbank Commercial Banking national retail manager Karen Keylock said the bank is working with Franchise Coaches to give franchisors access to information on technology shifts affecting the sector.
AI adoption across procurement and franchising is expected to accelerate as retailers, suppliers and logistics operators respond to rising cost pressures and increasing competition in both physical and digital markets.
