CEOs are hugely expensive. Why not automate them?

As per Will Dunn, as published on The New Statesman

Especially when hiring a CEO who doesn’t understand what makes the business profitable loses Billions:

Starbucks Loses 30 Billion

and doesn’t understand what is critical to the company product to the point costs can never be cut no matter how high those costs may look on the spreadsheet because the net result is not only product failure, but grounding/banning of your product and expensive lawsuits that costs Billions:

Boeing lost 11.8 Billion in 2024

After all, if we’re hiring CEOs without any relevant experience, actual business intelligence, or even logic, then why not use Artificial Idiocy? It’s not like the occasional hallucinations will be any worse that an average CEO’s these days (who believes investing Billions on empty promises is a good idea) … and the actual compute costs, even if in the six figures, will still be a tenth (or [much {much}] less) of what a CEO salary and benefit package actually costs!

So if you insist on creating fictional “AI Employees”, why not kick off 2026 by starting with a job that, sadly, Gen-AI agents can actually do?

Here’s why you DO NOT want Agentic Buying and you DEFINITELY DO NOT want AI Employees

buying for you!

An AI Vending Machine lost hundreds of dollars!

Just imagine what AI is gonna lose on your multi-million dollar categories?!

And when you demand a certain savings that’s unachievable, it’s going to find a loss that equals the savings amount, multiply it by -1, and tell you that’s the savings.

< Stanford, Anthropic, Redwood, Meta, etc. studies on negotiation games, competitive scenarios, and goal-seeking behaviours, etc. >

So unless you’re looking to LOSE money …

Stick with classic automation and point-based AI where the automation runs everything for you, does all the verifications and data checks that can be automated, does all the standard analysis for raking and recommendations, and gets rid of 90%+ of the tactical time-consuming work, freeing you up for the manual review, safety checks, and strategic decisions where you, as a human, can check and find obvious supplier misunderstandings, frauds, and bad decisions for the long term because the system does the grunt work and pre-does all the standard analytics, freeing up 80% of your time to do more sourcing, more relationship management (to prevent problems and loss), and more decision making (when it’s hard to make the right decisions on numbers alone or its impossible to satisfy all the goals and choices must be made).

Breaking Down the Risks: Corruption/Fraud

Since we have had corporations, we have had corruption. This is another risk that’s not going away. Plus, fraud is rising rapidly!

Expounding the Pounding

There’s a huge amount of potential corruption and fraud that you need to worry about. It’s not something that anyone wants to talk about but it is something that needs to be talked about a lot more than it is considering that global corporate losses to fraud were estimated at 5 Trillion in 2024, or about 5% of global revenue! Fraud, for now, is the only risk more costly than natural and climate disasters.

When it comes to corruption and fraud, there are three places it can come from: inside (corruption), outside (fraud), and, the hardest to detect, internal and external partnerships (collusion).

Internally, you need to worry about situations like the following:

  • disguised procurements to bypass processes (such as split purchases)
  • false evaluations / awards
  • false expense claims

Externally, you need to worry about situations like:

  • supplier impersonation / false supplier
  • partial delivery (but full invoice)
  • bid rigging and collusion

And when you have parties on the inside and outside collaborating, you might get:

  • conflicts of interest
  • credit card / p-card fraud
  • kickbacks and bribery

And, we’re sad to say, this is just scratching the surface. The reality is that there are at least 15 major types of fraud you need to worry about in Procurement, and some are pretty hard to catch. Properly documenting these and the proper steps you can take to minimize your chances of falling victim isn’t an article, it’s a white paper. I know, I wrote an unpublished one a year ago. But we will give you a few tidbits to get you thinking in the right directions.

Reducing the Risk

In order to truly minimize the risks and reduce your fraud losses to minimal, vs the more-or-less industry average of 5% of revenue, you need to take a lot of precautions. Some of the most important ones are:

TP(C/R)M:Third Party Compliance/Relationship Management and Vetting
You need to ensure that all suppliers, carriers, and other third parties you plan to do business with are real, legitimate, vetted entities and that you have also vetted their owners/directors and vetted with the owners/directors the people you are signing the contracts with and accepting payment instructions from are employees.

CyberSecurity & CyberTracking
You need to install and maintain state of the art cybersecurity and cybetracking and make sure the source of every electronic communication is traced back to its source and the originating domain ALWAYS confirmed. Very smart cybercriminals can not only mask from and reply to fields on emails requesting a change in payment details, but they will register / hack and steal domains that are extremely similar to the company being impersonated. If the company is McDonalds.com, then, guess what, they will acquire (control of) MacDonalds.com and a quick scan of the email headers might be enough to convince even a moderately astute individual the request is genuine.

e-Procurement/Invoice-to-Pay/Accounts Payable
With mandatory minimum 3-way match before ANY payment is approved – NO EXCEPTIONS. The purchase order must match the goods receipt which must match the invoice.

There’s more that must be done, but this is where you start. It will prevent a lot of the common and easily prevented fraud.

Did the Oompa Loompas Finally Get Some Christmas Cheer?

Last year, when we asked what about the Oompa Loompas, we noted that Hershey was undertaking a huge supply chain and manufacturing project to enhance agility and efficiency in an effort to eventually save 300 Million annually (with 30% savings due to supply chain productivity improvements alone), but noted nothing was said about the Oompa Loompas who wanted to return to the glory days of chocalateering, having endured almost two decades of declining work in the chocolate industry which forced many of them into coding positions at SaaS startups, which usually didn’t work out so well.

We know. We’ve been chronicling their fate since 2007 when they had to get into the desert chocolate business to survive. (That’s not a typo!)

However, as per a recent press release on OpenPR, the chocolate market is on a promising growth trajectory, driven by evolving consumer preferences and innovative product offerings. More specifically, the chocolate market is expected to experience steady growth, reaching a value of $175.52 billion by 2029. This reflects a compound annual growth rate (CAGR) of 4.7% during the forecast period. Stability and growth is good. This should lead to more positions for the Oompa Loompas, even if they are spending more time programming automated systems to blend chocolate than doing it the old fashioned way (where they can create true confectionary masterpieces) and allow them to use both their new and old skills.

But again, time will tell if this really is good news or not. All I know is that, after the last two decades of hardship and misery, they shouldn’t get their hopes up!

Breaking Down the Risks: Regulatory compliance issues

There will always be a need to comply with local laws and regulations. Always. So let’s get to it.

Expounding the Pounding

Regulations abound (especially in Europe), and the products/services you sell and buy need to conform to all of them. These regulations relate to the materials, production methods, human resources, carbon and waste production, storage and transport, packaging, and even labelling.

And the severity of non-compliance can be severe. For each violation, your punishment for violations can range from fines to seizure to criminal charges! Even for the most innocuous aspect of product management: labelling. If the labels are incomplete, you can be fined. If the labels are not in the required language, your products can be seized and held indefinitely or destroyed. And if the labels are intentionally inaccurate, because you are trying to skirt regulatory requirements by not reformulating your production to exclude banned materials or meet the maximums for potentially dangerous materials, you can be criminally charged.

Moreover, regulations and requirements can be different in every single country you source from, ship through, and ship to and your organization needs to be aware of all of them so a “gotcha” doesn’t put your organization in a difficult situation without supply but with regulators breathing down your neck and threatening large fines, product destruction, and/or criminal charges.

Reducing the Risk

There’s no easy, or even, complete answer here, but what you need to build is:

Compliance 360.

You need a solution that

  1. tracks all of the relevant human resources, health & safety, production/(hazardous) material utilization, carbon/GHG production, packaging, labelling, and transport regulations for each country you build in, ship through, and sell in that can also
  2. match that regulation to each product/component/material you buy so that you can ensure that your supplier, carrier, or risk management department is aware of, and conforms to, the regulations as appropriate

This is much easier said than done. This requires

  1. providers who track the appropriate regulations in each country and how they translate into specific requirements that companies need to meet
  2. the capability to merge all of this regulatory insight into a common framework
    (often through a specialized platform)
  3. the capability to match these regulatory requirements to specific products … and this requires a system that maintains complete harmonized product (and product related) information from design and manufacturing through packaging and labelling to transport and storage along with countries of production/transport/sales to match to the regulations. Guess what? Unless you’ve harmonized all of this data into a common, integrated data model for multi-level planning (as you would if you integrated direct sourcing with supply chain and logistics, as per the series the doctor and Bob Ferrari did on why Direct Sourcing needs to be integrated with Supply Chain, summarized in Part 7), your chances of matching requirements to products are quite low. Not good!

This is one of the most extensive, and most involved risks, because there can be dozens to hundreds of requirements you need to adhere to in each region in which you do business, depending on the product (line) in question, but it is one you need to get a good grip on or supply assurance is going to become significantly harder as time goes on.