University of Twente Student Theses
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Augmented Decision Making in Purchasing and Supply Management (PSM) : Overcoming Bounded Rationality
Rotmans, N.S.E. (2025) Augmented Decision Making in Purchasing and Supply Management (PSM) : Overcoming Bounded Rationality.
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| Abstract: | This thesis explores how digital technologies, including those associated with Industry 4.0, can enhance human expertise in proactive risk management within Procurement and Supply Management (PSM). Based on an extensive literature review and qualitative interviews with professionals from eight organisations, the study examines how tools like Artificial Intelligence (AI), Big Data Analytics (BDA), Enterprise Resource Planning (ERP) systems, and Digital Twins support human decision making. The findings show that effective augmentation goes beyond automating routine tasks. Digital technologies help overcome bounded rationality and improve risk identification and assessment. However, these tools are most effective when combined with human judgment. Thanks to this “digitalisation,” PSM roles are shifting more from operational and transactional tasks to strategic and collaborative functions. This evolution requires professionals to develop new capabilities in digital literacy, data management, systems thinking, and analytical reasoning. While traditional skills like negotiation remain important, they are now applied in more data driven and relational ways. For managers, the study recommends investing not just in technologies but also in employees and data driven decision support. Building a model where technology enhances rather than replaces human input is key to effective proactive risk management. Limitations of the thesis include the study’s small, purposive sample and qualitative approach, which may limit the generalisability of the findings. Future research should examine evolving risk management skills in an augmented PSM environment, the ethical dimensions of AI in PSM, as well as the impact of decentralised structures on proactive risk management. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/106800 |
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