Supply chains are hemorrhaging money. The typical business is wasting as much as 5% of its procurement spending according to research conducted by venture firm Sequoia, with hundreds of billions of dollars’ worth of value lost as a result. A recent survey from KPMG found almost three-quarters of supply chain managers now believe it is imperative to transform their operating model.

Saying it is one thing, however, but doing it is very difficult. Aman Arora, the CEO and co-founder of Hyderabad-based start-up Heizen , argues that the complexity and breadth of many companies’ supply chains have left them unable to get to grips with value leakage.

“Large enterprises now have thousands of suppliers, but they’re only engaging with a small proportion of them – typically, the top 10%,” Arora explains. “At an individual level, the remainder of your suppliers are too small to justify dedicating resources to, but in aggregate, that means a huge amount of lost value.”

Arora highlights consumer packaged goods, healthcare and manufacturing as industries where enterprises are particularly likely to be working with a long tail of suppliers in addition to a smaller number of very major partners. They may speak to these smaller suppliers as infrequently as once a year; contract terms are rarely reviewed; there is little opportunity to discuss pricing, terms and conditions. “The economics never make sense to assign humans to these small suppliers,” Arora adds. “That's money left on the table at scale.”

It’s an old problem, but one many enterprises have struggled to deal with – and seen spiral out of control in recent years as disruptions and upheaval have forced them to reconfigure supply chains at speed. However, the advent of artificial intelligence (AI) brings new opportunities to confront supply chain inefficiency.

Already, small start-ups such as Magentic, AskLio and Tacto are changing the way large enterprises procure from their supply chains, with each having raised substantial sums from investors as they scale up AI-powered platforms.

Heizen has big ambitions to do something similar. Its platform operates in two phases. First, the company’s AI tools map the enterprise’s business, identifying suppliers and verifying contract data, comparing what it finds to relevant industry benchmarks. Next, Heizen’s AI agents take on the supply chain management work that isn’t economic for the enterprise’s human staff – these agents automatically and autonomously work their way through the long tail of suppliers to identify potential savings and to negotiate directly for new terms.

It’s relatively early days – Heizen was founded in 2024 and relaunched as a supply chain specialist last year – but Arora says the initial results of deployments at around a dozen customers are encouraging. One food business spending around $120 million a year on goods and services is closing in on a 10% reduction in procurement costs, he says.

“Suppliers who hadn't heard from a buyer in a year are now in active negotiation,” Arora adds. “Procurement teams that could only touch their top contracts now have their full supplier base worked continuously.”

Chor Hung Choy, a senior manager at logistics business DHL, one large enterprise that has begun using Heizen’s services, believes the platform can make a significant impact. “What was once a highly manual, time-consuming and often tedious process has now been streamlined into an efficient and scalable solution,” he says. “What began as a robotic process automation initiative evolved into a broader process redesign effort, enabling us to digitalise workflows and automate manual checks.”

Heizen believes that if it can repeat that success at other customers, there is a genuine opportunity to unlock significant resources for enterprises worldwide. Nijansh Verma, who co-founded the company with Arora and Abhilasha Singh, says: “We see it as the largest pool of found money sitting inside the global economy, and for the first time, AI makes it possible to actually go get it."