Building a new operating model
Supply chains are the hidden engines of the world, powering our lives and the global economy. But they’re complex, fragile, and too often overlooked until they break. The U.S.-China trade war offered a stark reminder of their vulnerability, as tariff battles sent shockwaves through global markets.
At Magentic, we focus on solving the hardest, most overlooked problems for the enterprises that depend on them. Supply chains have always been volatile, but the last few years have shattered any illusion of stability. Three ‘once-in-a-lifetime’ supply chain shocks;COVID-19, war in Europe, and tariffs;have tested even the most resilient operations.
The result is a landscape where cost, risk, and operational friction compound at a pace that renders yesterday’s playbooks obsolete. The old answers;another dashboard or SaaS tool;are spent. The way forward requires more than an incremental fix: an entirely new way of operating.
The $40 million value leakage problem
Procurement’s core challenge isn’t a lack of data, but the inability to operationalise it at scale. While many vendors focus on improving the first part of the procurement cycle;finding partners, securing deals, and negotiating terms;the latter part, managing suppliers, is often neglected.
Value leakage due to process inefficiencies, contract compliance failures, and unclaimed credits has a huge impact on the total cost of ownership (TCO). Bill of Materials (BOM) spend often exceeds 60% of COGS, and every recovered dollar feeds margin more directly than new revenue. Unfulfilled supplier obligations alone leak roughly 2% of spend;that’s $40 million annually for a $2 billion spend.
Today’s software stack offers little relief. Most tools end up as point solutions, and while they’re great for improving certain workflows;such as managing risk or streamlining invoicing;they rarely close the loop. The heavy lifting;finding breaches, enforcing contracts, orchestrating recovery;remains manual, slow, and error-prone.
So what’s to blame? If you ask Fortune 500 leaders: The messy reality of supplier management. Most enterprises have hundreds of employees dealing with suppliers at different operational levels. Making analysts sift through siloed data and thousands of contracts is neither feasible nor economically viable. Companies must act fast to seize value to stay competitive. Humans alone simply can’t keep pace.
Your AI teammate task force
Our first wave of Mages focuses on just this. Mages join teams as employees, executing work end-to-end to deliver savings on the back of the data transformation work that companies have worked hard on.
For instance, a Mage can find and consolidate immature master data across systems, identify discrepancies in payment terms, and then draft new classes, creating a closed-loop feedback process.
This isn’t another tool. Built with state-of-the-art agentic technology, Mages autonomously use existing company software, respond to emails, and simultaneously deal with thousands of files.
Take Sam, a Mage specialising in Supplier Relationship Management (SRM) and contract enforcement. When hired by a Global Fortune 500 Manufacturer, Sam found;
Roughly 25% of supplier documents had errors or opportunities impacting P&L
Issues such as payment terms or contracts missing key elements and clauses
Missed savings like volume discounts and inflation adjustments
Sam identified and resolved these issues and then performed Root Cause Analysis to understand why contract breaches happen in the first place.
This would have taken months if done by humans. Instead, their time is freed to focus on category management strategy and spending more time with suppliers, building human-to-human relationships.
Mages you can trust
AI can drastically transform procurement, but integrating it at enterprise-level isn’t a walk in the park. Our founding team brings AI engineering, supply chain, and procurement expertise from OpenAI and McKinsey & Company, and deeply understands the risks.
Security is paramount, and we take it very seriously. All data is encrypted, and our platform is “secure by design”, strictly complying with the highest grade of InfoSec, including SOC2 Type 2, ISO 27001, and GDPR.
We know that accuracy and reliability are non-negotiable in procurement and supply chain operations. Even a small error in contract enforcement or supplier evaluation can have outsized financial consequences.
That’s why every action our Mages propose is grounded in evidence. Mages always surface the exact contract clause, invoice, or correspondence supporting their suggestion, showing the rationale behind each decision.
