Rising costs for interior materials and FFE may seem inevitable, but artificial intelligence innovation is untethering procurement from traditional supply chain mark-up, tariffs and other roadblocks, for savings that can reach 50% or more. We queried Alex Seyfert, CEO, FlumeAI, to find out how this disruptive technology is transforming commercial real estate procurement.
Q: What are specific supply-chain pain points that AI could address for developers?
A: AI can relieve recurring procurement frustrations for developers, contractors and designers, at dramatic cost savings. Traditional supply chains rely on limited distributor networks that add multiple markups and restrict options. Quotes are often based on outdated design drawings, leading to cost spikes late in the process. Developers also face long lead times, domestic shortages, tariff disruptions, and manual, time-consuming supplier searches. AI platforms like Flume can rapidly screen tens of thousands of global manufacturers to match quality, regulatory, and budget requirements, bypassing intermediaries. They also manage sample approvals, customs navigation, and delivery coordination, preventing schedule delays. The result is reduced pricing volatility, faster sourcing, and fewer compromises of the original design intent for the project.
Q: Can you provide recent example / case studies?
A: A hotel project in Monterey, CA saved over $100,000, about 50% off of what suppliers quoted earlier, on bathroom tile, flooring, and other finish materials after AI-enabled sourcing identified offshore manufacturers offering equal or better quality. The solution also avoided tariffs scheduled to take effect, maintaining the construction timeline.
For a Texas builder doing a 120-unit tiny-homes multifamily project, Flume has saved them over $150,000 on materials.
A hotel redevelopment in Arkansas saved more than $500,000 using the same approach, sourcing high-quality materials from alternate manufacturers compared to initial options.
Q: Where is the development/construction sector on the learning curve for implementing AI solutions?
A: The development and construction industry is in the early-to-emerging adoption phase. For example, AI-driven procurement is still unconventional to many designers and developers, who remain protective of design intent. The Kimpton design and development team initially approached the process with caution before gaining confidence through data, samples, and collaboration, then ordered more and more. And momentum for this new solution is growing as market volatility makes traditional models less reliable.
Q: What are some emerging applications for AI in material sourcing?
A: AI is enabling new procurement capabilities beyond cost comparison. Platforms can match product specifications to global manufacturing options at scale, preserving design vision while reducing expenses. Models can identify compliant suppliers across borders, navigate tariffs and customs, accelerate lead times, and flag risks tied to shortages or price swings. And with direct manufacturer access, builders can meet value engineering goals with upgrades rather than downgrades.
Q: What opportunities are supply-chain and CRE companies missing with AI?
A: Most teams in the industry are already using tools like ChatGPT for surface-level tasks like drafting and doing lightweight research. The real gains come from deeper workflow optimization, and that requires domain-specific solutions. In commercial real estate, there’s effectively zero margin for error. For example, Flume pairs AI systems with seasoned human experts: the AI accelerates and expands what’s possible, but humans remain the decision-makers.
In CRE supply chains, the biggest issue is information asymmetry. There’s an enormous amount of data spread across languages, product categories, geographies, and contexts. AI is uniquely suited to cut through that complexity. That’s where Flume positions itself: an AI-amplified service partner for developers and builders, improving CapEx and supporting projects from early design through final procurement. We can step in during design to help architects and designers explore materials and options that maintain the aesthetic intent while staying on budget. And later in the process, we use AI to source the best pricing globally for already-specified materials. It’s about bringing more transparency, more optionality, and ultimately better financial outcomes to an industry that has historically operated with far too little of all three.
The post AI That Untethers CRE Procurement: Q&A with FlumeAI’s Alex Seyfert appeared first on Connect CRE.