How Artificial Intelligence is transforming the distribution industry

Across most industries, the buzz is about finding use cases that promote the value of artificial intelligence (AI). But how will the distribution industry specifically benefit? And where can AI create value for your business and workers?

First, there was robotic process automation (RPA), and then chatbots. They started dumb, handling menial tasks. But, infused with AI, they got smarter and added more value to their output, moving into all types of business and operation. Now, almost any digital office or production application comes with AI features baked in, and they are learning fast.

For distribution leaders and IT teams, there is plenty to focus on already without getting distracted by possibilities that haven't quite materialised yet (think self-driving vehicles, augmented reality glasses, drone deliveries, etc). But the rise of AI will not fade away because it's making so many tasks quicker and easier. So here's what you need to know.

What is artificial intelligence?

In short, AI is software linked to data or sensors and capable of processing it, learning from it, and providing a valuable output. That might be an insight based on complex data, predicting supply variations, or performing big data tasks (facial recognition, medical scans, voice chat, and more) incredibly quickly.

AI use has grown dramatically thanks to the massive scale of the cloud, with powerful processors crunching complex maths and accessing huge data sets, often in real time.

To the end user, AI is just another service that might be called "predictive analytics" or "smart learning" to give it a more business-friendly name. Whatever the descriptor, AI is tasked with performing a process, with all the magic working underneath.

Using AI in distribution

Distribution businesses running robust cloud solutions are kept updated with new features at a steady cadence, with AI becoming just another tool for users to experiment with and extract value from. For today's distributors looking to be ready for tomorrow, AI can:

Manage suppliers

Many distributors are rightly proud of their supplier relations, but AI and machine learning can inspect the data behind their service and suggest ways to deliver improved supplier performance, ironing out process inefficiencies or product weaknesses that might only be visible in easily neglected returns logs.

Improve the sales experience

AI can constantly tweak prices or display dynamic recommended buying options to increase the chance of completing a sale. Based on customer history and market conditions, AI-powered sales applications can suggest volume discounts using both sales data and sentiment analysis.

Optimise your inventory

Most distributors already run inventory applications to keep the right amount of stock ordered for today, but AI can monitor sales patterns and ensure that the right stock is in the right warehouse constantly as seasons, markets, and products or supplies change.

AI can also monitor transport costs and supplier charges, finding the most cost-effective ways to purchase, deliver, and distribute goods to-and-from your warehouse operations. It can provide buyers with recommendations and update routings, ensuring the fastest service for customers.

Maximise sales and buying efforts

With AI making an increasingly powerful appearance in business processes and management tools, it can take over many of the dull and time-consuming tasks that workers used to put up with. The extra time can be spent building relationships with customers up and down the supply chain, providing them with data-driven insights, and highlighting your company as one on the cutting edge.

Make it easy for everyone to use

Everyone from a new warehouse staffer to the CIO will get maximum value from their AI tools if you choose a platform with preconfigured AI models. This makes machine learning more accessible through low-code and no-code implementations. And the automated retraining means hands-off maintenance.

In summary

In just a few short years, AI solutions have crossed from science fiction into business reality, delivering on their potential to save time, cut costs and deliver value through smart insights. Fear of AI has largely been left in the rearview mirror, and this is only the beginning of AI's place in technology.

Some useful insights from Deloitte's just-published 5th annual State of AI in the Enterprise report highlights:

• 42% of firms already use algorithmic supply chain planning.
• 65% of firms buy an AI service rather than build their own.
• 82% of respondents surveyed indicated their employees believe that working with AI technologies will enhance their performance and job satisfaction.

But there is more to do on risk, transparency, and security.

These insights and opportunities to accelerate automation will empower distribution companies to take a greater interest as AI services become a feature of all applications and services.