AI in Distribution

Just in case you happen to be one of the three people on the planet not familiar with the term AI (or Artificial Intelligence for long), the topic seems to be the subject of thousands of blogs; technical, political and otherwise. Based on a few of the headlines I have seen, AI is destined to:

? Take jobs away from millions of people (ranging from drivers to cardiologists)

? Destroy the Earth (which kind of reminds me of a million old drive-in movies)

? Change Human Relationships (where people seek robots for companionship)

? Replace people in Burger Joints (I wonder if a robot will ask if I want fries?)

If time permitted, I could go on and on with other examples of scary headlines. I won’t. Before I proceed further, allow me to say, a 1950s kids book about AI launched me into my career in technology. Even at age eight, I thought AI sounded like a pretty cool concept. Allow me to digress.

Danny Dunn and the Homework Machine changed the course of my life. A brief recap of the book would go like this: Danny Dunn is charged with house sitting for a professor. The good professor happened to have a computer. Our hero, Danny, discovered the computer could do his homework and proceeded to live the good life. That, folks, became my vision of the future. I became a Computer Engineer and pursued a life in technology-- an AI story with a happy ending. But what does this have to do with distributors?

Artificial Intelligence is poised to drive Distributor Sales

First, one must note the hundreds, no thousands, of new product opportunities coming down the path for distributors. Our supply-partners realize AI is key to differentiate products in the future. We’ve already seen a rash of AI technology announced for robotics, machine vision and sensor technology. This all ties to the IIoT (Industrial Internet of Things), which experts tell us will have an economic impact of $12 Trillion per year by 2025. They go on to compare the significance of IIoT to the advent of the Steam Engine, Mass Production, and Computerization.  AI is an extension of all this.

For distributors, this means tons of new selling opportunities for products which will require some expertise to select, apply and maintain. Knowledge-based distributors will no doubt play a key role in the application of all these exciting new goodies. It’s a gold mine, but we need to sharpen our shovels.

Using Artificial Intelligence in our Business

Distributors need to do more than just sell technology. They also need to put that technology to work making them money. In a recent conversation with a group of Knowledge-based distributors, I broached the topic of AI in their businesses. Most smirked while one chuckled as he said, “It will be a very long time before we can put one of those Jetson-style Rosie the Robots out in our warehouse like Amazon is talking about doing.”

This got me thinking. Are we setting our sites too high? Are Knowledge-based distributors failing to see some of the “down and dirty” applications for AI? Does all the hype around the fancy topics somehow “drown out” the places we could put new technology to work?

One of the most prevalent new applications for AI today comes by way of the digital assistant. According to the latest research, the IQ of Google’s Assistant is 48 with Amazon’s Alexa and Apple’s Siri lagging behind. Don’t let that number fool you, all three of the devices are getting smarter each year. I see an opportunity to put this to use in distribution. 

Let’s take a look at the things distributors do and play what if:

? What if a distributor outside salesperson could call into your ERP and ask it to email me the last three invoices from Acme Manufacturing immediately prior to a call?

? What if an inside salesperson could ask the assistant, is Acme Manufacturing on credit hold?

? What if a sales guy could ask the system to display all the accounts in West Overshoe?

? What if your receiving clerk could call up a purchasing order and receive products via voice command?

? What if one of your inside salespeople could ask for a customer’s CRM page and make corrections to the information while conversing with the customer?

? What if an inside sales guy could ask for a list of open orders for the customer they are currently speaking with and can review the information with the customer instantaneously?

These applications involve connection to your ERP system which is a reality today from people like Epicor and some of the other leading providers. I still see a value in these assistants even if you don’t currently have the power online.

True confessions here, I use the Alexa app both at home and in my office to schedule appointments, alarm me to important meetings and make reminders. The productivity garnered from a $40 device is amazing and I would report the time savings pays for the cost every single month. Plus, I am certain I only utilize a fraction of her abilities.

AI for Analysis

I believe analytics are a must have for Knowledge-based distributors of the future (and I’m not thinking The Jetsons’ kind of future). Sadly, distributors are floating up the data stream without enough time to do any paddling. While many people talk about really far out things like AI systems monitoring economic trends and weather forecasts to predict and make decisions, I want to stick to stuff literally just around the corner.

Again playing the “what if” game: What if we had an AI system capable of monitoring customers?

Changes in customer purchase activities might be measured.

For instance, suppose Acme Manufacturing purchases tens of thousands worth of your flagship line each month. How long would it take you to realize their purchase of some periphery product worth only a couple thousand bucks was discontinued and switched to a competitor? For most distributors, the answer would be six months or longer. The other guy got a piece of your business and you don’t even know until it’s too late to do much about it. Would this give you a competitive advantage? You bet.

Changes in customer payment behaviors might be cool.

A/R people tell us you can spot trends with customers who are struggling financially. What if your system warned you that accounts were slipping a couple of days longer each month over a longer time? While this doesn’t apply to everyone, distributors serving contractor markets would benefit greatly. They would make more money to boot.

Artificial Intelligence tells me it’s time to End

Time and space limit a nearly endless list of examples of places where distributors might apply little AI and drive profits forward. Distribution is such a short margin game. The typical distributor puts three percent to their bottom line and even the superstars of distribution are sub- 10 percent performers. As we face threats from new competitors and different sales models, efficiency, productivity and accurate decisions grow in importance each year. It’s time to think about Artificial Intelligence for this year and not sometime into the future.